Economic crime report 2004 - Ekobrottsmyndigheten

15.5 AGENTS WHO AID ECONOMIC CRIME
15.5.1 Spurious Founders of Shelf Companies
Behaviour that Constitutes a Threat
Each year, individuals and businesses in Sweden form a large number of
shelf companies that they sell for SEK 4,000-5,000 each without ensuring
that the minimum share capital of SEK 100,000 is ever deposited. In
most cases, the purchasers plan to use the companies to illegally obtain
excess input VAT and commit various types of fraud.
EBM report 2003:3 entitled Lagerbolag och Ekonomisk Brottslighet (Shelf
Companies and Economic Crime) by the agency’s Spurious Founders of
Shelf Companies project team reviews and describes the ploy in great
detail.
Scope
Agencies are acquainted with the founders of spurious shelf companies
who are engaged in extensive activities. Between 15 and 20 individuals
manage businesses that buy and sell shelf companies in a spurious
manner.
The abovementioned project team has pieced together a number of chains
of shelf companies forged by such people. After a short while, most of the
companies declare bankruptcy and the purchasers are left with very high
debts, both public and private.
Approximately 17,000 joint stock companies, some 3,000 by spurious
founders of shelf companies, were started annually over the past three
years.
Opportunity Structure
Given the current demand for joint stock companies without having to
deposit the SEK 100,000 share capital minimum, founders of shelf companies
can make money by selling them. Most purchasers would presumably
not qualify for even a short-term loan to meet the requirement at the
time of transfer. In a sense, they are actually running private firms while
formally managing joint stock companies with respect to creditors, suppliers
and others.
Monitoring and Supervision
No agency has overall monitoring responsibility when it comes to the formation
of shelf companies. Accountants are the only ones who ever check
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