There's no way to solve this problem short of public, government registration of all cash and assets, which has been done before, but which most people are wary of, and for good reason.
There are so many ways that a person can be the beneficiary of a corporation that is not technically "owned" by them, depending on how you define "own". Does the corporation issues stock? Do they have investor agreements? Is it just a loan agreement? You'd have to register all those different documents. Follow that all the way down and you eventually have to register all assets and cash.
In the end, there's very little legitimate legal reason to have to know precisely who controls an asset or cash, so long as someone is responsible for the public obligations of taxes, unless there has been some crime.
If people own things in their own names, they're welcome to reasonable privacy. But the corporation is a special government program to enable certain kinds of collective action because we get broader economic benefits from things like the ability to limit liability. If people want special government support for financial activities in the broader economy, which is what corporations are, then I say key information should default to being public.
If people don't like that, well, they don't have to use the government program. But like any government program, I think voters should have enough information to be sure that it's not being misused.
It's not like companies didn't exist before the US created LLC's in the 1970's. You don't need legal, registered corporations to have companies. Companies would still exist. And even without explicit limitations on liabilities created by LLCs, any reasonable court is going to limit the liability of a company. It's trivial to create private agreements and EULA's that do effectively the same things as LLC law.
The thing you're failing to realize is that the concept of "ownership" and "benefit" aren't black and white. There are stockholders, investors, beneficiaries, members, clients, subscribers -- they all have at least some level of benefit from a company or organization, and depending on how it is organized, they may have some direct control or liability of it as well.
What you are asking for is mandatory violations of privacy with no legitimate purpose. It's the kind of "if you've got nothing to hide, then you shouldn't be worried" type of mentality that typically isn't tolerated elsewhere.
This is a huge government support of investors. It has some societal benefits, which is why we do it, but it's often abused. The notion of "privacy" when people are taking government-supported action in the public sphere is nonsensical. If people have a legitimate purpose for trying to dodge liability and responsibility for their actions, I think having that on the public record is a minimum.
And there's really no such thing as a "private corporation". The whole point of a corporation is to get government recognition for acting under another name. But assuming you're referring to companies so closely held that they're not not publicly traded, then yes, absolutely, ownership should be a matter of public record. I just recently filed for a CA LLC and my name is listed for all the world to see.
There's plenty of reason. For example, it's often very important whether deals are made between "arms-length" parties, especially where a valuation is involved. If a corporation is allowing me to buy their property for $1, it matters whether that is the fair value, or if the corporation just secretly belongs to my brother and we're avoiding taxes on asset transfer.
The fair value can be assessed independently of that, though -- and frequently, it is anomalies in values relative to fair value that lead to investigations that reveal the non-arms-length nature of a deal.
It's often very difficult to assess fair value when it's not determined by an arms-length transaction. (That's one of the challenges faced by command economies). And even when it can be done, it takes a lot of work to do. Even the price of oil, or shares in a company, can fluctuate on a daily and regional basis. In an individual transaction it's even more difficult -- is this a loss-leader? Or a free sample? -- and when it's a unique, non-fungible good, still more difficult. The price of used assets sold at auction are all over the map. And for some assets there is very little active price discovery in the marketplace. That cryptocurrency that went up in price 1000x shortly after it changed hands, was that just a lucky call? Is that patent really worth $500k? That commercial property that's been without a tenant for nearly a decade, is it really worth an imputed rent of $40k/month when nobody has been willing to rent it at that price? ... But if these two companies signed a contract that values it at that figure as collateral for a loan, then maybe that's the market price? As they say, location location location, right? Etc.
The arms-length principle is not literally a requirement to be unrelated. It is a requirement to act that way. If one brother sells another brother a moving truck for 40000 USD, it is an arms-length transaction. If he sells it for 1 USD, that is not. It's a non-arms-length transaction because of the value, not because they are brothers!
In some of the cases you mention, it's difficult to assess fair value even when it's determined by an arms-length transaction, so the sudden disclosure of a relationship would not make it at all straightforward to take anyone to court over it.
The commercial property without a tenant for nearly a decade isn't worth 40k USD / month. When you say "...these two companies signed a contract that values it at that figure as collateral for a loan...", you are describing fraud. That could arise not because of any plan of fraud prior to the loan agreement but because of one formed during it!
I don't agree with this at all. Beneficial ownership/shadow directorships/controlled entities/etc etc are well established legal concepts, and many jurisdictions have very stringent requirements to disclose and register those interests. Some - like Delaware, apparently - do not. That's a regulatory/political decision that they have chosen to make.
Would it eliminate shell companies? No (and at the end of the day, dedicated fraudsters will just forge documentation to lie about control/ownership anyway). But it would definitely reduce their usage, which I believe would be a net benefit.
I suppose when you look at it from this angle, it sounds reasonable. But then when I consider that corporations are essentially eternally existing legal persons which behave like sociopaths, and are able to get away with any crime (even occasionally killing people by accident) as long as they pay a small fine, it makes me a little upset to think that a corporation can do all this and the beneficiaries can be hidden from us.
Imagine if all beneficiaries in corporations had to be publicly known. That means all shareholders, and by extensions all holders of mutual funds, &c (since they hold shares in a trust and the trust holds shares in the corporation, they are the ultimate beneficiary, &c) and thus all participants in retirement funds, &c.
> corporations are essentially eternally existing legal persons which behave like sociopaths
Some do, some don't. If you make that statement in the context of an actual group of persons it's an example of bigotry. (And a corporation is an actual group of people people.)
Some corporations are composed of one or few people who are all not sociopaths and are very much social contributors. As with a race, gender or religion it isn't fair or accurate to tar them all with the same brush.
There are so many ways that a person can be the beneficiary of a corporation that is not technically "owned" by them, depending on how you define "own". Does the corporation issues stock? Do they have investor agreements? Is it just a loan agreement? You'd have to register all those different documents. Follow that all the way down and you eventually have to register all assets and cash.
In the end, there's very little legitimate legal reason to have to know precisely who controls an asset or cash, so long as someone is responsible for the public obligations of taxes, unless there has been some crime.