<human>: Can you give me a shortened version of the text?

Why is it illegal for companies to launder money, but not assets? By this I mean setting up a company to own and rent out equipment to another company (set up by the same entity) which provides the services?

Basically, it's a huge game of liability limitation.

For example: I create two separate entities, and raise capital for both independently. I decide that LLC is the proper designation for my needs, and file the appropriate paperwork. Company A purchases lawn care and general maintenance equipment, several vehicles and office space. Company B hires personnel, begins an ad campaign and rents equipment/vehicles/office space from Company A.

During all of the tax applicable time periods, Company B can operate at a loss and receive relevant tax breaks. Also, any profit is immediate spent on more personnel and more rented equipment from Company A. This keeps all of the equipment and profit safe from creditors and any form of suit because Company B is liable for any problems with the services it provides, not Company A.

Say that a crew from Company B were to be involved in a wrongful death suit based upon negligence in the course of their services rendered. If the numbers don't crunch, Company B simply goes bankrupt (which sucks for personnel, but truly makes no matter to owners). The reason is that Company B has no active assets. It doesn't operate at profit, it operates at peak efficiency, spending every cent it takes in (mostly to Company A, of course).

Also, if Company B were to suffer from bad word of mouth, or bad branding, it could simply shut its doors and the owners could reopen under another name. Or, more deviously, create a sense of false competition through Company C, which offers the same services as Company B, while renting the very same equipment from Company A.
<bot>: Why can people protect assets in a company and use the renting of them to another company as a method of funneling their liquid profit out of a risky area?