Interesting Article "The Corporate State of Delaware"
I follow Rep Kowalko on FB, and this article came across my items this morning. It's a rather long read, and it is behind a pop-up, but I thought it did a good job of explaining how DE looks at LLCs.
https://prospect.org/power/corporate-state-of-delaware/?fbclid=IwAR2ujI_vNZ9bqvMwsv-NOjQUu46LszpPJ24KRtzU-15WbZgfIDNztzXZcLI
...Most important, for decades, the LLC client never had to reveal the beneficial owner of the corporation. Most states have included this feature in their own incorporation laws. But combined with all of Delaware’s other attributes, it served as a license for anyone to create shell companies that can be used to hide or launder money, evade taxes, or keep secret any kind of financial transaction....
...As a result, a litany of bad actors have made headlines in the last decade for funneling cash through Delaware. Backpage, a site purportedly used for child sex trafficking, registered its LLC in the state. So did Trump’s former campaign chairman Paul Manafort, who used nine Delaware LLCs, along with another campaign official, Rick Gates, to hide millions of dollars coming in from Ukraine. International drug kingpin El Chapo has even made a cameo: He also supposedly had a Delaware shell company before being arrested in 2016....
...In 2017, Rep. Kowalko, the state representative who has tried to curb corporations’ overreach in the state, introduced a bill that seemed like a no-brainer. The proposed legislation would bar corporations from setting up LLCs in Delaware if their owners had been identified by federal agencies as a threat to the United States. It was all about criminality—preventing money laundering, sex trafficking, narcotics. It was by no means targeting the Fortune 500....
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