Wyoming attempts to plug a shell company loophole

The Wyoming legislature is in session for the next few weeks. One of the pending bills aims to plug a loophole that allows people to own or control Wyoming corporations and companies anonymously. As I have wrote about in the past, as the law is currently written, someone can setup a Wyoming business entity through a registered agent and hide the true owner of the entity from both the public and State government. This unique privacy function has contributed to Wyoming being known as a haven for corporate secrecy.

I think that this bill was enacted in response to last year's scandal involving the Panama Papers and Mossack Fonseca embarrassed the State of Wyoming and gave new energy to efforts by the State to rein in the loose regulation which sometimes allows Wyoming entities to be used for fraud. In furtherance of that effort, the pending bill seeks to change who qualifies as a communications contact for Wyoming companies and corporations. Existing law allows most anyone to be listed as a communications contact, including the registered agent. The pending bill would change that to require that the communications contact be someone legitimately connected to the entity, such as a director, office, member, manager, managing partner, trustee or employee. This will not remove all the problems with secrecy in Wyoming, but it would remove one layer of the deep anonymity allowed for Wyoming entity owners.

We will be watching the Wyoming legislative session to see how this bill progresses.

 UPDATE: HB 22 was passed as Enrolled Act 105 and became law, effective July 1, 2017.

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