Registered agent for 'Panama Papers' resigns

WORLAND — M.F. Corporate Services Wyoming LLC, a registered agent in Wyoming for Panamanian law firm Mossack Fonseca, and under investigation for hiding assets in shell companies in 24 companies in the state, officially resigned as a registered Wyoming agent on Saturday.

Secretary of State Ed Murray revealed the development to the Northern Wyoming Daily News while on a tour of northern Wyoming over the weekend to review economic development in the Big Horn Basin.

“I don’t like Wyoming’s reputation being misrepresented as ‘fraud friendly,” stated Murray.

In April, in response to the publication of the Panama Papers, which indicated that shell companies were being used to hide assets across the United States, auditors from the Secretary of State’s office performed an audit of M.F. Corporate Services, and briefed law enforcement on their findings. Additionally, the Secretary of State imposed immediate sanctions on M.F. Corporate Services, within 48 hours of the audit’s conclusion on April 4.

Despite the firm’s resignation on Saturday, state and federal investigations of M.F. Corporate’s business practices will continue, noted Murray. The 24 corporations represented by M.F. Corporate have 60 days to file a new agent, or will be dissolved as Wyoming entities. According to a report by the Nevada secretary of state’s office, M.F. Corporate resigned as agent for 1,025 Nevada corporations on May 22.

The Secretary of State’s office has already initiated dialogue with the state Legislature to amend the law for future business practices looking to file for corporation status in the state.

“These findings ignited a debate across the state and at the state House about the timeliness of amending Wyoming laws [regarding business registry],” Murray told the Daily News. In response, Secretary Murray called for a roundtable evaluation of current law with lawmakers and limited liability corporation owners from across the state.

The Secretary of State’s office took the recommendations to a legislative committee in Lander, and will request changes during the next legislative session to prohibit easy manipulation of corporate status within the state. “We are seeking to add protections without adding an extra level of bureaucracy,” said Murray, noting that the U.S. Department of Treasury, the Internal Revenue Service, and the Patriot Act already provide federal-level oversight of corporations.

Benefits for legitimate business

Murray stressed the benefits for legitimate business development in Wyoming, including the state’s overall low tax burden and no corporate or individual income tax, the five-day turnaround for business fillings, the move to all-digital records and filings and low-filing fees.

In an effort to further expand and promote small business, the Secretary of State’s office worked with the Legislature to provide start-ups with an alternative source of capital, by passing legislation that allows private individuals to invest in beginner businesses.

“Crowdfunding is a practice that’s been adopted by upwards of 29 states, and allows business owners to be matched with private investors to get their companies rolling,” noted Murray. “Now, because of federal rules, new businesses often find it impossible to get traditional bank loans. Crowdfunding introduces them directly to startup money.”

Under the legislation, startup companies will register with the Secretary of State’s office for the program, and be matched with private sector investors. “You couldn’t solicit investors [in Wyoming] in the past without violating the Securities Act with exception,” said Murray, “the updates we provided to the original legislation amended all of that.”

House Bill 31 was signed into law on March 3, which creates a new uniform securities act. Replacing Wyoming’s 1965 Act, the new securities act not only provides crowdfunding provisions but also regulates state and federal investment advisers. The new law goes into effect on July 1, 2017.