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Civic groups call for investigation of Delaware LLC law

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AP) — Civic groups in Delaware are pushing for the reform of the state’s popular system for limited liability companies.

The News Journal reports the Delaware Coalition for Open Government was joined by several other groups in asking Attorney General Matt Denn to appoint an independent counsel Monday.

The independent counsel would identify weaknesses in the Delaware Limited Liability Company Act, which the petition says allows LLCs to serve “as fronts to commit crimes.” Unlike other states, Delaware doesn’t require disclosing beneficial ownership information, so owners’ identities are often unclear.

Delaware’s absentee companies have made news recently. Backpage.com employees were hit with a 93-count indictment in April. And the October federal indictment of Paul Manafort and Rick Gates mentioned nine Delaware corporations and LLCs that helped shield payments from Ukraine.

Denn’s spokesman says the request “will be considered.”

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