Greg's Corner

Backpage still in ‘good standing’ as a Delaware corporation

Earlier this year, I published a blog post about how Backpage was a company in ‘good standing’ in the state of Delaware. Many companies incorporate in Delaware due to their lax tax laws regarding corporations and because Delaware courts have corporate proceedings ruled by a judge knowledgeable in corporate matters rather than a jury which may not be. However, this post was made months before the federal government seized control of Backpage for their alleged role in human trafficking. Now it turns out that Backpage is still a company in good standing in Delaware.

Yesterday, news station WHYY out of Wilmington, published a report that showed Backpage is not only still in good standing in Delaware but also re-registered its status as an LLC. The state Attorney General’s office could potentially revoke Backpage’s but they are still reviewing the legislation that could allow them to do that. Even with a company like Backpage that doesn’t have the most stellar reputation I can imagine the state may drag its feet on any kind of ruling considering it may affect the number of businesses incorporating in Delaware and no one wants to see anything hurt their bottom line.

Backpage isn’t the only shady company that’s been incorporated in Delaware. Again, according to WHYY, Delaware corporations were allegedly used by former Trump campaign chair Paul Manafort to launder money and commit tax fraud, infamous drug lord ‘El Chapo’ allegedly used Delaware to launder his drug money, and former Trump attorney Michael Cohen allegedly used a Delaware corporation to pay hush money to Stormy Daniels. Maybe it’s time for the First State to start paying closer attention to who their granting corporation status too before collecting their money.