Mark Zuckerberg was happy to have anyone and everyone know that he was behind Facebook because he was operating a legal business. Other, scarier typesterrorists, drug dealers, kleptocrats, and tax evadersuse so-called "shell corporations" to hide illegal money. The incorporation documents are submitted by lawyers or other professionals who do not actually own the organization, without revealing the names of the true owners.

In one case, a Nevada corporation received thousands of suspicious wire transfers totaling millions of dollars, but the authorities could not identify who was involved because there was no way to determine the actual ownership of the company. Shell corporations are listed as the buyer of almost half of the homes in America that sell for over $5 million.

The U.S. Treasury issued new regulations requiring banks and mutual funds to verify the owners of any corporation or LLC that opens an account. And the Treasury has a program to identify the real buyers behind the purchase of luxury real estate. What about states?

Should states require corporations to disclose more information? Should they assume the role of corporate police and risk a decline in revenue from businesses that want to be secret? What is the right thing to do? What would Kant and Mill say?

Questions:

1.Should states implement a system that requires businesses incorporated in their states to disclose foreign investors and/or their use of foreign sources of capital? Why or Why Not?

2.Would such a system have a positive or negative effect on business formation? Why?