Ontario Global Research

The mechanisms of secrecy

7/20/2012

How can the Delaware LLC be filed without the owner’s name being listed on the public record?”  That is the most popular question that I hear on a daily basis. The purpose of this post is to spell out exactly how it is possible to file a Delaware LLC and how to protect your ownership if you file and decide not to list your member’s names on your formation documents.

Frank Dosebio, director of business filings at Evedex LLC says:
"The only document required to be filed in Delaware to create the LLC, is the Certificate of Formation. Unlike other states, Delaware requires very little information to be made public in order to form an LLC. The Certificate of Formation filed with the Delaware Secretary of State is required to contain only two articles: the name of the Delaware LLC and the address of the Delaware LLC’s registered office and the name and address of the Delaware LLC’s registered agent in Delaware. At Evedex LLC we serve as registered agent for more than 3000 companies.

In Delaware, members and managers are not required to be named in or to execute the Certificate of Formation. Preparation, execution and filing of the Certificate of Formation must be handled by an authorized person or entity such as Evedex LLC. An authorized person is an individual or entity that forms an LLC on behalf of the members by filing the necessary formation documents with the Delaware Secretary of State and providing the Certified documents to the members. Normally, the authorized person is the LLC’s registered agent or attorney. The powers of the authorized person are just to execute the filing of the document with the Delaware Division of Corporations. Once the document is filed the authorized person will deliver the LLC to the initial member(s). The legal instrument that releases the LLC to the initial member(s) is called the “Statement of the Authorized Person”, this statement is prepared and signed by your agent and is not provided to the State of Delaware. It is NOT required to be filed publicly in Delaware.

The next question we tend to get from Frank  is “How is the ownership shown in the LLC if the public record contains no names?” 
Frank Dosebio Evedex LLC:  "Well Jorge, the fundamental terms of an LLC’s ownership, operation and management are set forth in its LLC agreement.  An LLC agreement can be a written document or merely an oral understanding. A written agreement, however, is typically used because it memorializes the understanding and agreements of the members, which, in the event of a later dispute or misunderstanding (or the unfortunate possibility of litigation), is an invaluable protection in the interest of all parties involved. Although each LLC agreement is different, an LLC agreement will generally set forth certain fundamental terms such as:

  • The ownership percentage of each member
  • The manner in which profits, losses and expenses are allocated
  • The authority of members to bind the LLC and participate in day-to-day management
  • The voting rights of each member in making certain key decisions
  • The circumstances under which a member may withdrawal from the LLC, and the way in which the member’s economic interest is calculated upon withdrawal
  • The ability of a member to sell or pledge its interest to a third party
  • Terms contemplating the death or disability of a member
  • The circumstances and terms under which new members may be admitted
  • The circumstances under which the LLC will be liquidated, and the priority of claims among the members upon liquidation
  • Indemnification rights (if any) in the event the LLC or member is sued in connection with the business of the LLC

Delaware does not require that the LLC agreement be filed and made publicly available.  Should you need assistance in creating the, ever so important LLC agreement, go to our website.

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