Delaware LLC: What's on Public Record?
Corporations and LLC privacy is a huge drawing point for those considering to incorporate there business here in Delaware. Resonably so many people who form an LLC or corporation in Delaware want to know exactly what information is public.
Delaware LLC: Privacy & Public Information
A Delaware LLC filed through a professional Registered Agent affords you the highest level of confidentiality. When it comes to an LLC's public information, only the company name and the name and address of the Registered Agent typically appear on the Certificate of Formation, along with the date of filing and the company file number.
Here is what Delaware LLC privacy offers:
- No information about the members or managers is required to be listed on the Certificate of Formation.
- The Delaware Division of Corporations does not request, obtain or store any information regarding the LLC’s members and managers.
Your Delaware Registered Agent is required, however, to maintain a record of the contact person for the LLC, including the contact person's address. The contact person must be an actual person (not another company) who is at least 18 years of age. The contact person does not have to be a member or manager of the LLC and does not need to reside in the United States or be a United States citizen.
In Delaware, members and managers are not required to be named in, nor to execute, the Certificate of Formation. Preparation, execution and filing of the Certificate of Formation must be handled by an authorized person or entity. This 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 then providing the certified documents to the members of the LLC.
The powers of the Authorized Person are merely to execute the filing of the document with the Delaware Division of Corporations. Once the document is filed, the Authorized Person delivers 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 the Authorized person and is not provided to the state of Delaware. It is not required to be filed in Delaware public records.
What about Information on Payment Method?
After the initial formation, a Franchise Tax of $300 for the prior year's Franchise Tax is required to be paid, on or before June 1 of each year. If the Franchise Tax is not paid on time, a $200 penalty is assessed on June 2, and interest is assessed immediately.
All Franchise Tax payments show up on the Delaware public records, including the date and amount of each payment. If you pay your Franchise Tax on the state's website, the state will then have a record of the transaction, including the credit card number used.
However, if we are your Registered Agent and you take advantage of our service to pay the Franchise Tax through our website, your credit card number will not appear on the Delaware public records, since we pay many companies' Franchise Taxes in bulk payments via our direct deposit account with the state of Delaware. Again, in this case, neither your member nor your management data will appear on any Delaware public records.
For Delaware LLCs formed and maintained through Harvard Business Services, Inc., the state of Delaware's public record will, therefore, contain no information about your LLC's members and/or managers. 100% of your Delaware LLC is not on the public record, making Delaware one of the best states for LLC privacy.
How can an LLC member prove ownership if the public record doesn't contain names?
The fundamental terms of an LLC's ownership, operation and management are set forth in an LLC Operating Agreement. An LLC Operating Agreement can be a written document or merely an oral understanding.
A written Operating Agreement, however, is typically used because it memorializes the understanding and agreements of the members which, in the event of a later dispute, misunderstanding, litigation or death, is an invaluable protection for all parties involved.
Although each LLC Operating Agreement is different, an LLC Operating Agreement generally sets 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 key decisions
- The circumstances under which a member may withdraw 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 his/her 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 LLC's business
Delaware does not require an LLC Operating Agreement to be filed or added to the Delaware public records.
Delaware Corporation: What is on Public Record?
Corporations can also be filed in Delaware through a Registered Agent without listing shareholders, directors or officers on the public record.
However, after the initial filing, every Delaware corporation is required to file a Franchise Tax report on or before March 1 of each year and, in doing so, must list the names and addresses of the company's directors and one officer.
This information is required even if your Delaware Registered Agent pays your Franchise Taxes for you. Therefore, this information will be in the Delaware public records and may be obtained by anyone requesting it from the Delaware Division of Corporations (for a $10 payment). Some states post this information on their websites, but Delaware does not.
LLC & Corporation Public Records
When self-filing either type of entity directly with the Delaware Division of Corporations, individuals are required to list their name and address as the incorporator of the company on the formation documents.
These documents can be viewed on the Delaware public record from the first day the company is formed and will remain on the Delaware public record for the life of the company.
Privacy and confidentiality regarding the public record should not be mistaken for invisibility in the eyes of the authorities, should fraud occur and be discovered. The Delaware Attorney General's Office is diligent in punishing the fraudulent use of Delaware companies.
The necessity of possessing the ability to shield a company's ownership from public records plays a valid role in today's business world. Business is very competitive by nature, and the element of confidentiality can be crucial in many perfectly legitimate business transactions that would not happen without strict confidentiality.
As one of the best states for LLC privacy, you can form a Delaware LLC on on our website by following the link below.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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There are 9 comments left for Delaware LLC: What's on Public Record?
John David Mohan said: Tuesday, August 30, 2022Are the directors and officers of a C-Corp public information ?
HBS Staff replied: Tuesday, August 30, 2022Hi John,
Thank you for reading our blog and your question. At the initial time of filing a Corporation here in Delaware all Directors and Officers information is not on the public record, but after the first year when you file your Annual Report the State of Delaware does require you to list the Physical Office Address, All Directors Names and Address and list at least one officer. While it is not available on the State of Delaware's website, if they know the specific thing to ask for the Annual Report can be obtained.
MC said: Wednesday, March 3, 2021Regarding a C-Corp in Delaware, can the director and the officer be the same person?
HBS Staff replied: Sunday, March 7, 2021Yes, one person can be the sole owner and hold all company positions in a Delaware Corporation.
Lonniedum said: Monday, January 25, 2021We are so glad to have stumbled across this web page, it is exactly what I have been looking for. The detailed information on this website is definitely appreciated and is going to assist me several times a week. It shows that the site acquired a significant amount of info concerning the things I am interested in and the other hyper links and info like wise show it. Typically i'm not on the internet most of the time but when I get a chance I am more often than not searching for this type of information or others closely related to it.
HBS Staff replied: Friday, January 29, 2021Thank you for reading our blog and we are glad you found this article to be informative.
jenn said: Monday, April 20, 2020Hi! I know that using you as a Registered Agent means that our name/address won't show up on the Certificate of Formation. Does this therefore ALSO mean that our name/address will never show up on any public business filing records?
HBS Staff replied: Monday, April 20, 2020As far as the State of Delaware's public database, no names of an LLC's members will appear on public record and only the address of the LLC's registered agent will be shown. Corporations have some additional disclosures on their annual reports (noted in this article). Please feel free to call, email or live chat with us if you have specific concerns we have not addressed.
David said: Wednesday, March 4, 2020Am I still required to pay the Franchise Tax for the second year if the LLC folds in the first 9 months?
HBS Staff replied: Thursday, March 5, 2020Delaware requires that LLCs pay the full franchise tax amount ($300) even if the company existing for just one day of the year. For example, if you closed your company in January 2019, the state still assesses the $300 tax due by June 1, 2020.
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