Delaware Limited Liability Company Act Authorized Person
Forming a pair of LLC under Delaware law allows people to invest in real estate and other business projects while maintaining a private identity.3 min read
What is the Delaware Limited Liability Company Act authorized person? Forming a pair of limited liability companies (LLC) under Delaware law allows people, such as celebrities, to invest in real estate and other business projects while maintaining a private identity.
Do LLCs Have to File a Statement of Information?
Many states, such as California, require an LLC to file a Statement of Information within 90 days of formation and then biennially thereafter. The Statement of Information must include names and addresses of each person performing in the role of management, or if the LLC does not have an acting manager, then a list of all members must be included on the Statement of Information, along with each member's name and address. This is very similar to the Uniform Limited Liability Company Act that many states have adopted as a requirement.
Therefore, the state of Delaware looks opportunely appealing to those who wish to invest in business ventures, yet keep their identity anonymous. Delaware allows a registered agent to be the only person identified in the formation and management process of a business. When the LLC business is newly formed, an authorized person is required to execute a Certificate of Formation with the Delaware Secretary of State.
What Is a Certificate of Formation?
The Certificate of Formation will contain the name of the LLC, the registered agent's name and address, and the address of the LLC. The investor does not have to be identified at formation, and there is no requirement for annual or biennial reports that would identify the investor as a manager or member. An authorized person would be the person hired to set up the LLC. This is often an attorney or could also be the registered agent listed on the Certificate of Formation.
Although an annual LLC tax, which is in the amount of $300, must be paid each year by the first day of June, the tax can be filed and paid online. Therefore, filing and paying the tax online, using a credit card, continues to protect the identity of investors who wish to remain anonymous.
Can Investors Remain Anonymous?
Luckily, investors can remain anonymous and remain in complete control over business investments by using a registered agent of choice when seeking business opportunities in Delaware. Rather than take the risk of hiring a stranger to act as CEO in an investment that is obviously significant enough that the investor wants to invest in and remain private, the investor is at will to hire an attorney or someone with such expertise in forming an LLC.
Value of Naming a Registered Agent?
By naming a registered agent several entities can remain anonymous, including:
This is beneficial in that assets can remain hidden from those who want to uncover the extent of another's wealth. Another benefit is that investors do not have to live in Delaware to take advantage of this opportunity.
Are Foreign Investors Allowed in Delaware?
The state of Delaware allows so-called foreign investors, which means you can live in another state and form a Delaware LLC. The laws and regulations to do business in Delaware are so business-friendly that you will find that many of the most well-known corporations have been incorporated in Delaware. You will also find that most of these are far from their headquarters in states such as California, Nebraska, Georgia, Michigan, Illinois or New York.
Benefits of Operating an LLC in Delaware
The fact that companies can reduce their tax obligations by shifting certain revenues to holding companies in Delaware is what makes the state so attractive when compared to other states.
In addition, there is no tax on intangible assets, such as trademarks, leases, copyrights, and royalties, which allows companies to save tons of money every year. The business-friendly laws and regulations free of red tape make the state one of the easiest and most attractive places in the country to set up a new business.
While critics may argue the lack of paperwork provides an opportunity for criminals to take advantage of the structure, the respected Court of Chancery, which was designed in 1972 and only hears business disputes, is designed and presided over by judges who are extremely well-versed in the state's business law. Not to mention, the mass amount of corporate lawyers from all over the world who are taught an extensive knowledge in Delaware business law in academic institutions all across the United States.
If you need help with understanding Delaware Limited Liability Company Act authorized person, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.