Key Takeaways

  • Delaware allows physicians to form Professional Limited Liability Companies (PLLCs), giving them flexibility while complying with medical practice regulations.
  • A Delaware PLLC must be owned and controlled by licensed professionals, ensuring compliance with the corporate practice of medicine (CPOM) doctrine.
  • Physicians can protect personal assets and limit liability exposure by forming a PLLC, though malpractice claims remain a personal responsibility.
  • The Certificate of Formation must be filed by an authorized person, who may be an attorney or registered agent, and it outlines key information without requiring disclosure of all members.
  • Delaware does not require ongoing statements of information, protecting physician anonymity while still mandating an annual franchise tax.
  • Foreign and out-of-state investors can participate, but only licensed physicians may own or control a Delaware professional limited liability company.

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.

Professional Limited Liability Companies for Physicians

For licensed physicians, Delaware permits the formation of a Professional Limited Liability Company (PLLC). A PLLC is specifically designed for professionals—such as doctors, lawyers, and accountants—who provide regulated services. Under Delaware law, only individuals licensed in the relevant profession may become members or managers of a PLLC. This ensures that the ownership and management of a medical practice remain in the hands of licensed physicians, maintaining compliance with the corporate practice of medicine (CPOM) doctrine.

While a standard LLC offers general liability protection, a PLLC provides a framework that recognizes professional licensing requirements. Physicians remain personally liable for malpractice claims, but the PLLC structure shields them from business-related liabilities such as lease obligations, employee disputes, or vendor contracts

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.

Corporate Practice of Medicine Restrictions

Delaware follows a modified version of the corporate practice of medicine rule, which restricts non-physicians from owning or controlling medical practices. This means that while anonymity is available for investors in most Delaware LLCs, physicians forming a professional limited liability company must ensure that ownership remains in compliance with licensing laws. Non-physicians may contribute capital but cannot exert control over the medical decision-making or management of a PLLC.

This distinction is critical for doctors considering outside investment. Structuring ownership improperly could result in regulatory violations or professional licensing issues. For compliance, many physician practices rely on legal agreements that separate clinical control from business management.

Value of Naming a Registered Agent?

By naming a registered agent several entities can remain anonymous, including:

  • Members.
  • Managers.
  • Investors.

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.

Asset Protection Strategies for Physicians

Physicians often face higher liability risks than other business owners. In Delaware, forming a professional limited liability company provides an important layer of asset protection. While malpractice insurance remains essential, a PLLC helps shield personal property—such as a physician’s home or retirement accounts—from creditors seeking to recover business-related debts.

Additional measures that physicians in Delaware often consider include:

  • Forming separate entities for medical practice operations and real estate holdings.
  • Using trusts and estate planning tools to protect family assets.
  • Maintaining adequate liability and malpractice insurance alongside entity protections.

Together, these strategies allow physicians to safeguard both their professional practice and their personal wealth while benefiting from Delaware’s business-friendly environment.

Frequently Asked Questions

1. What is the Delaware Limited Liability Company Act authorized person?

An authorized person is the individual—often an attorney or registered agent—who files the Certificate of Formation with the Delaware Secretary of State.

2. Can physicians form a standard LLC in Delaware?

No, physicians must form a Professional Limited Liability Company (PLLC) to comply with Delaware’s licensing and corporate practice of medicine requirements.

3. Are physicians personally liable for malpractice in a Delaware PLLC?

Yes. While a PLLC protects against business-related liabilities, physicians remain personally responsible for malpractice claims.

4. Can non-physicians invest in a Delaware professional limited liability company?

Non-physicians may contribute capital, but they cannot own or control a medical PLLC due to the corporate practice of medicine restrictions.

5. Do Delaware PLLCs provide anonymity like standard LLCs?

No. While Delaware offers strong privacy protections, physician PLLCs require licensed owners to be disclosed to comply with medical regulations.

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