Hiring a Lawyer as Director for Privacy in a Delaware C Corporation
One of the primary reasons businesses incorporate in Delaware is the statersquo;s favorable regulations and the protection they offer to business owners. But what if you want to ensure your name isnrsquo;t disclosed in the annual franchise tax report? This article explores the options and considerations for maintaining privacy while being a director of your Delaware C corporation.
Why Not Ask a Delaware Lawyer to Be Your Director?
When you take the step of incorporating in Delaware, itrsquo;s natural to involve a Delaware attorney in the process. They can help guide you through the intricacies of the legal framework, ensuring your business is set up correctly. One of the benefits of this approach is that you can leverage their expertise to manage aspects of your corporation more discreetly. For instance, if you want to avoid having your name disclosed in the annual franchise tax report, you might consider hiring a lawyer or another trusted individual to act as your director.
Public Disclosure in Public Corporations
Itrsquo;s important to note that if your C corporation is publicly traded, your name must be disclosed in the annual report as a significant shareholder. Publicly traded companies are required by law to disclose the names of their principal stockholders and board members to ensure transparency and compliance with securities regulations.
Directorship and Potential Risks
Another consideration is the potential for mismanagement or skullduggery by directors. If you are not involved in the day-to-day operations and oversight of your corporation, there is a theoretical risk that the directors might engage in activities that you are not fully aware of. While this risk is real, it is often minimized by regulatory frameworks and due diligence practices.
Structuring for Privacy
If you strongly desire privacy and anonymity, there are alternative structures to consider. One effective approach is to form a Wyoming LLC as a holding company with a designated agent for annual reports. The Wyoming LLC would primarily hold the shares or membership interests of your corporation or another entity. Your personal trust would be the sole member of the Wyoming LLC. Your Florida business, which would be a corporation (C or S) or an LLC taxed as a C Corp or S Corp, would then operate under the umbrella of the Wyoming LLC.
The fees for formation and maintenance in Wyoming are generally lower compared to Delaware, making this a cost-effective choice. Additionally, Wyomingrsquo;s privacy and LLC laws are often regarded as more favorable, offering greater protection for the identities of business owners and members.
Conclusion
To summarize, while you cannot own a corporation anonymously without being listed legally, you can structure your business to maintain privacy. By utilizing the expertise of a Delaware attorney, forming a Wyoming LLC, and carefully structuring your ownership interests, you can achieve a high level of privacy while operating your Delaware C corporation effectively.
Ultimately, the choice of structure and ownership depends on the specific needs and regulatory environment of your business. It is always advisable to consult with a legal expert to ensure that your selected structure aligns with your goals and complies with all relevant laws and regulations.