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972-248-8080 DALLAS
713-830-2207 HOUSTON
512-691-4100 AUSTIN
a blue and orange check mark with the letter w on it as the Wilson Whitaker Rynell Logo

Advantages and Disadvantages of Delaware LLCs

Kayla Holderman • July 2, 2024

Understanding Anonymous LLCs in Delaware: Advantages and Disadvantages

Delaware is a popular jurisdiction for forming limited liability companies (“LLCs”), primarily due to its business-friendly laws and the ability to offer privacy to business owners through anonymous LLCs. Anonymous LLCs in Delaware provide confidentiality by withholding the names of the owners/members in public records and filings. Delaware's unique advantage of allowing anonymous LLCs, where the names of members and managers are not disclosed in public records, provides a highly valued layer of privacy. This confidentiality attracts many business owners who prioritize discretion and protection from unwanted attention. Simply, Delaware is recognized both nationally and internationally as a premier jurisdiction for business formation. Forming your company in Delaware can enhance the credibility and reputation of your business, which can be helpful in developing and expanding your business.



However, while the lure of Delaware and the layer of privacy it offers are appealing, there are also notable disadvantages to consider. This blog will explore some of the advantages and disadvantages of a Delaware LLC.

Advantages of Anonymous LLCs in Delaware


  • Enhanced Privacy Protection:

The primary advantage of an anonymous LLC is the ability to keep the identities of the members confidential. This is particularly beneficial for individuals who value privacy, such as celebrities, high-net-worth individuals, or those who want to keep their business activities discreet or separate from their personal lives.


  • Competitive Advantage:

Keeping ownership details confidential can provide a competitive edge. Competitors are less likely to discern business strategies or ownership structures, which can be particularly advantageous in highly competitive industries. Delaware LLC's also include the following additional advantages:


  • Asset Protection: Delaware LLCs offer strong protections for business owners' personal assets. The state's laws provide a well-thought out legal framework that helps shield members' personal assets from business liabilities. This helps ensure that if the business incurs debt or legal judgments, the personal assets of the members are generally protected.


  • Tax Benefits: Delaware does not impose state income tax on LLCs that do not operate within the state. Additionally, there is no sales tax, and the state offers a simplified tax structure that can be advantageous for many start-up businesses. The only significant tax is the annual franchise tax, which is relatively low for most businesses.


  • Ease of Formation:

Delaware has streamlined the process for forming LLCs, including anonymous ones. The state requires minimal information for formation, and the process can be completed quickly and efficiently.


  • Flexible Management Structure: Delaware LLCs offer great flexibility in management structures. They can be managed by members or appointed managers, allowing businesses to choose the most suitable management setup. This flexibility extends to the internal organization and operation of the LLC, enabling customized governance and operational procedures.


  • Streamlined Formation Process: The process of forming an LLC in Delaware is straightforward and efficient. The state offers an online filing system, making it easy to submit the necessary documents and form an LLC quickly. Additionally, Delaware provides excellent customer service and support for business owners.


  • Favorable Legal Environment:

Delaware's Chancery Court is renowned for its expertise in business law, providing a reliable and predictable legal environment. This stability is attractive to businesses that want to ensure their legal matters are handled proficiently. Other legal advantages incldue:


  • Strong Legal Precedent: Delaware's legal system has a long history of business-friendly rulings and established legal precedents. This provides businesses with a high degree of certainty and confidence in the legal framework. The extensive body of case law helps businesses navigate legal issues with greater clarity.


  • Investor Appeal: Delaware's reputation as a business-friendly state with strong legal protections makes it attractive to investors. Many venture capitalists and investors prefer to invest in Delaware-formed entities due to the predictability and stability offered by the state's legal environment. This can make it easier for businesses to attract investment and grow.


  • National and International Recognition: Delaware is recognized both nationally and internationally as a premier jurisdiction for business formation. This recognition enhances the credibility and reputation of businesses formed in the state, which can be beneficial for building partnerships and expanding operations.


Disadvantages of Anonymous LLCs in Delaware


  • Regulatory and Compliance Challenges:

While Delaware may not require disclosure of member identities, other jurisdictions where the LLC operates might have different rules. For instance, if the anonymous LLC conducts business in states with stringent disclosure laws, it must comply with those regulations, potentially negating the privacy benefits.  Additional challenges include:


  • Franchise Tax: While Delaware LLCs are exempt from state income tax, they must pay an annual franchise tax of at least $300, which can increase with the value of shares.


  • Foreign Qualification Fees: If your LLC operates outside Delaware, you must register in each state, incurring additional qualification and recurring fees.


  • Dual Registration Costs: You’ll need to pay for incorporation and renewal in both Delaware and your home state, leading to double the filing fees and annual reports.


  • Additional Business Expenses: All Delaware LLCs must have a state business license and an operating agreement. Also, Delaware has some of the highest unemployment tax rates, and LLC members must pay significant self-employment taxes.


  • Banking and Financing Hurdles

Opening bank accounts and securing financing can be more complicated for anonymous LLCs since owners/members are anonymous. Financial institutions typically require detailed information about the business owners to comply with anti-money laundering (AML) and know your customer (KYC) regulations.

  • Potential for Abuse:

The anonymity of LLCs can be used for illegal activities such as money laundering, fraud, or tax evasion. While most business owners use anonymity for legitimate reasons, the potential for misuse has led to increased scrutiny from regulatory and governmental agencies.

  • Increased Scrutiny from Authorities:

Due to the potential for abuse, anonymous LLCs might attract increased attention from regulatory and governmental authorities. This can result in more frequent audits, investigations, and a higher compliance burden to demonstrate that the LLC is engaged in legitimate business activities. Further, incorporating in Delaware requires dual registration if you operate in another state:


  • Two Sets of Annual Reports and Tax Returns: You must file in both Delaware and your home state, increasing administrative work and costs.


  • Two Registered Agents: You’ll need a registered agent in Delaware and one in your home state, adding to your expenses.


Important Things to Consider When Forming a Delaware LLC


It is important to note that you may have to disclose your personal information to the IRS or other government institutions in relation to your anonymous LLC. For example, you will have to disclose personal information when filing your LLC’s Beneficial Ownership Interest Report (“BOI”) including your full name, address, driver’s license, and social security number. While BOIs are not public record, you will inevitably be required to provide government institutions with your personal information as it relates to your anonymous LLC. Additionally, the benefits of anonymity also come with challenges, including regulatory compliance, banking difficulties, potential misuse, and public trust issues. Business owners must carefully weigh these factors and their specific needs and circumstances when considering forming an anonymous LLC in Delaware.


Ready to Start Your Delaware LLC?

Our Texas lawyers can guide you through the process for forming your Delaware LLC, including filing the necessary documents with the Delaware Division of Corporations and ensuring compliance with both Delaware and Texas regulations.  Our business attorneys specialize in a range of business services, such as:


  • Forming an LLC or corporation
  • Helping you Secure Registered Agent service
  • Obtaining an Employer Identification Number (EIN)
  • Business License Research
  • DBA “Doing Business As” Name
  • Membership Agreements
  • Operating Agreements
  • Corporate Bylaws
  • What Are the Benefits of Forming an LLC in Delaware?

    Forming an LLC in Delaware offers many advantages. Primarily, the ability to maintain privacy through anonymous LLCs as well as its flexible and business-friendly laws, and litigating disputes in the well-regarded Delaware Court of Chancery. These benefits provide stability, predictability, and confidentiality, making Delaware a top choice for business owners.

  • How Does Delaware Provide Privacy for LLC Owners?

    An anonymous LLC allows for the names of the LLC's members and managers to be omitted from the public records. This ensures the privacy of the identities of the business owners which is appealing to many entrepreneurs.

  • What Are the Filing Requirements for a Delaware LLC?

    To form a Delaware LLC, you must (1) file a Certificate of Formation with the Delaware Division of Corporations which does not require the disclosure of member or manager names; (2) designate a registered agent within Delaware; and (3) comply with annual franchise tax and report filings.

  • Can a Delaware LLC Operate in Other States?

    Yes, a Delaware LLC can operate in other states. However, it must register as a foreign LLC in each state where it plans to conduct business. This process typically involves filing specific forms and paying applicable fees in the other state.

  • What Are the Costs Associated with Forming a Delaware LLC?

    The costs of forming a Delaware LLC include the filing fee for the Certificate of Formation, which is currently $90. Additionally, there are ongoing costs such as the annual franchise tax, which varies based on the company's revenue. Annual Franchise tax filings typically start at a minimum of $300. Other potential costs include registered agent fees and any fees associated with filing as a foreign LLC with another state. 

A person is holding a cell phone in front of a book titled artificial intelligence
By John Wilson February 19, 2025
Copyright and Translated Content: Who Owns the Creative Rights? Understanding Copyright Law and Translation Copyright law protects creative work and bestows sole authority over the work upon the creators. For example, the owner of the work of a novel has the right over the work under the concept of the right under the copyright. Courts have found that “the degree of protection afforded by the copyright is measured by what is actually copyrightable in the publication and not by the entire publication.” See, e.g., Dorsey v. Old Sur. Life Ins. Co., 98 F.2d 872, 873 (10th Cir. 1938) (emphasis added). For translations, the situation is not very clear. Translations involve creative judgments over word translation and not the translation of mere words. Hence the knowledge about the applicability of the concept of the right over the work is essential for establishing the right over the work. For example, a Court in the Northern District of California stated that: “ the determinative question is whether Plaintiff holds a valid copyright. ” Signo Trading Intern. Ltd. v. Gordon, 535 F. Supp. 362, 363 (N.D. Cal. 1981). The Signo Trading Court dismissed Plaintiff’s infringement claims because plaintiff did not have a valid copyright as a matter of law in the translations and transliterations at issue because they lacked the “requisite originality.” Id. at 365. Can Translation Be Considered a Creative Process? The Practice of Translating Translation goes beyond the replacement of one word by the equivalent word from the source text. Translating literary work, poetry, and fiction with deeper meanings beyond the surface text is a complex, artistic process. Translating books like The Iliad, for instance, requires the practice of artistic translation to translate the emotions, thoughts, and the culture correctly. Technical Translations and Legal Translations Conversely, technical writing and texts for the law need less creativity and instead value correctness over all else. These writing forms require strict adherence to the original sense, leaving very little room for artistic interpretation. Translations for these writing forms thus typically involve less creative contribution and less potential for the work being protected by copyright. Why Is Creativity Important for Translations for Copyright? Originality when translating For a work to be subject to copyright, some creativity, however slight, is essential. Even when the translation is taken from the work, the translation also includes some creative work by the translator. This creativity can make the translation subject to copyright. A derivative work must “recast, transform[], or adapt[]” a preexisting work and “consist[] of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship.” Id. In other words, it must change or alter the pre-existing work’s content and must itself be an original work of authorship. The Supreme Court stated that “ [t]he sine qua non of copyright is originality ” and that “ [t]o qualify for copyright protection, a work must be original to the author. ” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991) at 345. “Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.” Id. (citing 1 M. Nimmer & D. Nimmer, Copyright §§ 2.01[A], [B] (1990)). In granting a Rule 12 motion to dismiss, the Signo Trading Court held that: " It is inconceivable that anyone could copyright a single word or a commonly used short phrase, in any language. It is also inconceivable that a valid copyright could be obtained for a phonetic spelling, using standard Roman letters, of such words or phrases. Although lists of words and translations of larger works may be copyrightable, Plaintiff cannot claim credit for any of the elements which make those things copyrightable. For these reasons, Plaintiff does not hold a valid copyright on the translations or transliterations ... " Signo Trading, 535 F. Supp. at 365. The Problem of the Derivative Work However, translations are generally "derivative works" - derived from the work of another. Because of this, the owner or author of the work is generally required to agree to the translation. Translations made illegally can be held under the classification of copyright violations, even when the translator has added creative elements. Who Has the Right over the Translated Work? Employer-Commissioned Translations Ownership of the copyright for the translation work varies. If the translation is commissioned by the owner of the original work, the owner will retain the right. Even when the translator adds creativity by passing over the original emotions and thoughts, the owner will not necessarily lose the right over the translation work. In some circumstances, the translation work can be accredited by the translator without them holding the right over the work. Independent Translations If a translation is performed independently by the translator, the translator can even be identified as the co-author of the translation. Nevertheless, the author typically has the underlying copyright, restricting the translator’s right over the work. Creative Translations from the Public Domain In certain cases, a translation may be creative enough to warrant its own copyright. For example, a translator adapting a classic work or a book in the public domain into modern language may introduce enough originality to qualify for copyright protection. However, direct, word-for-word translations are typically not considered original enough to receive new copyright protection. What About Machine Translations? The Human Creativity Copyright Requirement Machine-generated translations, including those produced by platforms like OpenAI , operate through advanced algorithms that replicate language patterns rather than capture the human touch. Unlike translations crafted by human translators who often infuse cultural insight and genuine emotion into the work, OpenAI's output is rooted in statistical patterns and data. Consequently, while these translations are impressively efficient and accurate, they typically fall short of the originality required for copyright protection. This distinction underscores the human creativity requirement needed to secure a valid copyright . Ultimately, although machine-generated translations serve as powerful tools, they do not offer the same legal and creative protections as those provided by human translators. The Bottom Line: Navigating Copyright in Translations Translations occupy the middle ground under the law of the copyright. Albeit the right of the original author generally has the right under the copyright, the right under the copyright can also be claimed by the translator provided the translation is creative enough. Central considerations here include the creativity the translator has added, the nature of the work being translated, and whether the work is under the public domain. These considerations establish the right of the owner under the copyright for the translation. Why Wilson Whitaker Rynell for Your Copyright Work? At Wilson Whitaker Rynell, our professional lawyers specialize in the practice of copyright law and copyright litigation , including the complex subject matter of translation work. We can provide you with advice about the ownership of your work under the provisions of the copyright, and protect your creative property. If you are the author, the publisher, or the translator, you can rely upon the advice from our firm. Copyright Translation FAQS
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Female Divorce Attorneys in the Dallas-Fort Worth Area In many instances, divorce cases are challenging and emotionally taxing experiences. For this reason, it’s common for people to prefer working with an attorney of the same gender because they feel as though the attorney can empathize and understand their situation more. At the end of the day, the gender of your attorney may not affect the outcome of your case, but it’s important to feel as comfortable as possible while navigating through the process. At Wilson Whitaker Rynell, our experienced female divorce attorneys offer compassionate and empathetic approaches while they develop a comprehensive legal strategy to represent you. Why Should You Choose a Female Divorce Lawyer? There are many reasons why hiring a female divorce attorney can help you throughout your divorce. For one, they often have experience working on issues that disproportionately affect women in divorce such as spousal support (alimony), child custody disputes, and asset division. Additionally, female divorce lawyers offer a unique level of empathy, understanding, and communication. As a result, many clients feel that they are more approachable and compassionate, which is beneficial when dealing with the emotional turmoil of the process. More importantly, female divorce attorneys are more familiar with how the court treats women in divorce cases and use this knowledge to strategically protect their clients’ interests, whether male or female. Why Our Female Divorce Attorneys May be Right for You At Wilson Whitaker Rynell, our female divorce attorneys are skilled, knowledgeable professionals, they also have many years of experience in handling complex divorce cases. Whether it’s issues surrounding custody of children, alimony, or asset division, our female divorce lawyers ensure each client receives high-quality legal advice. Our firm’s female divorce attorneys provide the highest level of personal attention, ensuring that each client’s unique needs and concerns are addressed through every step. Unique Challenges Women Face in Family Law Disputes in Texas Family law disputes can be emotionally charged and legally complex, especially for women navigating the process in Texas. Women often encounter unique challenges due to their roles in the marriage and family dynamic, particularly when it comes to child custody, child support, and the division of marital assets. Child Custody Challenges In many marriages, women take on the primary caregiving role for their children. However, when it comes to custody decisions, courts in Texas prioritize the best interests of the child over parental gender. While this often works in favor of mothers, women may still face hurdles in proving they are better suited to provide the stable environment the child needs, especially if their ex-spouse disputes custody. Factors such as work schedules, living arrangements, and financial stability can come under scrutiny. Child Support Issues While Texas law allows women to seek child support, collecting these payments can sometimes prove difficult. Women awarded child support may find themselves dealing with ex-spouses who delay payments, make partial payments, or refuse to pay altogether. Enforcing child support orders often requires legal intervention, which can add to the emotional and financial strain. Division of Marital Assets In Texas, a community property state, marital assets are typically divided equitably during divorce. Women who are awarded assets such as the family home may face challenges related to maintaining the property, refinancing a mortgage, or covering associated expenses. 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Help you create the future you want by offering trusted legal advice. Use efficient methods to minimize unnecessary costs and keep the process manageable. Navigating family law disputes requires a thorough understanding of Texas family law and strong advocacy. Women facing divorce or other family law issues are encouraged to seek an experienced family law attorney who can provide personalized guidance. A skilled lawyer can help craft a strategy that protects their rights and ensures a fair resolution. This includes representing their interests in court, negotiating settlements, and helping enforce orders such as child support or spousal maintenance.
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By John Wilson January 23, 2025
Understanding Writs of Execution in Texas: A Layperson’s Guide If a court determines that someone owes money to another party, the debtor—referred to as the "judgment debtor"—typically has 30 days to pay off the debt. If the debt remains unpaid after this time, the creditor, or "judgment creditor," can take legal action to enforce the payment through a Writ of Execution . This legal process, governed by Texas law, enables creditors to collect what they are owed by seizing and selling the debtor’s non-exempt assets. What Is a Writ of Execution? Under Texas Rules of Civil Procedure 629 , a Writ of Execution is a court order that authorizes a sheriff or constable to seize the debtor’s property to satisfy the debt. This writ is an essential tool for creditors when voluntary repayment has not occurred. Once the writ is issued, it is handed over to a county constable or sheriff, who is required to act “without delay” in collecting the debtor’s real and personal property. The seized property is then sold, and the proceeds are used to pay off the debt. If multiple writs are filed against the same debtor, the assets are distributed in the order the writs were received. What Property Can Be Seized Under a Writ of Execution? Texas law is very specific about which types of property can and cannot be seized to satisfy a judgment. Exempt Property Certain assets are protected from seizure under Texas Property Code § 41.001. These include: The debtor’s homestead (primary residence) Wages earned from employment Professionally prescribed health aids Workers’ compensation benefits College savings plans Some insurance benefits Personal property valued up to $50,000 for individuals and $100,000 for families Unique to Texas, the law also protects items like family Bibles, two firearms, pets, and for rural residents, livestock (e.g., 12 head of cattle and 120 fowl). This extensive list reflects Texas's cultural heritage and values. Non-Exempt Property Assets that are generally not exempt include: Vacation homes Timeshares Pleasure boats Airplanes Jewelry exceeding certain value thresholds The specific procedures for seizing different types of property are detailed in Texas Rules of Civil Procedure 639 . Can a Writ of Execution Be Avoided? Judgment debtors have a few options to avoid the execution of a writ: Filing a Supersedeas Bond A supersedeas bond can temporarily halt enforcement of the writ. This bond, filed with the county clerk or justice of the peace, preserves the status quo while the debtor seeks further legal remedies. This option is governed by Texas Rules of Civil Procedure 634 . Challenging the Execution Debtors can file a claim for wrongful execution in situations such as: The debt has already been paid Exempt property is being seized The levy is excessive Additionally, courts take extra care to protect property classified as a homestead under Texas Property Code § 41.002(c) . When only one spouse is responsible for the debt, Texas Family Code § 3.202(a) and related provisions provide guidance on levying against community or separate property. The Role of County Officials in Executing the Writ Once the writ is issued, its enforcement falls on county officials, typically a sheriff or constable. These officials must act in accordance with Civ. Prac. & Rem. Code § 34.072 , which requires them to execute the writ and report back to the court. They must: Give proper notice of the sale of seized property Ensure the proceeds are appropriately delivered to the creditor Avoid overstepping legal boundaries, such as seizing exempt property Failing to execute the writ properly can result in serious consequences, where a sheriff’s refusal to levy on a property initially listed as exempt (but later deemed abandoned) led to court action and damages awarded to the creditor. Preventing Fraudulent Transfers One challenge creditors face is when debtors attempt to hide or transfer assets to avoid collection. To address this, Texas follows the Uniform Fraudulent Transfer Act under Tex. Bus. & Comm. Code § 24.001 et seq .. This act provides legal remedies to creditors when a debtor’s transfer of assets is deemed fraudulent. Effect of a Defendant's Death on Writs of Execution Under Civ. Prac. & Rem. Code § 34.072 , the death of a defendant after a writ of execution is issued halts execution proceedings. However, any lien acquired from the writ's levy is still enforceable by the county court when paying off the deceased's debts. Why Proper Execution Of The Writ Is Crucial The rules for filing and serving a Writ of Execution are strict and detailed. Missteps, such as filing the writ in the wrong county, failing to serve the proper parties, or missing key deadlines, can lead to delays or even render the writ ineffective. Both creditors and debtors must ensure compliance with these rules to avoid unnecessary complications. For creditors, failure to properly enforce the writ could mean losing the opportunity to collect on a judgment. For debtors, not responding appropriately to a writ could result in the loss of valuable assets, even those that might have been exempt.
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The Wilson Legal Group are Dallas attorneys that specializes in Patents, Trademarks, Copyrights, Trade Secrets, Complex Litigation, Business/Corporate Law, Family Law and Real Estate Law. At the Wilson Legal Group, our clients are our focus. Our philosophy is simple and straight-forward: Understand our clients' needs, hopes, and interests in order to help them flourish. Our staff strives to build strong relationships with our clients in order to appreciate their best interests and help them achieve their goals.

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