Wednesday, August 26, 2009

Who is master of the ship?

Question: With a DE LLC, since LLC agreements are not required, how do you determine who are the authorized persons acting on behalf of the LLC if there is no LLC agreement? Is the person who executed the certificate of formation the only person responsible for the entity in the absence of any operating agreement? Kayla, DE.
Response: A run on Delaware questions lately. I'm not sure what you mean by "responsible". I take it from the question that is an LLC of which you are NOT a member and, thus, you want to know how to go about discovering the identity of the members. The individual who signs the certificate of formation may or may not be a member of the LLC. How do you tell who the members are when there is no operating agreement? In some states, an annual report is filed listing the members. However, I do not believe Delaware LLCs list the members in any annual filing. The best evidence absent both an operating agreement and annual filing with the secretary of state's office is the most recent federal tax return (usually IRS form 1065 when there is more than 1 member and IRS form 1040 when 1 member). Unfortunately, tax returns are privileged information that the government does not divulge. You would need to get this type of information directly from an LLC member. You might want to contact the Delaware Secretary of State's office and ask them if there is a mechanism to find out through their office the identity of the members of a Delaware LLC.

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