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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsDecember 2018

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Pursuant to 29 Del.C. §8703(7), the Department of State ("DOS" or "the Department") published proposed regulations to establish customer entity verification requirements for registered agents in the September 1, 2018 edition of the Delaware Register of Regulations. Having solicited and received public comment on the proposed regulations in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101, et. seq., this is the Department's Order adopting the proposed regulations, as modified by the public submissions outlined below.
1. House Bill 404 of the 149th Delaware General Assembly, as amended by House Amendment No. 1 and Senate Amendment No. 2, 81 Del. Laws. C. 334, modified 8 Del.C. §132 and 6 Del.C. §§15-111; 17-104; 18-104 to authorize the Department to establish uniform entity verification regulations for registered agents to verify the identification of their customer business entities.
3. The Delaware Register of Regulations published the proposed regulations on September 1, 2018. Following publication in the Delaware Register of Regulations, DOS invited a period of forty-five (45) days for written comment from the public.
1. The Delaware Register of Regulations published the proposed regulation to establish customer entity verification requirements for registered agents on September 1, 2018.
2. Following publication in the Delaware Register of Regulations, the DOS provided a period of forty-five (45) days for written comment from the public.
3. The public notice and opportunity to provide public comments in writing afforded by DOS complied in all respects with the Delaware Administrative Procedures Act, Section 10115 of Title 29 of the Delaware Code.
5. The Department finds that it is authorized to establish uniform entity verification regulations for registered agents to verify the identification of their customer business entities pursuant to House Bill 404 of the 149th Delaware General Assembly, as amended by House Amendment No. 1 and Senate Amendment No. 2, 81 Del. Laws. C. 334, which modified 8 Del.C. §132 and 6 Del.C. §§15-111; 17-104; 18-104.
10. DOS determines that the changes included into the regulation as the result of the public comment are procedural and not substantive in accordance with 29 Del.C. §10118(c). When the public notice fairly apprises the public of the issues contemplated by the agency in the rulemaking process, changes made to the proposed rule in consideration of the public comment do not require another notice period. Collazuol v. Tulou, 1996 WL 658966 (Del. Super. Oct. 31, 1996).
IT IS SO ORDERED this 20th day of November, 2018 by the Delaware Department of State.
House Bill 404 of the 149th Delaware General Assembly, as amended by House Amendment No. 1 and Senate Amendment No. 2, 81 Del. Laws, Ch. 334, modifies 8 Del.C. §132; 6 Del.C. §§[15-111,] 17-104 and 18-104 to enable the Secretary to establish regulations for Registered Agents to verify the identification of their customer business entities.
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
["Blocked Persons" means those persons or entities listed as such with the Office of Foreign Assets Control.]
"Business Entity Formation" means [the act of] any person, partnership, association, corporation, company, singly or jointly with others, [that organizes in organizing] under the Delaware Code and [files filing] the required documents with the Division of Corporations in the Department of State[, but shall expressly exclude a nonprofit association as set forth at 6 Del.C. §1910].
"Business Entity Representation" means any person, partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership)), association, corporation, company, singly or jointly with others, that acts [and/or speaks] on behalf of any person or entity as a registered agent.
"Corporation" means an entity that is organized or incorporated in accordance with the Delaware Code and as expressly set forth at Title 8 of the Delaware Code.
["Customer" means the person or persons intending to form, and/or otherwise conduct activities through, a business entity formed, registered or qualified in Delaware.]
"Customer Information" means any and all information or documents relating to the true and correct identity of a potential customer of a Registered Agent that includes, but is not limited to, full name, complete address (to include background information related to a P.O. Box address), photographs, background information, or any other information as needed to verify identification.
"Department" means the Delaware Department of State.
"Limited Liability Company" means an entity that is organized or created in accordance with the requirements of a "limited liability company" [or a “series”] as set forth in the Delaware Code and as expressly defined at 6 Del.C. §18-101, as amended.
"Limited [Liability] Partnership" means an entity that is organized or created in accordance with the requirements of a "limited liability partnership" as set forth in the Delaware Code and as expressly defined at 6 Del.C. §17-101 as amended.
"Office of Foreign Assets Control" means the office or its equivalent office(s) as created by federal laws and administered by order of the United States Department of the Treasury or its successor(s) or equivalent department(s).
"Partnership" means an entity that is organized or created in accordance with the requirements of a "partnership" as set forth in the Delaware Code at 6 Del.C. §15-202 as amended.
"Registered Agents" means an agent or agents as defined or described in accordance with the Delaware Code and as expressly set forth at 8 Del.C. §132 and 6 Del.C. §§15-111, 17-104 and 18-104.
"Secretary" means the Secretary of the Delaware Department of State.
"Specially Designated Nationals [and Blocked Persons (SDN)]" means individuals, groups and entities as defined or described as "Specially Designated Nationals" by the Office of Foreign Assets Control.
"Trust" means a statutory trust as set forth in the Delaware Code and as expressly defined in 12 Del.C. Ch. 38 as amended.
4.1.1.1 Registered Agents will take reasonable steps to verify the identity of potential customers. Such steps may include, but are not limited to, [manual verification,] the use of software or third party services to perform background or identification verification or obtaining such documents sufficient for identity.
4.1.2.1 Registered Agents shall compare new customer information against the register and lists of the Office of Foreign Assets Control (“OFAC”), before [accepting performing services on behalf of] any new customer. Customer information shall include the full name and complete address of the submitting customer (whether business or individual).
Last Updated: December 31 1969 19:00:00.
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