President Donald Trump’s lawyer used a private Delaware company to pay a former adult-film star $130,000 in return for her agreeing to not publicly discuss an alleged sexual encounter with Mr. Trump, according to corporate records and people familiar with the matter.

The lawyer, Michael Cohen, established Essential Consultants LLC, on Oct. 17, 2016, just before the 2016 presidential election, corporate documents show. Mr. Cohen, who is based in New York, then used a bank account linked to the entity to send the payment to the client-trust account of a lawyer representing the woman, Stephanie Clifford, one of the people said.

Mr. Cohen’s decision to establish the company in Delaware offered him privacy and simplicity, hallmarks of a state that has attracted more than one million business entities. Unlike some states, Delaware doesn’t require companies to publicly disclose the names of their managers. In October 2016, the month Mr. Cohen created the entity used in the deal with Ms. Clifford, Delaware officials recorded 10,574 new limited liability companies.

Mr. Cohen’s connection to Essential Consultants LLC isn’t readily apparent in online searches of Delaware companies. However, on its formation documents, which were reviewed by The Wall Street Journal, Mr. Cohen listed himself as the “authorized person” for the company, rather than hiring a lawyer or an agent to serve in that role, which some company owners do to further obscure their identities.

To further mask the identities of the people involved in the agreement, the parties used pseudonyms, with Ms. Clifford identified as “Peggy Peterson,” according to a person familiar with the matter. Part of the draft settlement pact was published by Slate.

The Wall Street Journal reported on Friday that Mr. Cohen arranged to pay Ms. Clifford, who starred in adult films under the name Stormy Daniels, in October 2016, after negotiating a nondisclosure agreement with her lawyer, Keith Davidson, according to people familiar with deal. Ms. Clifford privately has told people she had a sexual encounter with Mr. Trump after meeting him at a July 2006 golf tournament in Lake Tahoe, people familiar with the matter said.


In emails to the Journal last week, Mr. Cohen didn’t address the $130,000 payment but said of the alleged sexual encounter that “President Trump once again vehemently denies any such occurrence as has” Ms. Clifford. He also declined to discuss Essential Consultants, and asked the Journal to “cease wasting my time.”

Mr. Cohen and his lawyer didn’t respond to emails Thursday seeking comment.

The Journal previously reported that Ms. Clifford, 38 years old, had been in talks with ABC’s “Good Morning America” in the fall of 2016 about an appearance to discuss Mr. Trump, according to people familiar with the matter.

Mr. Cohen last week sent the Journal a two-paragraph statement by email addressed “TO WHOM IT MAY CONCERN” and signed by “Stormy Daniels” denying that she had a “sexual and/or romantic affair” with Mr. Trump. “Rumors that I have received hush money from Donald Trump are completely false,” the statement said.


Ms. Clifford didn’t respond to a request for comment Thursday and didn’t respond to several emails seeking comment last week.

A White House official last week also denied any sexual encounter took place and declined to comment on any agreement. The White House didn’t immediately respond to a request for comment on Thursday.

Mr. Davidson referred the Journal to his previous statement: “I previously represented Ms. Daniels,” Mr. Davidson said, referring to Ms. Clifford’s stage name. “Attorney-client privilege prohibits me from commenting on my clients’ legal matters.”

After the Journal published its story Friday, several media organizations said Ms. Clifford or her manager discussed the alleged sexual encounter with them in the weeks before the 2016 election.


Mr. Cohen initially had planned to make the $130,000 payment using an entity called Resolution Consultants LLC, according to some of the people familiar with the matter. He created the company on Sept. 30, 2016, Delaware records show.

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On the morning of Oct. 17, 2016, he created Essential Consultants, according to state records. Two minutes later, he dissolved Resolution Consultants, the records show. It isn’t clear why he closed Resolution Consultants.

Mr. Cohen said in an email last week that Resolution Consultants conducted no business and had no bank account.

“You’re [sic] obsessive drive to prove a false narrative, one that has been rebuked by all parties, must come to an end,” Mr. Cohen said in another email last week.


Mr. Cohen also used Essential Consultants to enter into a consulting agreement last year with 4C Health Solutions, a Midlothian, Va.-based company that focuses on detecting fraudulent health-care billings, according to a copy of the agreement available online. Mr. Cohen joined the board of 4C, whose corporate name is HealthcarePays Network LLC, in March, the Journal reported.

—Rebecca Ballhaus contributed to this article.

Write to Joe Palazzolo at joe.palazzolo@wsj.com and Michael Rothfeld at michael.rothfeld@wsj.com