This guide discusses the in's and out's, pros and cons, and limitations around Anonymous LLC's
What is an Anonymous LLC?
An anonymous LLC means the state where it's registered does not maintain any records of ownership or management, and therefore has nothing to disclose on the Internet, which means members of the public cannot easily look up who owns the Anonymous LLC. Only a few states permit true anonymous LLC's, including New Mexico, Wyoming and Delaware.
What are the benefits to an Anonymous LLC?
Because members of the public cannot lookup ownership information of the Anonymous LLC, such entities are a wonderful choice if it's important to keep ownership information private. This is very beneficial for owners of real estate, especially landlords who use property management companies to manage their properties. We also see this for service-based organizations whose privacy is important for competitive or safety reasons.
What is an Anonymous LLC not good for?
An Anonymous LLC will not prevent you or your company from paying taxes. It also won't prevent you or your company from being sued. At the end of the day, all companies, including Anonymous LLC's have a designated registered agent. If a company is being sued, a plaintiff's attorney will serve the registered agent, and the resgistered agent's job is to forward the complaint, summons or other document to the appropriate company representatives. If the company does not respond, it can potentially suffer a default judgement.
Is an Anonymous LLC foolproof from releasing ownership information?
No. There are many reasons why your anonymity could be pierced. First, if the company is sued, the plaintiff's attorney can identify ownership information through discovery. Second, the IRS will require that a "responsible party" is identified with the company, who must be an officer, director, member or shareholder of the company (although this information is not publicly released). Third, if the Anonymous LLC contracts with third-parties, the contracts will need to be signed by an "authorized representative." If you're not careful, you could inadvertently release ownership information to third-parties, who in turn could release that information publically. Fourth and finally, no matter where your Anonymous LLC is registered, if you're "conducting business" or "transacting business" in another state, you will be required to register that Anonymous LLC as a Foreign LLC in such states. Such registration for a Foreign LLC may require disclosure of ownership information.
How do you create an Anonymous LLC?
You create an anonymous LLC by forming a new LLC in the appropriate state (i.e. New Mexico, Wyoming or Delaware) with a third-party as the organizer and registered agent. New Mexico is a popular choice due to its low cost and maintenance.
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