You must have heard people asking how to form an LLC in your state, but rarely find anyone asking to create an LLC anonymously in 50 states. Hey, what does that supposed to mean?
Here, we’ll discover what is an anonymous LLC, how is it different from a regular LLC, how to form an LLC anonymously, misconceptions about the private LLC, and much more. So let’s get started.
Tip of the Day: If you’re looking for privacy, Northwest Registered Agent is the best LLC service provider to help your identity be private and secure. With their filing services, you can set up a private LLC while keeping your identity anonymous.
What is Anonymous LLC in Your State: How is it Different
When you form an LLC while keeping your identity private, it can be called an anonymous LLC formation. An anonymous Limited Liability Company (LLC) is just like a regular LLC. The only difference is that the identity of members or managers of LLC is not disclosed in anonymous LLC.
Due to the anonymity of the owners, such companies are also called private LLCs or confidential LLCs. Otherwise, there is no legal difference between these two.
Is it not exciting to build an empire without being continuously bothered by con artists, salespeople, competitors, etc.? If it intrigues you, keep reading until the end and learn how forming an LLCanonymously helps hide a company’s ownership. You can also hire top-rated LLC formation services online for setting up an anonymous LLC for you seamlessly.
Disclaimer to Forming a Privacy LLC in Your State
The new legislature imposes on businesses to let the U.S. government and banks know that who-owns-what. Especially, business entities are required to reveal their ownership and bank accounts to the government.
Many business owners, such as real estate investors, drop shippers, wholesalers, etc., prefer not to publicly reveal their identity and register their business as an anonymous LLC. This way, business owners get the chance to escape from unnecessary legal liability while having their identities hidden.
However, remember that a privacy LLC does not hide your ownership information from the IRS or your bank. Therefore, you can’t prevent yourself from paying taxes or exempt yourself from other obligations by anonymously setting up an LLC.
Important Notice: It’s important to never do anything illegal, never lie with the government or bank, and never do anything that can be considered suspicious. If you do, you may face legal consequences besides losing your LLC.
LLC Information is a Public Record
To create an LLC in any state, you have to file an Article of Organization or certificate of formation with the Secretary of State or a similar government institute.
In addition, most states require you to provide the owners ‘/members’ names and the details of a registered agent regardless you are setting up a private LLC or a regular one.
In some states, you also need to list the LLC’s manager on the LLC formation documents. During the filing process of New York LLC, Arizona LLC, and Nebraska LLC, you have to publish the Articles of Organization in a newspaper.
Pro Tip: In LLC publications you are required to publish a copy of the Articles of Organization or a notice related to the formation of the LLC.
Since the Article of Organization contains basic information such as owners’ names, addresses, etc., the best LLC practice for anonymous LLCs is to avoid publishing an LLC Articles of Organization. Rather go for a publication notice that only contains information related to the registered agent.
Moreover, when you file your LLCs registration documents with the state, these papers become part of the public record. Anyone can access this basic information from the database on the secretary of state’s website.
If you do not want to reveal this information to the public and prefer to keep this information private, an anonymous LLC is the best solution.
Why Form an Anonymous LLC?
There could be many reasons for someone to form an LLC without revealing their identity. But the most notable reason is one’s security. It might be a high priority for you to keep your identity a secret:
- a) You’ve been a victim of an identity theft
- b) You’ve been the target of stalkers or fraudsters
Here, the LLC members and managers are not publicly listed in state records. Keeping the identity of the owners unknown offers a variety of benefits to both the business and the owners. Let’s have a look at some of the most valuable advantages that we have reviewed for you:
I. Maintaining Confidentiality
Every year, there are more than 15 million civil cases filed in the US. The majority of these cases are filed by people seeking a big payday by filing frivolous lawsuits against investors, entrepreneurs, and business owners. Forming an LLC anonymously helps investors and business owners keep their properties and financial status out of the public eye.
II. Privacy Protection
An anonymous or private LLC offers you privacy protection by keeping your name and address off public access. One of the ways to keep your address private is to hire high-profile Registered Agent Services; however, it does not help hide ownership information from the state.
III. Asset Protection by Offering Limited Liability Shield
Registering your business as a private LLC can help you shield it from lawsuits, debts, and other potential liabilities.
IV. Preventing Harassment
Forming an LLC anonymously keeps your identity and registered agent information unknown, you can avoid potential harassment from competitors, professional plaintiffs, salespeople, or anyone else interested in your business or with other negative motives.
States that Allow an Anonymous LLC Formation?
Not all states allow forming an LLC anonymously. However, there are some states that allow to create an anonymous LLC. And the easiest and most straightforward way to form an anonymous LLC while keeping your identity private is to select the relevant state that allows you to register your LLC anonymously. These States include:
- New Mexico
You can also create an LLC anonymously in other states using the 6 best LLC services online such as ZenBusiness or by doing it yourself (DIY method). In the DIY method, you need to follow a few extra steps, including;
Submit Article of Organization to Form an LLC in Delaware & Other States
The 1st step of creating an anonymous LLC is to form an LLC in the following state:
Pro Tip: While forming an LLC, it is recommended to hire professional registered agent services so that your personal address would not go public. Many entrepreneurs prefer NorthWest Registered Agent Services due to their supreme data policy. They keep your personal information private and do not sell your data to third parties.
Acquire an EIN and Open a Business Bank Account for Your Wyoming LLC, Delaware LLC, Nevada LLC, New Mexico LLC
You need to get an Employer Identification Number (EIN) and open a bank account in one of the 4 states mentioned above.
Form the LLC in Your Home State
This will allow you to keep your information off the public record in your home state. By doing this you would have the legitimacy that proves you’re the actual owner of both entities.
Try Top Rated Anonymous LLC Services
Other Theories and Methods of Creating a Private LLC
After consulting with multiple lawyers and discussing with entrepreneurs who have created private LLCs in different states across the country, the following are some more methods or theories of forming an anonymous LLC.
Creating a Holding Company
Start a “holding company” privately in any of the states mentioned above. A holding company is a type of business entity that usually doesn’t conduct independent business operations.
They hold assets and own other businesses and generate revenue from the profit from the companies and investments they own.
After registering your anonymous holding company in any of the four states mentioned above, you can start an LLC anonymously in any state in the US by listing the holding company as the owner.
As there are no records that tie you to the company, you can keep your ownership information private.
‘Straw Man’: The point person for your LLC
Nominating a person as the Manager of your LLC in the state documents, and stating in your LLC operating agreement that you are the person who actually runs the LLC may help you operate as a private LLC.
This approach is not recommended since technically this approach is a kind of lying to the state.
Misconceptions Related to an Anonymous LLC
From the term anonymous, many people perceive a lot that actually has nothing to do with this business entity. Here are some generalized misconceptions attached to anonymous LLC;
Anonymous LLC helps tax avoidance:
Since the owners’ information is not hidden from the Internal Revenue Service (IRS), you can not expect yourself exempted from paying due tax after registering your business as an anonymous LLC.
Anonymous LLCs are totally untraceable
Indeed, the general public can not find out that you own a particular company. However, if improperly used, most LLCs are subject to piercing the corporate veil.
Anonymous LLCs are shady
Many people perceive owners do not want to reveal their identity as their business is shady. This is totally wrong. Most business people choose anonymity for legitimate reasons, including landowners and property owners trying to avoid tenants from bypassing landlords, victims of previous abuse or harassment, avoiding competitors, and more.
An anonymous LLC safeguards your privacy by keeping your business ownership out of the public record. At the same time, you can enjoy the perks of personal asset protection against lawsuits and other business liabilities. If you intend to protect your privacy by keeping your ownership information out of the public record while shielding your investments from creditors, lawsuits, and harassers, an anonymous LLC model is for you.
FAQs on Anonymous LLC
Can an LLC be private?
If the owners’ address and other information do not appear in the public record of a state and the identities of the owners are kept private, such LLCs are called private LLCs or anonymous LLCs.
An anonymous LLC is just like a regular LLC. The only difference is that the identity of members or managers of LLC is not disclosed in anonymous LLC.
How do I make my LLC private?
To make your LLC private, technically, you need to follow the steps given below:
- Submit Article of Organization to Form an LLC in (choose of the state which is more suitable for you)
- Get an EIN and open a bank account in Delaware, Nevada, New Mexico, or Wyoming
- Form an LLC in your home country and nominate the LLC (that you have created in Delaware, Nevada, New Mexico, or Wyoming) as the manager or officer of your LLC in the home country.
A holding company or straw man option can also be considered to create a private LLC.
What states allow private LLCs?
An Anonymous LLC State or confidential LLC state, or private LLC state does not require an LLC to provide the identity of the owners, members, or managers. The most popular states that allow you to create an LLC anonymously are Delaware, Nevada, New Mexico, and Wyoming.
What is a privately held LLC?
A private company or privately held company is a company that does not offer or trade its company shares on the stock market exchanges to the general public. The company’s shares or stocks are owned, offered, traded, or exchanged over the counter or privately.
Most LLCs are privately held companies. If an LLC wants to sell shares publicly it must elect itself as an S-Corporation LLC that allows profits to pass through the company to the shareholders.
Can I form an anonymous LLC in New York, Arizona, or Nebraska (the states with publication requirements)?
The LLC publication requirement includes publishing articles of organization of LLC formation notice in a public newspaper. Since the Article of Organization contains basic information such as owners’ names, addresses, etc., do not publish articles of organization in the newspaper.
The best LLC practice for anonymous LLCs is to publish the LLC formation notice that only contains information related to the registered agent.
What are the benefits of an anonymous LLC?
The benefits of registering an anonymous LLC are many. For starters, this protects you from potential stalkers and criminals who might want access to your information. An interesting note about registering a private LLC is that it gives you a peace-of-mind knowing that nobody outside can ever find out anything personal regarding yourselves.
What are the Major Cons of Forming an LLC Anonymously?
There are also some potential drawbacks of starting an LLC Anonymously. One key disadvantage is that it can be more difficult to secure funding from investors. Since investors will have less information about the LLC and its owners, they may be hesitant to provide funding.
In addition, Forming an Anonymous LLC can also make it more difficult to build trust with customers and partners. When businesses are transparent about their ownership and management structure, it can help to build trust and credibility. As a result, private LLCs may have a more difficult time establishing relationships with key stakeholders.
Aisha Noreen is an owner of a small business with more than 9 years of experience in the marketing industry. With the wisdom of an old soul, she always seeks innovation and mind-blowing ROI techniques. Her unique approach helped many small businesses thrive and she can surprise you in many ways as well. Believe it or not, her energy, passion, and creativity are contagious enough to transform your business and take it to another level.