Learn How To Form An LLC Anonymously
If your objective is to create an LLC, while remaining completely anonymous, there are many options that you can choose from. Keeping your identity private is possible in most states, yet it is much more difficult in certain ones to accomplish this task. You may want to first ask yourself why you would like to maintain anonymity when creating your LLC.
You must consider the benefits, and the potential drawbacks, of pursuing this course of action. What if you happen to be in one of those states that do not allow any type of anonymous formation of the limited liability company? Let’s discuss all of this in great detail.
What Exactly Is An LLC?
A limited liability company is very similar to a general partnership, or a sole proprietorship, in the way that it functions. The same is true for those that are currently operating a corporation. The primary difference is that it can give you many additional benefits including asset protection. All of us are required to pay taxes, and because an LLC is regarded as a separate entity, they are also taxed. Any profits or losses that are made, however, are paid by the owners of the limited liability company.
The other option is that you may choose to have your LLC taxed in a similar way to a corporation. However, this is not very common. The similarities with corporations, the owners of this limited liability company are not personally accountable for the business and its financial status. This is why it is helpful to have one as your personal assets will not be accessible, or at risk, due to the protection, the LLC can provide. These legal protections for yourself, and your business, or why people decide to create them.
Why Would An Anonymous LLC Be Beneficial?
There are several reasons why you may want to create an LLC without divulging who you are public. First of all, if you have any history that could damage the name of your company, such as having experienced identity theft, you may want to protect your identity to prevent this from happening again. In fact, when you do form an anonymous LLC, your personal information will not be attached at all. Another reason to do this anonymously is for business reasons related to potential controversial transactions.
For example, if you have a business transaction with another company, and it goes awry, your name will not be associated with this business dealing. If you do set this up anonymously, you should know that this will not completely guarantee that your identity will not be revealed. An example of this would be the information that you will provide to the bank, or the IRS because you must tell them who you are.
When it comes time to pay taxes, the Internal Revenue Service must have your personal information, and in this way, your true identity will be known. Even if you were to preclude this information, a subpoena could be issued by the IRS to ask the bank to divulge who you are. In most cases, however, you can maintain your anonymity, but you must first learn how to form an anonymous LLC.
Is This Something That Most People Do?
In general, most people are not concerned with setting up an anonymous LLC. As you will see, this process can be quite involved and difficult to do without the right information. Doing so will often require retaining the services of an attorney which can be a very expensive process. On the other hand, there are businesses that specialize in not only the formation of limited liability companies but also are able to help you complete this process without much effort on your part. They have likely done this for many other businesses, and once you understand the process, you will see how easy it is to do in the states that allow it.
How Long Does It Take To Form Your Anonymous LLC?
Forming a limited liability company that is completely anonymous often takes longer than simply creating an LLC in your particular state. For example, you have to set up two completely different LLCs in order to make this process work. Initially, the anonymous limited liability companies are set up in the states that allow this.
You will then set up your limited liability company in the state where you reside. Since there are two separate limited liability companies, the process will take twice as long in most cases. However, if you are working with a business that does this regularly, they will likely have multiple people setting up each LLC in a very streamlined process.
Is It Really Advantageous To Do This?
Before showing you how to set up an LLC anonymously, you must consider whether or not this is the right decision for you. For the most part, this will protect your identity, but you must have a good reason to do this because of the extra work and expenses associated with going through this process. In some cases, it is mandatory that your identity not be revealed when doing certain business deals.
Perhaps you have a competitor that you would prefer not knowing that you are doing business in a particular area. You could be bidding on another company, one that they also want to, and you want to keep your identity protected. There are additional reasons which we will address, but before we begin, let’s look at the process of forming an anonymous LLC today.
How Do You Form An Anonymous LLC?
There are four states in total that allow you to anonymously register your LLC. It is not allowed in any of the others. This will include Wyoming, New Mexico, Delaware, and Nevada, which is why many people decide to form LLCs in these locations. It is important to hire an attorney to do this, or at the very least, retained the services of an LLC formation service that can do this for you.
That’s why working with these companies that specialize in forming limited liability companies is likely the most economical choice. Additionally, since you are using a separate company to do this for you, this will also make it easier to accomplish as these businesses fill out all of the paperwork.
What Information Will Be Needed To Form Your LLC Anonymously?
To understand how this is done, let’s begin with an example of forming an anonymous LLC in Wyoming. If you are going to form a single-member LLC in this state, you will need to hire one of these businesses to act as your registrar. They will place their address in the section where it states the address of the registered agent.
They will effectively be a shell company for you, thus hiding your true identity. You will also need to get an EIN number, even though you do not have employees, plus you will need to have a business bank account. Obtaining your employee identification number is free from the IRS, and once you have it, the bank account can then be opened. If you decide to set up your LLC in your home state, which may be required, you will then want to list your LLC in Wyoming as the officer or manager of your business. Finally, your bank will need to verify the ownership of the LLC in both your home state and in the state of Wyoming.
Other Ways Of Forming A Private LLC
if you would prefer to do this in a different way, you can hire an attorney to act as your point person when forming your LLC. This is often referred to as the Straw Man effect. On the operating agreement that must be filled out for the LLC, you can then list your attorney as the individual that is operating the LLC itself.
You could also create a holding company, again using your Wyoming LLC as the shell company to maintain your anonymity. However, all of these extra steps are simply unnecessary if you are using the strategies above which involve using an LLC formation business.
Misconceptions That Need To Be Addressed
When people first consider setting up an LLC, they may discover an abundance of false information about why people would actually do this. For example, you will find an abundance of information stating that the only reason you would create an anonymous LLC is to simply avoid paying taxes. This is not true because the LLC, which is its own separate entity, is taxed in the same way that any other LLC would be. You will have all of the protection, and tax advantages, associated with setting up your anonymous limited liability company. Other information may say that anonymous LLCs are completely untraceable.
This is also not true. From the standpoint of the average person trying to find information about you, this will likely be true because they will not know how to find you. However, any lawyer, or anyone that is familiar with how anonymous limited liability companies are set up, would be able to do so. Information may also state that anyone who sets up an anonymous LLC is simply a shady character. They are hiding their identity due to legal reasons. In reality, doing so is simply about preserving the privacy of the business owner who is choosing to remain anonymous.
However, it is possible that their reasoning for setting up an anonymous limited liability company would be due to problems they have had in the past. For example, someone may have harassed them before, or it could be property owners that are currently looking for a tenant for a particular reason. They may also set this up to avoid influence by competitors that may have a grudge against them. All of these reasons are not representative of the main purpose of setting up an anonymous LLC. It is simply done to protect the privacy of the business owner who wishes to maintain anonymity.
What Are The Advantages Of Anonymous LLCs?
The advantages are different in each of the four states that do permit anonymous LLCs. There are also disadvantages to each one. For example, when you form an anonymous LLC in Wyoming or Delaware, you can avoid paying corporate tax. However, the disadvantage in the states is that your personal information must still be disclosed to the states, and at some point in time, your personal information may be presented publicly.
Additionally, in both Delaware and Wyoming, and you will franchise fees and annual reports must also be filed. This will create a paper trail leading back to you. In New Mexico, you have the advantage of not submitting managerial or ownership information to the state, plus there are no fees or annual reporting requirements.
The disadvantage is that there is a corporate income tax that needs to be paid. These advantages and disadvantages must be considered if you are not using Wyoming or Nevada to form your anonymous LLC. Overall, this process can take a much longer time than simply creating your own limited liability company in your home state. However, based upon the advantages that it can provide, this may be the right decision for your current circumstances.
If your privacy is important to you, then you should certainly consider working with a company that can help you set up your anonymous LLC. Using the information provided, you can quickly see how easy it will be when working with the proper companies. If you have never done this before, you may want to consult with an attorney that can provide you with even more insight into this process.
In fact, they may have helped others set up anonymous limited liability companies in your particular state and can help walk you through the process. Keep in mind that, despite your best efforts, the laws in certain states will still create a paper trail that may lead back to you at some point in time. It’s just a good idea to maintain your anonymity, for whatever reason you have, by going through the process of setting up your anonymous LLC.