By The LLC Attorney Team
Feb 22, 2024An anonymous LLC is one where the owners and managers are not listed publicly. This means curious neighbors, distant family, strangers, and creditors cannot go on the internet to see what you own or where you live. For Corporations, the shareholders, officers, and board of directors would not be publicly available. In either case, the purpose is to keep your personal information from becoming public.
Privately formed companies are sometimes viewed negatively, but frankly that stems from a misunderstanding of their purpose. The constitution affords a right to privacy. You are not required to scream your bank account information from the rooftops. Displaying your wealth for the world to see is not a benefit.
This article will cover the best states to form an anonymous LLC and the cheapest states available for privacy. Regardless of which state you’re in, we can help you establish a company without divulging personal information.
To be clear, you receive the general benefits of asset protection, tax minimization, and appearing more professional than a Sole Proprietorship. Additionally, you avoid frivolous lawsuits, harassment, and a loss of privacy during the digital age. Not putting your information online helps your personal life stay personal, rather than becoming public.
A common question is privacy from who? Don’t you want people to find your company? Sometimes yes and sometimes no. At the minimum, you likely don’t want your home address listed online. This happens if you act as your own registered agent.
Additional privacy depends on your industry. If you are the face of the business, then people will know you own it. However, there are online companies, real estate investors, and others who don’t want their name, phone numbers, and email addresses to appear in online searches for the world to see.
It’s also detrimental to flaunt your wealth. Family, neighbors, creditors, and nosy neighbors can and will find out more about you than you want. Do you share your bank account details on Facebook? We hope not.
While anonymous LLCs offer privacy benefits, they also come with limitations to consider. To begin with, not all states allow the establishment of anonymous LLCs, necessitating careful selection of the jurisdiction. Additionally, establishing an anonymous LLC entails more paperwork and higher fees compared to traditional LLCs, adding administrative burdens.
Securing funding and banking services can be challenging due to the lack of transparency regarding members or managers, with some financial institutions reluctant to engage with anonymous entities. Moreover, anonymous LLCs may encounter difficulties in obtaining contracts and forming partnerships, as potential collaborators may be hesitant to engage with entities that withhold ownership information. Finally, reselling an anonymous LLC can be problematic, as buyers may be wary of acquiring a business without clarity on its ownership structure.
Anonymous LLCs can offer significant benefits to non-residents, particularly those living under dictatorial regimes or political oppression. By forming an anonymous LLC, individuals can shield their identities from public disclosure, protecting themselves from potential retaliation or persecution by oppressive governments. This anonymity can provide a level of freedom and security for activists and dissidents who may face threats or harassment for their beliefs or advocacy work.
Additionally, anonymous LLCs can facilitate financial transactions and business activities without exposing individuals to undue scrutiny or risk, allowing non-residents to engage in commerce and investments with greater privacy and protection.
The answer depends on the state, but at minimum, you will need a registered agent willing to use their information for the Secretary of State filing. It’s important to note that while you are not publicly identified, you receive documents certifying your ownership. Additionally, the EIN and bank account information will be in your name. Anonymity in no way affects your ownership of the company.
Some states don’t require ownership information. In these states, such as Wyoming and Delaware, only the registered agent is listed on the Articles of Organization. The agent will provide their street address, email, and phone number as the company’s point of contact. This will be the only information available if your company name is searched.
Other states require a manager to sign the documents. In such cases, a nominee manager, also called a “manager for a day” can submit the documents. This is generally done by the registered agent who then immediately resigns and turns control of the company over to the true owners. Many law firms will also perform this function as well.
A few states require the owners to be listed on the state filing. For example, Arizona mandates the listing of owners. However, in such instances, it's permissible to designate another LLC as the owner Yes, you can list an anonymous LLC as the owner. This method means you can form an anonymous LLC in any state. We are happy to help provide this service if you desire it.
The state filing fee does not differ, but the service provider you choose may have an additional fee for listing their address as the place of business or using their employee’s name as the Organizer. These costs can be viewed as adding a virtual office or nominee signature, but each provider differs.
Nominee services refer to a legal arrangement where individuals or entities, known as nominees, are appointed to hold positions or ownership rights on behalf of others. In the context of an anonymous LLC, nominee services involve appointing individuals or companies to act as nominees, representing the true owners or managers of the LLC.
These nominees may appear as the official owners or managers in public records, providing an additional layer of privacy and anonymity for the true owners. Nominee services are commonly used in jurisdictions where company ownership information is publicly accessible, allowing individuals to maintain confidentiality while conducting business.
Fortunately, it’s easy to form an anonymous LLC. Not every state requires ownership information to be listed, and for those that do a holding company or double LLC setup functions to provide privacy. We can do this for you.
That said, there are a few states which are most popular for anonymity:
Wyoming: With relatively low fees, $100 to form a company and $60 to keep it open, along with online filings which are immediately accepted. The affordability, speed, and premier asset protection make the state a popular destination.
Delaware: While the most expensive option, with a $300 renewal fee, the state offers access to a Chancery Court and is favored by large investors who also form Corporations in the state. The difficulty we find is most small businesses can’t justify the higher fees, e.g. there is also a $50 fee for a same-day filing (not even instant as in WY).
New Mexico: There is a special place for NM given the first-year fee is $50 and there are no state filings afterward. This is great for hobbyists or online blogs who aren’t worried about aggressive asset protection as in WY, but still desire to be private.
Nevada: The state’s popularity gave it an excuse to raise fees to the point they’re $425 the first year and $200 a year to maintain. This is before any registered agent fees, mind you. We used to advise clients of this option, but now generally discourage it.
Other States: The above are not the only options, just the most popular. There are a variety of entirely legal ways to form an anonymous LLC in any state. Just ask us how, or choose the privacy option on our intake form.
What’s important is you have a service provider which values your privacy and is willing to assist you.
Several entities have access to information about your business regarding company ownership. Firstly, the Financial Crimes Enforcement Network (FinCEN) keeps a close eye on corporate ownership, particularly to combat money laundering and financial crimes. Secondly, banks maintain records of account holders, including details about the companies they own or operate.
The Internal Revenue Service (IRS) is another key player, tasked with overseeing tax compliance and requiring companies to disclose ownership information for tax purposes. Lastly, registered agents play an essential role, especially for anonymous LLCs, as they are the designated point of contact for legal correspondence and filings, thereby having access to pertinent details about company ownership.
You can, but unfortunately the previous information will always be accessible online. You could argue there was an ownership change, or hope someone doesn’t dig too deeply, but ultimately every state filing will be publicly accessible.
The same problem exists for moving a home into a land trust. If your information was on the title initially, then you could say it’s now owned by a land trust. The most basic of searches, though, will show you were the previous owner.
This isn’t to say there’s no hope. We advise keeping your existing structures as they are, but forming new ventures in a different way which protects them from public scrutiny.
People’s desire for privacy comes in many forms. A common theme we’ve seen is people who simply don’t want to broadcast their lives. Other clients are political activists from across the world and don’t want to be targeted for their beliefs. Given privacy is a right, and not a privilege, we don’t judge. We honestly believe the better question is who doesn’t want a bit of privacy in the digital age?
Using multiple jurisdictions refers to the strategy of incorporating or establishing legal entities in different geographical locations or jurisdictions. This approach is often employed by individuals or businesses seeking to take advantage of varying laws, regulations, and tax regimes across different jurisdictions. In the scenario of anonymous LLCs, utilizing multiple jurisdictions could involve forming separate LLCs in different states or even offshore jurisdictions to achieve specific goals such as asset protection, privacy, or tax optimization.
By diversifying across multiple jurisdictions, individuals or businesses can benefit from the legal and financial advantages offered by each jurisdiction while mitigating potential risks associated with operating in a single location.
Beyond Wyoming, Delaware, New Mexico, etc. there are many jurisdictions that allow privately formed companies. These include, but are not limited to, Cook Islands, St. Kitts & Nevis, Seychelles, Isle of Man and more.
Shell corporations refer to entities that are established with minimal assets or operations and are often used for specific purposes such as holding assets or conducting financial transactions. These corporations typically do not have significant business activities or employees and are sometimes perceived as being inactive or dormant. In the context of an anonymous LLC, a shell corporation may be used to maintain privacy and anonymity for the true owners or beneficiaries of the company.
By using a shell corporation, individuals can shield their identities from public disclosure while still conducting business or holding assets through the entity. However, it's important to note that while shell corporations can offer privacy benefits, they have also been associated with illicit activities such as money laundering and tax evasion. Therefore, it's essential to ensure that the use of a shell corporation complies with all relevant laws and regulations.
Forming an anonymous LLC offers numerous benefits, including enhanced privacy and protection. Understanding the process and choosing the right state is key to safeguarding your personal information. With the right guidance, you can establish a private company that meets your needs and ensures confidentiality in the digital age.
Please complete our contact form if you have any inquiries regarding the formation of your LLC. Additionally, attorney consultations are readily accessible for those requiring further clarification.