Protecting one’s privacy and assets is a top priority for many business owners, especially in today’s digital age where personal information is easily accessible. One way to safeguard against becoming an easy target for predatory creditors and attorneys is by forming an anonymous LLC. By hiding ownership information from public databases and online searches, anonymous LLCs offer an added layer of protection for business owners who want to remain anonymous.
Luckily, there are several states that permit the formation of anonymous limited liability companies (LLCs), enabling business owners to shield their identity while limiting personal liability for business debts. In this article, we’ll explore the concept of optimizing business privacy with anonymous LLCs and examine the top four states where they are permitted.
What Is an Anonymous LLC?
An anonymous LLC is a type of limited liability company that keeps the identity of its owners private. The public can’t access the names and addresses of the members, who are also the owners. Many individuals and businesses decide to form anonymous LLCs to protect their privacy and safeguard assets.
4 States That Allow Anonymous LLCs
Not all states permit anonymous LLCs, but there are a handful that do. Here is the list of the states that allow the creation of anonymous LLCs:
Strong state privacy laws make Delaware a popular state for forming anonymous LLCs. In Delaware, anonymous LLCs are known as “series LLCs” and are formed by filing a Certificate of Formation with the Secretary of State. The Certificate of Formation does not require the names or addresses of the LLC’s members to be listed.
Nevada is another state that allows anonymous LLCs. In Nevada, anonymous LLCs are formed by filing Articles of Organization with the Secretary of State. Although the Articles of Organization are public record, they don’t require the names or addresses of the LLC’s members to be listed. In some cases, people opt to use a virtual address instead.
3. New Mexico
New Mexico has been a favored state for setting up LLCs. Apart from being reasonably priced, a New Mexico LLC is perhaps the only option where you can establish a truly anonymous LLC, shielding both your assets and identity. New Mexico is the only state where business owners can register their businesses without disclosing their names on the forms they are submitting.
To establish an anonymous LLC in New Mexico, the owner is required to file the Articles of Organization of the business with the state.
Wyoming is another one of only four states that allow anonymous LLCs. When it comes to forming an anonymous LLC, choosing the right state can make a significant difference in terms of taxes and fees.
Wyoming, for example, is considered one of the most tax-friendly states for anonymous LLCs. In Wyoming, LLCs are not subject to corporate income tax, making it an attractive option for business owners looking to minimize their tax burden. While the state’s filing fee is higher than that of New Mexico’s, anonymous LLCs formed in Wyoming are required to file an Annual Report, which can cost as little as $50 depending on the company’s assets within the state.
LLCs are allowed in all 50 states, but the rules and regulations vary by state. Every state requires you to name the Registered Agent and the Organizer in your LLC application and most need you to identify the managers or members of the LLC. However, these four states don’t require you to reveal this information, which allows the formation of “anonymous LLCs”. You must follow the requirements of the specific state you are forming it in.
Best State to Form an Anonymous LLC
If you’re looking to form an anonymous LLC, New Mexico is probably your best bet. It’s the only state that lets you keep your name off the public record, which means you get a ton of privacy and protection for your assets. Plus, the filing fees in New Mexico are very reasonable, making it a popular choice. Remember the rules for anonymous LLCs can change, so make sure you do your research before you start one in any state.
How to Form an Anonymous LLC?
To form an anonymous LLC, you need to follow certain procedures, a few of which are mentioned below:
1. Name Your Company
To begin forming an anonymous LLC, the first thing you need to do is decide on a name for your company. It may sound simple, but there are actually a few things to consider. In addition to choosing a name that is catchy and memorable, you’ll also want to make sure that the name you choose is not already in use in your state and does not infringe on any existing trademarks or business names. You’ll want to check to see if the matching domain name is free too.
When choosing a name, it’s best to avoid selecting a name that reveals too much information about your business or personal identity because the whole point of an anonymous LLC is to protect your privacy.
2. Get a Registered Agent
Once you’ve settled on a name, you’ll need to choose a registered agent. This is a person or company that will act as a go-between your LLC and the state. Your registered agent will receive official documents and legal notices on behalf of your LLC, so it’s important to choose someone who is reliable and trustworthy. Some anonymous LLCs choose to use a registered agent service, while others prefer to designate a trusted friend or family member.
3. File the Necessary Paperwork
The final step in forming an anonymous LLC is to file the necessary paperwork with the state. This will typically include Articles of Organization, which provide basic information about your company, as well as any required state-specific forms. You’ll also need to pay any required fees, which can vary depending on the state you’re forming your LLC in. Once your paperwork has been filed and your fees have been paid, you’ll officially have an anonymous LLC.
Benefits of Forming an Anonymous LLC
Here are a few reasons why forming an anonymous LLC might be just the thing you need to keep your business private and protected:
Get Complete Privacy
Creating a completely private LLC keeps all your sensitive information safe and sound. This means all personal and business-related details, like assets and property investments, remain confidential and hidden from the public.
Avoid Legal Hassles
By having a private business, you can protect your identity and avoid all sorts of lawsuits. This way, your name, and any business-related information remain out of the official ownership records of an LLC.
Stay Protected from Harassment
Since details of anonymous LLC members are not available publicly, this greatly reduces the chances of any harassment risk to both the members and the business. This ensures that all business affairs stay out of the public eye.
Secure Your Assets
A private business provides a corporate veil of protection to keep all your business assets safeguarded from any personal creditors, like family and friends.
Get All the Regular LLC Benefits
Creating an anonymous LLC lets you enjoy all the benefits of a regular LLC, such as tax advantages, limited liability protection, and the flexibility to operate your business however you want.
Limitations of Anonymous LLCs
However, there are a few limitations to keep in mind when it comes to anonymous LLCs, including:
Limited State Availability
Not all states allow anonymous LLCs, so you’ll need to do your research and find out which ones do.
More Paperwork and Costs
Forming an anonymous LLC requires extra paperwork and fees compared to a regular LLC, which can be a bit of a hassle.
Challenges with Funding and Banking
Since anonymous LLCs aren’t required to disclose their members or managers, it can be challenging to get funding and open a bank account. Some banks might even refuse to do business with anonymous LLCs.
Potential Challenges with Contracts and Partnerships
Anonymous LLCs can face challenges in getting contracts and forming partnerships since partners or vendors might not want to do business with a company that doesn’t disclose its owners or members.
Possible Difficulty with Reselling the Business
Selling an anonymous LLC can be challenging since buyers might be hesitant to purchase a business that doesn’t disclose its owners or members.
Doola for Your Anonymous LLC’s Bookkeeping Needs
If you’re a business owner looking to keep your personal and business information private, forming an LLC can be a great option for you. But it’s important to keep in mind that not all states permit the formation of anonymous LLCs. Only four states allow you to keep your information hidden from public records. If you’re interested in forming an anonymous LLC or need help with the accounting and bookkeeping aspects of your LLC, doola can help.
What type of business needs an anonymous LLC?
Any business owner who desires to keep their personal information and business dealings private could benefit from forming an anonymous LLC. This could include individuals in industries such as real estate, finance, and entertainment.
How much does it cost to form an anonymous LLC?
The cost of forming an anonymous LLC varies from state to state, with filing fees typically ranging from $50 to $500. Some states may also require additional fees for registered agents or annual reports. It’s important to research the specific requirements and costs for the state in which you plan to form your anonymous LLC.
Is it better to form an anonymous LLC or a regular LLC?
The decision to form an anonymous LLC or a regular LLC depends on the specific needs and goals of the business owner. While an anonymous LLC provides added privacy and protection, it also comes with certain limitations and additional costs. Weigh the pros and cons and consult a legal or financial professional to determine which type of LLC is best for your business.