Last Updated on 2 months by Komolafe Bamidele
Thanks to many tools and improvements in technology, starting a business is now a lot easier.
The downside is that anyone with an internet connection can now more easily access business information.
This is the main reason many business owners choose to have secret companies, like private LLCs.
We’ve listed the states that allow secret LLCs, the pros and cons of starting an anonymous LLC, and the steps you need to take to do it right.
What Is an Anonymous LLC?
An anonymous LLC, also known as a private or secret LLC, is exactly like a standard Limited Liability Company, except that its management and members are not disclosed to the public.
This makes it seem exciting and mysterious. Members’ and managers’ names, addresses, and ways to reach them stay private and don’t stay in the public record.
LLC owners can’t always stay anonymous in all states.
But in some cases, business owners in a state that doesn’t allow secret LLCs might be able to set one up in a state that does.
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How to Set Up an Anonymous LLC
Step 1. Give your Business a Name
The name of your business is significant to its growth and success. People can see your business name, so you can’t hide it.
Use Bizee Business Name Search help to find a name that is unique, easy to remember, and accessible.
You can also use the business name maker for suitable business names. Also, make sure you know your state’s rules for LLC names.
2. Find A Registered agent to help you.
A Registered Agent handles all official and legal correspondence for your business.
While they usually get mail from the government about tax returns and court summonses, they can also sign paperwork for you to protect your privacy.
A family member or friend can be a Registered Agent, but they must be available during regular work hours and be willing to have their name put on public records.
You can list yourself as a Registered Agent, but that removes your privacy.
3. Turn in the required paperwork
Finally, you need to have all the paperwork you need to file an LLC.
If you’re setting up a private LLC, this should mean that you don’t have to put your name on the papers.
However, the documents must include a mention of the organizer for LLC applications in Wyoming and New Mexico.
An organizer is just someone who is allowed to file paperwork for you; they are not always the same as the members or managers of an LLC.
A business name and a Registered Agent are all needed on the Delaware LLC entry form.
Pros of an Anonymous LLC
- There is no distinction between registering an anonymous LLC and a standard LLC with provided identity information in terms of legality.
- Because partners can join organizations at different stages, LLCs offer flexibility.
- The majority of states mandate that the identity of the Registered Agent, the person or people in charge of forming the LLC, and any members and management connected to the LLC, be disclosed.
- You may help stop potentially harmful people from accessing your information and using it maliciously or harassingly by registering as an anonymous LLC.
- An anonymous LLC owner can operate their company without having any connection to any unfavorable consequences that may arise from it.
- The advantages granted to a conventional LLC also apply to an anonymous LLC. Advantages include limited liability protection, flexibility, survival, and tax benefits.
Cons of an Anonymous LLC
- It could be challenging for you to gain the reputation and confidence of clients.
- The Internal Revenue Service (IRS) and your bank will still need to know that you are the owner.
- If your identity is revealed in a lawsuit, you could still be held legally responsible.
- Incorporation service providers, registered agents, and registered agent services can be called upon and have your information revealed in court.
- The procedure might be costly and time-consuming if your state does not permit anonymous LLCs, as you would have to go through it twice and comply with local, state, and federal regulations in each case. You would have to file documentation in both states to dissolve your company.
- Since prospective shareholders won’t be aware of the background of your LLC’s founding members, it might be challenging to transfer ownership shares.
Anonymous LLC States
Since only four states allow anonymous LLCs, your options are limited.
Delaware is the only state having a simplified Court of Chancery for business issues and a good option.
Delaware laws discourage fraudulent LLCs and safeguard against personal liability.
Delaware has a $300 franchise tax but no corporate income tax.
Firms are not obliged to name directors, authorities, corporate shareholders, managers, and LLC members.
You must still designate an organizer/incorporator and registered agent per the Articles. This means you must hire outsiders to fill these roles for total confidentiality.
If privacy and secrecy are important, consider New Mexico.
New Mexico is the only state of four that enables anonymous LLCs to function without giving the government their members’ identities.
Each state requires the LLC to disclose its owners. This means that if laws change, your information may be released without your consent.
Minewhipe cheap filing fees and no annual reports, fees, or taxes are further perks of New Mexico. In New Mexico, like Delaware, you need a third-party registered agent and organizer for total privacy.
New Mexico requires corporation income taxes. This is usually not a problem for pass-through businesses or those with one member as LLCs do not pay income tax.
Wyoming may be the greatest for tax reduction. State corporate income tax is waived for LLCs.
Wyoming charges up to $50 for your annual report, depending on your holdings.
Nevada is the greatest state for incorporation, along with Delaware and Wyoming, due to favourable laws and other factors.
In Nevada and Wyoming, the “nominee service,” which lets you change nominees with real owners, is legal.
If you want more comparison of State Best for an Anonymous LLC, and how each state differs then see this Anonymous LLC States Table.
Conclusion
Regular and private limited liability companies have long been among the most often used business forms.
You would want to keep your LLC anonymous for several reasons, including privacy protection, avoiding media attention, avoiding hackers, and so on.
Whatever your motivation for wanting to run an anonymous company, you get to keep your identity a secret and manage all of your business dealings without worrying about what other people will think.
This keeps all of your dealings confidential while enabling your firm to expand.