Limited Liability Companies (LLCs) are functional business structures for small to medium enterprises. However, when forming a company, it's usually a requirement that the business owners remain a matter of public record. The Houston Chronicle notes that, in some jurisdictions, the owners of LLCs could be sued independently of their businesses. While this might a scary prospect, there is a way to keep yourself safe as a business owner. That method is by incorporating your business as an anonymous LLC.
What Are Anonymous LLCs?
Anonymous LLCs are similar to standard limited liability companies, except that they don't publicly disclose the owners' names. As such, the state, and anyone searching public records, can't immediately figure out who owns a particular company. In some jurisdictions, the anonymous LLC is required to state the managers involved in the business. However, as a way around that, a nominee manager might be used. This individual may or may not be a manager, but their name is used as a placeholder to stand in for the registered managers of the business. Unfortunately, a registered agent and organizer are still visible on the filing for an anonymous LLC. Luckily, in most locations where anonymous LLCs can be incorporated, a business owner can get an organizer and registered agent through a third-party service.
How To Incorporate an Anonymous LLC
Incorporating an anonymous LLC starts with finding a state that accepts this type of filing. Anonymous LLCs are unique because only a few states allow for forming these types of business structures. States such as Wyoming, Delaware, New Mexico, or Nevada usually come up when looking for a location to register an anonymous LLC. Sometimes, however, you may not have the option to incorporate within these states but already have an anonymous LLC registered there. In such a case, states may allow you to list your anonymous LLC as the owner of your locally registered business. Finally, having a third-party service that lists itself as the owner and registered agent is also a viable solution to this problem.
Once you've located the state you're registering the business in, it's a small matter of filing the paperwork like a regular LLC. If you have a third-party service, they might do the filing for an additional, nominal fee. Once the articles of incorporation go through, you can start operating your anonymous LLC just like any other LLC with one distinct difference - your information and the business's ownership are entirely private.
Why Would You Want to Register an Anonymous LLC?
The Hustle mentions that anonymous shell companies might become illegal in a recent article, forcing transparency. The report looks down on anonymous companies for the same reason many business people don't consider them. Registering an anonymous LLC doesn't mean you intend to do something illegal. On the contrary, in this age of internet data leaks and privacy violations, it may be the one time you can ensure that someone can't simply push aside your right to privacy. When registering a business, all the data you submit becomes a matter of public record. That includes the names and addresses of the directors and managers. With so much uncertainty globally, having one's personal data online is a terrible price to pay for owning a company.
The Benefits of an Anonymous LLC
LLCs bring their own series of benefits, but anonymous LLCs give their owners the best of all worlds. Among the advantages that anonymous LLCs offer are:
- Privacy: No need to worry about your personal data getting online and landing up in someone's inbox as a potential target. With the focus on personal data, an anonymous LLC ensures that this data remains secure since the publicly held data doesn't show a link that could be traced back to your own name and address in the real world. This level of abstraction is crucial for the LLC to keep the owner a private entity.
- Confidentiality: A business owner remains secret, and there's no chance of their information entering the public domain. If a business uses a third-party agent and organizer, the disconnect is even further, allowing for even more distance between the filing and the owner themselves.
- Harassment protection: if your business is in a politically sensitive industry, or you simply are concerned with others being jealous of your success, anonymous LLCs offer a great way to avoid harassment.
- Isolation from prejudice: A business that operates within a specific region or industry might carry with it some stigma. Suppose an owner wishes to isolate themselves from any stigma associated with their business operations or their industry. In that case, an anonymous LLC is one of the best ways to do so while still getting the protection of an LLC.
Should You Choose an Anonymous LLC?
Anonymous LLCs are best suited to specific industries precisely because of the sensitivity of the data contained therein. Defense contractors are among the most common business owners to look at incorporating anonymous LLCs. Their work regularly involves state secrets, and their privacy ensures that no one can tell who they or their family are since their business can be politically sensitive. Other industries that benefit from this sort of arrangement include consultants, technicians, and even engineers. These professionals can have a significant impact on the infrastructure of a country. As a result, their data is the ideal target for external governments that want insight into how businesses within the country operate.
Call a Lawyer to Start Setting Up
Lawyers are the best professionals to contact to start setting up your anonymous LLCs. They already know the challenges facing business owners in keeping their data and personal information safe. As a result, they're likely to go the extra mile in helping their clients arrange for their anonymous LLC registration. In some cases, you can even get a lawyer to act as the registered agent or the nominee manager for the filing. Some lawyers even offer registered agent services, allowing a business to register in a state that it's not technically even operating in. Talking to your lawyer will help you decide if registering an anonymous LLC is what you should do and which anonymous LLC states you should be looking at.