Fact checked for accuracy by Janet Berry-Johnson, CPA.
Thousands of start-up businesses across the United States have formed limited liability companies, otherwise known as “LLCs,” mainly because of the advantages that come with creating one.
One of the many questions we get often is: Can one form an LLC anonymously? The short answer is yes. However, you have to check if the state you are in allows businesses to form anonymous LLCs.
It is also essential to keep in mind that the US federal government has become more strict in tracking the ownership of businesses since 9/11. So, while it is possible to keep your ownership private, financial institutions such as banks require full disclosure.
This article will let you in on how to form an anonymous LLC, states that allow businesses to form anonymous LLCs, and more. Let’s get started.
Why Would I Need an Anonymous LLC?
There are many reasons why you may want to create an anonymous limited liability company.
To Prevent Malicious Activities
Forming an anonymous LLC is an excellent option if you are concerned about vices such as identity theft and stalking.
Anonymous LLCs are Quite Flexible
Most people prefer creating anonymous LLCs because of how flexible they are. For example, people can join the company at different stages.
Partners of Anonymous LLCs Enjoy Liability Protection
In anonymous LLCs, partners cannot be tied to or associated with any failures or losses of the company.
However, keep in mind that anonymous LLCs do not have benefits such as tax evasion. But they do have a couple of other perks compared to regular LLCs.
It is also important to note that anonymous LLCs are not wholly untraceable.
States That Allow Anonymous LLCs
Only four states in the United States allow anonymous limited liability companies: Delaware, Wyoming, New Mexico, and Nevada. Read on to learn more about the advantages of forming an anonymous LLC in these states.
Wyoming
Wyoming is one of the most tax-friendly states for anonymous LLCs. This is because it doesn’t charge any corporate tax for LLCs formed in the state. Instead, it only requires an annual fee of $50 depending on the assets you own as a company within the state.
Wyoming doesn’t impose an individual income tax and has a sales tax rate of approximately 4%, which is relatively low compared to most states.
So, if you are looking for a state with very low tax rates, Wyoming is the ideal option.
Delaware
Delaware is one of the best states to create both anonymous and regular limited liability companies. Like Wyoming, Delaware doesn’t charge any corporate tax, but it does charge an annual franchise tax of about $300.
New Mexico
New Mexico has some of the most robust privacy policies for anonymous LLCs.
This solution is the only state that doesn’t under any circumstances require the disclosure of the partners of anonymous LLCs during the registration process.
Although other states that allow anonymous LLCs require the disclosure of the owners of the businesses during the formation procedure. This solution means that if the laws are changed, the owners could potentially be at the risk of their information being publicly published without their consent.
New Mexico also doesn’t require LLCs to file corporate taxes, but this depends on setting up your LLC.
Nevada
Although Nevada has only recently emerged as one of the best states for anonymous and regular LLCs, its legislature has been working hard since the early 1990s to make it a business-friendly state.
Nevada doesn’t require LLCs with less than $4 million of gross receipts to file corporate, state, and franchise taxes. It also does not require LLCs with less than $4 million of gross receipts to file taxes on their profits and shares. What’s more, Nevada has worked hard to provide strong privacy protection for owners of anonymous LLCs.
However, Nevada recently enacted a gross receipts tax that requires companies doing business in Nevada to file a Nevada Commerce Tax return and pay a gross receipts tax to the state if the company’s Nevada gross receipts are $4 million or more.
Forming an Anonymous LLC in Other States
Perhaps you would like to form an anonymous LLC in another state that prohibits the formation of anonymous limited liability companies. While it is possible to do so, you will have to go the extra mile.
For starters, you will have to create an anonymous “holding company” in either of the states that allow the formation of anonymous LLCs. One can form a holding company with one’s other businesses and assets. Holding companies do not conduct any independent business activities; instead, they profit from their own companies.
Once you have formed an anonymous holding company in either Wyoming, New Mexico, Delaware, or Nevada, you can create an LLC in any other state and list the anonymous holding company as the owner.
How to Form an Anonymous LLC
Forming an anonymous LLC is a very straightforward process. One of the most important steps here is naming your company since it cannot include your or other partners’ names. Here are a few simple steps to forming an anonymous LLC in states that allow it.
Wyoming
Step One: Name your LLC.
All LLCs in Wyoming have to follow the naming requirements according to Section 17-29-108 of the Wyoming LLC Act. For starters, the Act requires businesses to indicate that they are LLCs. The name of your LLC should also not contain any words prohibited by Wyoming’s Secretary of State.
Once you have chosen the name of your LLC, the secretary of state will run it through their database to determine whether or not another LLC has already registered your proposed name.
Step two: Choose a registered agent.
A registered agent’s responsibility is to accept or direct any communications between you and the state of Wyoming. Unlike other states, Wyoming requires the agent’s office to be located in the state.
Step Three: File the LLC formation documents with the state.
Filing your formation documents with the state of Wyoming costs $100 and can be done online or via mail.
Step Four: Get an EIN for your LLC.
You can obtain your Employer Identification Number (EIN) from the IRS for free. This number will allow you to open a bank account.
Delaware
Step One: Name the LLC.
According to Delaware code 18-102, LLCs should have a unique name from all other LLCs in the state. The good thing is that Delaware allows businesses to reserve their proposed names before actually forming them.
Step Two: Choose a registered agent.
Unlike Wyoming, Delaware doesn’t require your agent’s office to be located within the state.
Step Three: File the LLC formation documents with the state.
Delaware requires LLCs to file the certificate of formation, which costs about $90. This certificate can be filled out online or manually through printing.
Step Four: Get an EIN for your LLC.
Nevada
Step One: Name your LLC.
In Nevada, businesses are prohibited from using the owner’s name as the proposed name of the LLC. The state also has a list of other words that are not allowed in LLCs’ names. Nevada also requires LLCs to indicate in their names that they are LLCs.
Step Two: Choose a registered agent.
Step Three: File the LLC formation documents.
You can file your LLC’s Articles of Organization either through email, online, fax, or mail. This process will cost you about $75.
Step Four: Get an EIN for your LLC.
New Mexico
Step One: Name your LLC.
New Mexico also requires LLCs to choose names that are unique from all other registered LLCs. Your proposed name should also include the term “Limited Liability Company” or “LLC.”
Step Two: Choose a registered agent.
New Mexico requires LLCs to choose agents within the state.
Step Three: File the LLC formation documents.
You can file your LLC’s articles of organization online through New Mexico’s secretary of state online portal.
Step Four: Get an EIN for your LLC.
Services That Can Help You Form an Anonymous LLC
There are several options when it comes to registering an anonymous LLC. But the truth is, hiring an attorney to do all the legal paperwork for you is pretty expensive. This is where LLC formation services come in.
LLC formation services help businesses to register their LLCs at a fraction of what a lawyer would charge.
There are tons of LLC formation services online, so choosing the ideal one for you can be pretty challenging. Here are a couple of things to keep in mind before settling on an LLC formation service.
Your Budget
Ensure that the LLC formation service cost is within your budget and check which services are included in their price packages.
The Services Provided
Check whether or not the LLC formation service offers the services you need. If your state requires registered agents to be located within the state, check whether the LLC formation service has offices or is registered in that state.
Professionality
Ensure that the LLC formation service has legal professionals to make sure that you comply with your state’s rules and regulations.
Money-Back Guarantee
You can also look for an LLC formation service that offers a 100% satisfaction money-back guarantee if you are unsatisfied with their services.
The Last Word
Forming an anonymous LLC can be daunting, especially if you don’t know where to start. Hopefully, we have shed light on how to get started. The good thing is that you don’t have to do it by yourself, as there are many LLC formation services that you can turn to. Best of luck in your new business ventures.
Filed under: Advice Columns
