How to Hide Ownership of a Company?
Wondering how to hide the ownership of a company? You’ll be happy to know hiding ownership is not always done for illegal purposes – so it’s something you can do. Learn more about anonymous holding companies.5 min read updated on February 27, 2023
Looking for a way to hide your identity as a limited liability company (LLC) owner? An anonymous LLC acts as a holding company, which is a parent business entity. There are many reasons a company may decide to do this – and they’re not always illegal. For example, you may decide to do this to protect the identity of the business owners.
There are many reasons a business owner may want to hide business ownership.
Hiding ownership is accomplished by creating a separate company and placing the assets into the new company. The new company can be used to open bank accounts or to make purchases. In some countries, it is almost impossible to link a company back to its owner.
Anonymous Limited Liability Companies
An anonymous limited liability company (LLC) is one that hides all ownership information. This can be done by creating an anonymous LLC in a state that allows it and then using a different person to register it. The secrecy jurisdiction keeps company information anonymous.
Secrecy jurisdictions are common in the following locations:
- United States
- British Virgin Islands
How Anonymous Companies Work
The majority of public companies publicly share officer information on company websites or on official documents. Companies share this information to encourage trust from their clients and customers. Members of an anonymous company, however, do not want to share this information. They do not have websites or any other public documents.
Even though the company may be required to fill out documents when creating the business, these documents often do not include accurate or full information about the officers. The forms can be filled in by individuals that have nothing to do with the business. Additionally, they can list other anonymous companies, making it even more difficult to track down the owners.
An operating agreement is a governing document that includes all the names of the members of an LLC. While the members and managers of an LLC can remain anonymous to the public, officials and directors of corporations must be identified when paying franchise tax. A managed LLC is not required by law to make the identity of its owners public.
Understanding Business Owner Privacy
While many business owners attempt to open an anonymous business for tax evasion purposes, others just want to protect their identity. Privacy is a valuable thing to some, and fortunately, there are ways to protect identity.
There are states, including Nevada and Wyoming, that support anonymous businesses. These states often require that one registered agent be public, but the remaining officers and directors can be anonymous. Additionally, the company is required to submit an Annual List of Officers and Directors. The company must provide the full name of at least a few of the officers.
This information is included in the searchable database, which can be accessed by anyone. This law, however, varies from state to state, and some states do require that all members be listed on public documents.
How to Use an Anonymous Trust to Hide Company Ownership
One of the most common reasons for hiding company ownership is to prevent legal liabilities. Using an anonymous trust can prevent a company owner from being sued.
You can set up an anonymous trust with the following steps:
- Form an anonymous trust. A series LLC can reduce legal liability but does not stop the lawsuit from being filed. An anonymous LLC, however, can protect the company and its owner from legal liabilities. It can also prevent the lawsuit from ever happening.
- List the anonymous trust as a member of the LLC. You can list your anonymous trust as one of the members of the LLC. This is legal, and you do not have to file it with the state, meaning the information of officers is kept anonymous.
- Take advantage of anonymity. Many lawsuits against large companies arise out of financial interest. Most individuals and lawyers will not sue a company unless they believe the company has assets that are worth suing for. An anonymous LLC hides the company's officers and assets, meaning people are less likely to sue.
Common Myths of Anonymous Corporations or LLCs
There are a few common myths about anonymous companies or LLCs that should be dispelled:
- Anonymous holding companies are always doing illegal activities. This is a myth. Some companies just want to avoid frivolous lawsuits that could potentially bankrupt their business and their personal assets.
- Business owners cannot remain anonymous. This is also a myth. With the right steps, business owners in some states can protect their identity.
- Anonymous corporations cannot be identified. This is also a myth. No one can guarantee 100 percent confidentiality. While an anonymous company reduces the odds of legal liability and the risk to its assets, anonymity is not a guarantee.
Benefits of Anonymity
There are some very real benefits of anonymity as well, including:
- Limited liability protection
- Tax advantages
- Privacy for your business
All of these can be good, valid, and legal reasons for creating an anonymous company structure.
Anonymous LLC in New Mexico
Some states, like New Mexico, do not require annual reports. Thus, it is easier to have an anonymous company.
New Mexico does not require you to do annual reports on your business information. Even if the state decided to publicize ownership information or changed its rules in the future, it would not be able to do so.
A great advantage to the state of New Mexico is that they don’t require your residency to form an anonymous company, which makes it a good option if you prioritize privacy in your business. One disadvantage to New Mexico is that you’ll still have to pay corporate income tax.
In New Mexico, the law requires that the registered agent and business organizer's names appear on the Articles of Organization.
Anonymous LLC in Delaware
Delaware is a business-friendly state, as it doesn’t require you to: pay corporate income tax or be a citizen of the state. You’ll have to pay a small franchise tax, but nothing more.
Keep in mind that setting up a company in Delaware can keep your information public. Still, when you open a bank account, you will have to present the Operating Agreement for the LLC (which includes the information of the company owners and managers.)
Other States that Allow Anonymous LLCs
States like Wyoming and Nevada also allow anonymous LLCs. The option is available in other states too, but the business legislation there might not be as beneficial as it is in any of the aforementioned states.
Some of the other states that allow anonymous companies include:
- New Hampshire
- New York
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
It is best to have your anonymous LLC where you are doing most of your business. because it will be more convenient for your taxes. However, if that doesn’t work in your situation, you can decide where you want to place your anonymous LLC.
Legal Support to Create an Anonymous LLC
You can consult a lawyer who can help you with this type of legal entity. As lawyers can provide attorney-client privilege. If you need help creating an Anonymous LLC, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers on its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
What is anonymous company ownership?
Anonymous company ownership refers to a structure where the beneficial ownership or control of a company is not publicly disclosed. This means that the identity of the individuals who own or control the company is not recorded on any public register, making it difficult for outsiders to determine who is ultimately behind the company. Company ownership anonymity may be pursued for a lot of valid, legal reasons (such as the need to stay private, for example.)
What is anonymous corporation ownership?
Anonymous corporation ownership refers to a company structure that allows business owners to remain private without divulging their information publicly. While their information will be on record when registering the corporation, their names and addresses will not be public for everyone to see.