How to Hide Ownership of a Company?
How to hide ownership of a company is a concept that some business owners wonder if possible. Hiding ownership is not always done for illegal purposes. Learn more about anonymous companies.5 min read
2. Anonymous Limited Liability Companies
3. How Anonymous Companies Work
4. Understanding Business Owner Privacy
5. How to Use an Anonymous Trust to Hide Company Ownership?
6. Common Myths of Anonymous Corporations or LLC's
7. Benefits of Anonymity
8. Anonymous LLC in New Mexico
9. Anonymous LLC in Delaware
10. Other states that has Anonymous LLC
11. Legal Support to Create an Anonymous LLC
Updated September 7, 2021:
Are looking for a way to hide your identity as a limited liability company (LLC) owner? Anonymous LLC acts as a holding company, which is a parent business entity. How to hide ownership of a company is a concept that some business owners wonder about the possibility of. Hiding ownership of a company is not always done for illegal purposes. Sometimes, it is done to simply protect the identity of the business owners.
There are many reasons that a business owner might want to hide ownership. Hiding ownership is accomplished by creating a separate company and placing the assets into the new company. Then, the 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 is one that hides all ownership information. This is accomplished 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 may be filled in with individuals that actually 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 has all the names of the member in an LLC. While the member 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 do 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 the 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 LLC's
- Anonymous 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 does reduce the chances of legal liability and the risk to its assets, anonymity is not a guarantee.
Benefits of Anonymity
- Limited liability protection
- Tax advantages
- Privacy for your business
Anonymous LLC in New Mexico
New Mexico does not require you to do annual reports on your business information. Even if New Mexico 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. They are a good option if you prioritize privacy in your business. One disadvantage to New Mexico is that you’ll still have to pay for 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 on the other hand doesn’t require you to pay for corporate income taxes. There will also be a slight franchise tax, but that's it. Delaware also doesn't require you to be a citizen in the state. Delaware is business friendly.
Other states that has Anonymous LLC
As mentioned above Delaware and New Mexico are states that have anonymous LLC ownership. States like Wyoming and Nevada also permit anonymous LLC. Other states do too but not as beneficial as these mentioned.
It is best to have your anonymous LLC where you are doing most of your businesses. This may be in your home state. What's the reason? Because it will be more convenient for your taxes. But you have the option to decide where you want to place your anonymous LLC.
Legal Support to Create an Anonymous LLC
You can consult with a lawyer who can help you with this type of legal entity. As lawyers can provide attorney client privilege. If you need help with creating an Anonymous LLC, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to 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.