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.3 min read
Updated June 22, 2020:
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.
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.
If you need help with how to hide ownership of a company, 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.