An anonymous LLC is a limited liability company where the owners, members, or managers cannot be publicly identified by the state or any other person or organization hence the term ‘anonymous.’ They can also sometimes be referred to as private LLC or confidential LLC. Most people do this for security reasons to protect against criminals and also to keep a low profile.
Benefits of Anonymous LLC
Forming an anonymous LLC has plenty of benefits other than the ones briefly mentioned above.
- For starters, you get liability protection. This means that in the event the company goes bankrupt and has some unsettled debts, your personal assets cannot be used to cover these debts. Only assets belonging to the company may be seized and auctioned off.
- Another upside of forming an anonymous LLC is the tax advantages. We’re not saying that anonymous LLCs don’t pay taxes, it’s just that the amount of taxes they pay compared to a sole proprietor or a partnership is low. This is because they are allowed more deductions by the IRS such as medical insurance expenses. To get the whole scope of the tax advantages of your anonymous LLC, please consult with a professional tax accountant as they are better informed.
- Distances the owner from the business. In the event that the company is linked to any wrongdoing, it is less likely that this will fall back to the owner despite them being on top of operations. This is very helpful especially in instances where the owner is associated with multiple businesses and wouldn’t want the bad PR on one company to affect the image of other businesses.
Which States are the Best to Form an Anonymous LLC in?
Currently in the United States of America, only four states allow the incorporation of anonymous LLC. These states include Wyoming, Nevada, Delaware, and New Mexico. Out of all these states, Delaware is arguably the best state to form an anonymous LLC and this is down to a number of reasons. One is the fact that it is the only state that has the Court of Chancery that is streamlined and dedicated to business matters. Also, the state laws offer additional personal liability protections to company owners and are very watchful when it comes to keeping fraudulent LLCs out of Delaware.
If your priority is keeping taxes low, then Wyoming might just be the best option for you. Corporate income tax for an LLC is not mandatory in the state which makes operating a business in the state very cheap. However, they do require a fee for your annual report but the charges are very meager, could be as little as $50 depending on the value of assets.
Information about Contracts
For contracts associated with anonymous LLCs, the legal name of the LLC should be included in the contract. To preserve the identity of the person undertaking the contract, one may put in “Authorized Representative” or “Member” where name and title are required. In the rare event that your legal name is included, make sure that there is a confidentiality clause that protects your identity.
