Tuesday, January 1, 2019

How to Establish an Anonymous LLC for Real-estate & Other Businesses - Step by Step

Haven't been able to get any straight answers about creating an Anonymous LLC? 

I know you feel, and I've got you covered! 

There's a lot of reasons why someone may want their LLC to be anonymous. Maybe a property owner doesn't want the tenant looking them up, or perhaps a business owner doesn't want to be a target for lawsuits.

Establishing an LLC (Limited Liability Company) and filing your Articles of Organization, can feel very intimidating. That's because attorney's typically only give you a few crumbs of info, and when you do finally do a free 30 minute consult with them, they give you so much confusing information and legal jargon, that it makes your head feel like it's going to explode.  I can't say this is all attorneys, but there are attorneys who overcharge small businesses thousands of dollars just for pushing a few papers... and attorney's get all that money because of our fear of doing something wrong or getting sued. This is one of the reasons that small businesses have so many difficulties getting off the ground. But with a little confidence and common sense, you can do most of this on your own. You can do it! (In my Rob Schneider voice.)

So, after several phone consultations with attorneys, quite a few online consultations with some business consultants, 2 weeks/100 hours of online research later, (and a partridge in a pear tree), I found the answer!! 

Now, I'm no legal expert, but I do have common sense and can add 2+2, which completely gives me the credentials to bring you this information ;) (joking) But since I found this awesome discovery, I thought I'd share it with you lovely people! No matter why you want your LLC to be anonymous, I've got the goods below: 

First, despite what most of the attorneys are telling you, there are more than just 4 states where you can register an anonymous LLC. Normally, they say you can only register an anonymous LLC in Delaware, Nevada, Wyoming, & New Mexico. But they're wrong... You can register an anonymous LLC in about half of the states in the U.S. The only downside to not registering your anonymous LLC in the 4 states (they keep beating into your head) is not having as strong of a charging order protection that these states offer, so if charging order protection is what you are seeking, you may want to register your LLC in one of those 4 states. Something new that happened in 2016 is that Ohio is now providing just about the same charging order protection as the other 4 states -- which is certainly worth checking into because there's no annual reports and only a 1 time registration fee of $99 buckages!

Here is the list of states that allow anonymous LLCs.

Secondly, I found 2 incredibly helpful videos that break down how LLCs work, why you need one, and how to structure your LLC anonymously, and why you'd want to make it an anonymous LLC.

Now, here's the scoop:

5 Main Things You Need to Register Your Anonymous LLC

1. Anonymous Street Address: The Secretary of State (SOS) needs a physical street address to your business, so they can deliver mail to it. You can use your business or personal street address, but if you want to remain anonymous, you can get a street address from a mailing service. Just make sure to put it under the name of the LLC. There's a place called iPostal1, which has mail forwarding and virtual mail service in all 50 states. You can also look up a local private mailbox service in your area, which will also give you a much less expensive rate than UPS and some other services. (Side note, the Secretary of State will not accept P.O. Boxes for a business address). 

2. Registered Agent: A reputable place is Northwest Registered Agent who has registered agents in all 50 states and was the most reasonably priced at $125 per year. With Northwest Registered Agent, you can have a Registered Agent available immediately upon signing up and they'll send you everything you need via email. There are many reasons you need an Registered Agent. One reason is because their name (instead of yours) is what will be publicly registered under your LLC at the SOS website. There are several other reasons to have a registered agent, which you can find on the LLC University website.

3. Organizer: Someone other than an LLC member who has zero interest in the company which fills out and files the LLC paperwork with the Secretary of State. (This can all be done online). This can be someone you hire, a trusted and capable friend or relative, or your Registered Agent. You can have a member of the LLC file the paperwork, but that will diminish the anonymity of your LLC.  Side note: your Organizer can use your anonymous business street address as their address since they are doing this on behalf of your business.

4. Operating Agreement: This is an internal agreement between you and your LLC partners or members who have a vested interest in the company. You don't need to submit this in to the Secretary of State unless your state requires it. You just need to have it on file in case the "shit hits the fan". You can get a free template of an operating agreement at the LLC University Website. You can also get another variation of an operating agreement from Northwest Registered Agent. You should have an attorney look over this agreement to make sure it looks legit.

5. Articles of Organization (Secretary of State Registration): Here's a handy list of all 50 states where you can file your SOS registration. The cost to register varies in each state.

Above and beyond the registration, a couple of other things you'll need to do for your LLC are: 

  • EIN Number: Get your EIN number from the IRS so that your LLC will be all the way legit. Just make sure to put the EIN under your LLC's name and not your personal name.
  • Bank Account: Regardless if you do an anonymous LLC or not, you need to have a bank account in the name of your LLC. so go to your local bank and set up an account for the business. Getting a credit card and establishing business credit can further substantiate your LLC.

  • Transfer Ownership: If you own Real Estate, you need to contact your local county auditor to transfer ownership of the property into the name of your LLC. Typically this is done with a quitclaim deed.

  • Unique Name Search: Make sure you have a unique name for your LLC business. Basically, you can't use the same name as anyone else. You can do a business name search on your State's Secretary of State website.

Now, one other thing you should do is get liability insurance for your company. Just because you're an LLC doesn't mean you won't get sued. But the LLC does offer many other advantages. If you want to make sure the "Corporate Veil is not Pierced" you'll need to make sure you Maintain your business appropriately

There's a lot of options when it comes to structuring an LLC or any kind of business for that matter... and there are so many stipulations, it can be so confusing! I went through hell trying to figure it all out.... but you won't have to, because I will be doing a future post about LLC structuring for the best possible outcome for taxes, asset protection, and legal protection. So stay tuned...

Also, I recommend that you do your own research and cross referencing to ensure that you are doing what's best for your business. What I'm sharing with you is the knowledge I've gained from research and experience... which saves thousands of dollars, but your situation may be different. When in doubt, consult an attorney. Legal Shield has attorneys at your disposal at any time for a mere $40 per month. You can't beat that. If you've had any experience with paying out for attorney consultations, you're aware that you can spend that much in just one visit. 

I have personally used Legalshield, and have been extremely satisfied with the service! You should also know that I'm not receiving any compensation for this referral. It's just a service that I have had a great experience with, and wanted to share it with you so that you can benefit from it too!

I hope this helps to save you from having to go through the frustration that I had to go through to get this information. If this article has saved you time, money, or headache, please share it with your friends! 

Thanks so much for stopping by! Cheers to you and your successful Limited Liability Company!