Interested in setting up a limited liability company (LLC), but aren’t thrilled about the idea of your name and address being a matter of public record? If you’re looking for an option that allows for a little more privacy, you may want to look into an anonymous LLC.
Although true anonymity is limited and specific rules can vary by state, an anonymous LLC can be a great way to enjoy some additional privacy while maintaining the same liability protections as a traditional LLC.
Read on to learn more about what an anonymous LLC entails, how it works, where you can file one, and some potential advantages/tradeoffs of this option.
What is an anonymous LLC?
Specifically, an anonymous LLC is a limited liability company that’s structured in a way that limits how much owner information is publicly visible in state records. In a “traditional” LLC, the name and address of the business owner are automatically a matter of public record, meaning anybody with the business name can search and find this information with relative ease.
In some states, however, LLCs are treated differently, and member/owner names are kept off public filings. These are known as anonymous LLCs—and while they do offer some additional privacy, it is important to understand that they aren’t designed to provide complete invisibility. For years, lawmakers have debated the risks associated with anonymous shell companies because they can be used to conceal the real owners behind financial activity.
In fact, in this type of LLC where an anonymous LLC, owner/member names and contact information may not be made public, but this information is still reported to banks and the IRS. As a result, the same legal obligations apply to owners of an anonymous LLC as they do the owners of a traditional LLC.
More specifically, an anonymous LLC relies on a registered agent and/or third-party organizer to file the LLC’s Articles of Organization. Therefore, instead of the business owner’s personal information being listed, the registered agent’s name and address are made public record instead.
Can an LLC be anonymous?
While an anonymous LLC does offer additional privacy when compared to a traditional LLC, it’s important to understand that no type of business can be 100% anonymous. Even in states that offer anonymous LLCs, you’ll still need a registered agent with a real contact address. And, of course, you’ll still be subject to the same tax filing requirements and compliance regulations as any other LLC.
In some cases, you may also need a separate business mailing address in order to file and maintain an anonymous LLC.
What states allow anonymous LLC?
State rules occasionally change, and disclosure requirements can vary by state—so it’s important to confirm with your state’s Secretary of State (or equivalent) before attempting to file an anonymous LLC. The four states that allow anonymous LLC formation are:
Furthermore, while some states allow limited disclosure of owners in public filings, other states do require member/manager names to be listed on formation documents or annual reports. Meanwhile, if you do business in another state, it’s worth keeping in mind that you may be required to register there too (which could reduce privacy if the other state doesn’t offer anonymous filings).
What’s the best state for an anonymous LLC?
There’s really no universal answer as to what state is “best” for filing an anonymous LLC. Ultimately, this will boil down to many factors, including where your business actually operates and how much privacy you need as a business owner.
For many small business owners, the simplest option is to form an LLC in your home state and use privacy-friendly setup choices, such as using a registered agent and a business address that’s separate from your home address.
Anonymous LLC states: What “privacy” actually means
Remember, too, that it’s impossible for even an “anonymous” LLC to offer 100% anonymity. When referring to anonymity in regards to an LLC, what this really means (in certain states) is that member and manager names (along with personal/home addresses) will not be made public record.
However, because anonymous LLCs rely on registered agents, this information is still readily available to the public, as is:
- Business addresses
- Banking identity verification
- Tax identity (such as EIN filings)
Meanwhile, even if your name and address aren’t listed in public records as a result of your LLC filing, it is still possible that this information will appear in any relevant:
- Lawsuits/contracts
- Business licenses
- Domain registrations (unless specific privacy settings were used)
How to create an anonymous LLC
If you’re interested in filing an anonymous LLC, here are a few steps you’ll need to take.
Step 1: Decide what privacy problem you’re solving
Start by considering your why for needing an anonymous LLC. Are you trying to protect your name and home address from becoming public record? Perhaps you simply want to reduce the potential for unwanted spam and solicitation. Some business owners will even apply for anonymous LLCs as a means of separating their personal identity from a business/brand or out of a basic concern for personal safety.
Step 2: Choose a state (carefully)
Next, you’ll need to decide on the specific state where you’ll file an anonymous LLC. As you explore your options, be sure to consider any state-specific privacy rules and/or ongoing compliance requirements. Remember, too, that if you operate locally, forming an out-of-state LLC could create some additional work for you and your members/managers.
Step 3: Use a registered agent
In order to file an LLC anonymously, you’ll need a registered agent. These are professionals who serve as a legal point of contact between you and the state for any matters related to your LLC. A registered agent will need to live in the state where you are filing, which reduces your need to list a home address publicly.
Step 4: File formation documents
Your registered agent will need to be the one to formally file your LLC formation documents, but these may still need to be signed by you and any other members of your LLC. As you prepare your formation documents, be sure to obtain any state-specific forms in the state where you’ll be filing your anonymous LLC. Keep in mind, too, that member/manager disclosure rules can vary by state.
Throughout this process, you’ll also need to keep all documents and records as organized as possible. This includes making copies of your formation documents for safe-keeping.
Step 5: Get an EIN and open a business bank account
Even with a registered agent providing their address and serving as a point of contact between you and the state, you’ll still need to complete identity verification measures. After all, the privacy offered through an anonymous LLC doesn’t negate your obligation to maintain regulatory and legal compliance.
With this in mind, you’ll need to obtain an employer identification number (EIN) through the IRS and open a business bank account—just as you would with a traditional LLC.
Step 6: Maintain separation and compliance
With an anonymous LLC, it is especially important to keep all business finances separate from your personal finances. This means you’ll want to use your business bank account (and possibly a business credit card) to handle all purchases and transactions related to your LLC. This will not only make things easier when it’s time to prepare your tax return, but it will also help you avoid compliance issues down the road.
Speaking of compliance, be sure to keep up with all your required annual reporting and renewals with the state where you filed your anonymous LLC. By staying on top of your filings, you can avoid having your LLC dissolved and having to start over from the beginning.
Benefits of an anonymous LLC
Filing for an LLC in a privacy-friendly state comes with some inherent benefits, including:
- More personal privacy (although specifics will vary from state to state)
- Reduced exposure of home address
- Less unsolicited mail/spam
- Added peace of mind for safety-focused owners
With all this in mind, anonymous LLCs are especially popular among landlords and other high-visibility business owners who may want to prioritize their own privacy and keep their details off of public records.
Downsides and risks to consider
On the other hand, anonymous LLCs aren’t for everybody—and there are some potential drawbacks to consider. Perhaps the most important thing to remember is that, despite the name, an anonymous LLC can never offer 100% anonymity. For example, your information may still be a matter of public record if you have any ongoing lawsuits against you, or in certain contracts/licensing arrangements.
Some other potential drawbacks to consider with an LLC include:
- Extra complexity and cost, especially if you’ll be forming an LLC out-of-state.
- The need to still register your LLC in your home state, which could negate some privacy benefits.
- The potential that you’ll need to complete extra verification steps for some banks or service providers with an anonymous LLC.
Ultimately, you’ll need to take into consideration your own unique needs and privacy preferences when you decide whether or not an anonymous LLC is right for you.
Getting set up the right way
Whether you opt for an anonymous LLC or a more “traditional” LLC, privacy works best when your business fundamentals are organized and compliant from the beginning. No matter which route you take, for example, you’ll need to file for an EIN through the Internal Revenue Service and open a dedicated business bank account to keep your business finances completely separated from your personal finances.
This, in addition to keeping your business information and documents carefully organized, can set you up for success and help you optimize the benefits of forming a limited liability company over any other type of business structure.
At Tailor Brands, LLC formation is one of many services we have to offer for business owners just like you. Let us take some of the stress and hassle out of getting your business set up and organized. If you decide to file in a state that offers anonymous LLCs, we even offer registered agent services to help you maximize your privacy.
Conclusion
Compared to traditional LLC arrangements, anonymous LLCs offer a bit more privacy in states where they’re offered—but at the end of the day, no LLC arrangement offers total anonymity or invisibility. Even with an anonymous LLC and registered agent in place, business owners and members still need to focus on legal compliance and take practical privacy measures. And because rules for LLC formation vary by state (and can change), it’s always a good idea to check (and double-check) state requirements before filing.
FAQ
An anonymous LLC is a limited liability company structured so the owners’ personal information is not listed in public state records, offering more privacy than a traditional LLC.
No. Anonymous LLCs provide additional privacy, but owner information must still be reported to banks, the IRS, and other authorities.
Currently, Wyoming, Delaware, New Mexico, and Nevada allow anonymous LLC formation with limited public disclosure of owner information.
It typically uses a registered agent or third-party organizer so the agent’s address appears in public filings instead of the owner’s personal details.
Anonymous LLCs can involve extra costs, compliance requirements, and reduced privacy if you must register to do business in states that require owner disclosure.