Not every budding author has the clout or penmanship of a Dr. Seuss, George Orwell or even Robert Galbraith, but many authors like the three mentioned, do want to write under a pen name (sometimes called nom de plume or assumed name) for legitimate reasons.
This law firm represents many such authors.
Writing and publishing anonymously isn’t overly difficult, but one does need to take care: anonymity is only as good as the weakest link in a rather long chain of actors. Therefore, an author publishing under a pen name must make sure the links to achieve anonymity are strong.
Step 1: Form an Anonymous LLC
It’s best to form an Anonymous LLC and name such company with the pen name you wish to use, using an actual law firm or properly licensed attorney to form the Anonymous LLC for you. This is one of the times you want to avoid “all those Internet companies” who are not actual attorneys.
The reason it’s important to form an actual company, versus just using the pen name yourself, is that an actual company actually exists. By doing so, the company is able to enter into contracts, enforce its copyrights, and more, as itself. If you just make up a name, and just write in that pen name in submitting your copyright, entering into a publishing arrangement, or even just using an Amazon account, you run the risk of losing your authorship entirely. This is because you have no legal basis to claim that you are the pen name — without a lot of expensive litigation and evidence. And further, if you need to provide financial-based information for your pen name, you have no ability to do so: Your pen name won’t have a social security number, for example, and therefore you cannot obtain a merchant account without releasing your personal name.
The reason it’s important that you use an actual law firm or properly licensed attorney to create your Anonymous LLC, is that only a properly licensed attorney or law firm can provide attorney-client privilege and confidentiality, and only such organizations are going to be setup to maintain the confidentiality of its clients. Now, like everything else, this isn’t perfect. Remember the Panama Papers? A rogue employee at the law firm released a lot of sensitive attorney-client information. Fortunately, this is very rare, and such law firms have significant resources and capability to protect its clients. The other “Internet companies” don’t even try to preserve client information, and don’t know how to respond to requests from law enforcement officials, members of the press, private investigators or even hustlers and criminals attempting to steal an identity.
Step 2: Form Other Relationships Under the Anonymous LLC
Once you have formed your Anonymous LLC, then pretend you are working for the Anonymous LLC, just as though you are an ordinary employee at any other company. Need an Amazon account? Open it up in the name of the Anonymous LLC. Want to hire a publisher? Contact the publisher on behalf of the Anonymous LLC.
This is the same for merchant accounts, banks accounts, copyright filings and much more. The Anonymous LLC is the owner of everything, and you’re just an “authorized representative.”
Now, some vendors will want to know who you are and why you have any authority whatsoever to act on behalf of your Anonymous LLC. This includes:
- Banks. Bank accounts will be in the name (i.e. owned by) the Anonymous LLC. However, you will be a signatory, and the banks are required by federal law to know the signatory. This is confidential, and it’s okay to release your information to your bank to explain you are the owner of the Anonymous LLC. (Note that you certainly don’t need to explain that the name of your LLC is the pen name of published works, and I cannot imagine the bank will really care).
- The IRS. If you are opening up a bank account, you must get a FEIN for the Anonymous LLC. To get a FEIN, you must identify a “Responsible Party” for the IRS, who is someone that is either an owner or in control of the company. This information is also confidential, and there’s no way around letting the IRS know you are the responsible party for your Anonymous LLC.
- Merchant Accounts. See “Banks” above. Same issues.
- Publishers. Some publishers may demand to know who actually authored the material you wish to publish. This is because publishers can be legally liable for the copyright infringement of their authors. As prudent businesses, such publishers may want to know who the actual author is. When this happens, you need to conduct some research to see if the publisher is (1) reputable, (2) capable of maintaining your confidence and anonymity, and (3) willing to sign a “Non-Disclosure Agreement” (or NDA) / Confidentiality Agreement. If not, you need to keep looking for another publisher.
Step 3: Avoid Telling Anyone About the Connection
Whether you hire ghost writers, contractors, employees, family members or others, don’t let people connect the dots. Everyone should believe they are working for the Anonymous LLC, and you’re just another cog in the wheel. And, all such folks should sign iron-clad agreements that demand confidentiality and non-disclosure. Make sure such agreements are generated by competent attorneys, so you can be sure such agreements are enforceable.
One of the biggest problems for authors trying to remain anonymous under a pen name, is disclosing to friends and family. You may think you can trust your best friend, but the truth is, they are all human and even under the best of circumstances, they can make mistakes. Do you remember how Banksy the Artist was accidentally revealed? (A friend accidentally said his name on a podcast, but then didn’t even bother editing the podcast to remove the slip up). It may pain you to do this, but you must maintain the anonymity of your pen name with everyone, even your closest relatives and friends.
Like a strong chain with no weak links, you can maintain the anonymity of your pen name for a published work by taking precautions and setting things up properly from the beginning.
Law 4 Small Business, P.C. (L4SB). A little law now can save a lot later. A Slingshot company.
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Do you know how this applies to self publishing on Amazon?
We have a number of clients self-publishing on Amazon, although I am not aware of the particulars (our clients do it themselves, after we setup the companies).
In general, Amazon is like any other vendor or publisher. They will want to know who they are dealing with personally, either from a personal guarantee perspective or authorization perspective, but if you’re careful about indicating who is the “author” versus owner of the published works, you should be okay.
For anyone that has gone through this process with Amazon, I would sincerely appreciate hearing about it. I would love to publish your comments — good, bad or otherwise — it’s important to get information out there.
Thank you. Larry.
Such great information, thanks. So, I would need to start by hiring a lawyer in the state in which I reside? Thanks.
If you have an existing LLC , is there a way to convert it to an anonymous LLC?
Yes, but there are limitations. Please read this blog article: https://www.l4sb.com/blog/can-existing-companies-be-made-anonymous/.
Thank you. Larry.
So, how much do you charge for this service? Just a ballpark idea, because I am considering it.
It depends on where you’re located, and whether you need a parent/child structure or not. We charge $199/company (plus state fees). We also charge $129/year for the Registered Agent per company, and give that to you for free, for the Anonymous LLC (at the time I’m answering this). You may need a virtual mailbox, too, although you don’t need to use ours — although we’re reasonably priced starting at $20/month.
Thank you. Larry.
On another forum, they suggested getting an LLC to keep real identity hidden.
I researched making an LLC out-of-state in one of the few states that does NOT require annual reporting of real identity. Note also that three states require LLCs to publish a notice in the newspaper.
Forming an LLC outside of your home state will require you to register that LLC in your home state as a Foreign LLC. That means double the fees, taxation, filing, etc. If your home state requires annual reporting, your real identity will be exposed online. Defeats the whole purpose of going out of state.
It seems the only way to work that is to LIVE in one of the few states that doesn’t require annual reporting.
You didn’t have a question here, but I did want to comment: It’s not always you need to file a “foreign LLC in your home state”. You need to do that, when you have an out-of-state LLC that is operating in your home state. Operating means “conducting business” in your home state. Simply owning an asset is “not conducting business” in most states, and therefore such a LLC will not typically need to file as a foreign LLC in your home state.
Another issue is you mentioned “double the fees, taxation, filing, etc”. That’s not always true, either, depending on exactly where you are operating and where you’re not operating.