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Regular LLC versus Anonymous LLC

What is a LLC?

A limited liability company (LLC) is a form of business entity that is permitted in all 50 states. Many small businesses prefer LLC’s over corporations because of their flexibility, low-cost and ease to maintain.

Limited liability company regulations vary from state to state, and you must follow the requirements of the state you are forming it in. All states require you to identify the Registered Agent and the Organizer on your LLC application and most also require you to identify either the managers or the members of the LLC. However, not all states require that you disclose this information, hence the phrase “anonymous LLC”.

What is An Anonymous LLC?

What is the difference between a “regular LLC” and an “anonymous LLC”? An anonymous LLC is actually a regular LLC that has been created in one of the states that does not require you to disclose the managers or the members of the LLC. There is no legal difference between a “regular LLC” and an “anonymous LLC”. However the “anonymous LLC” does not disclose the ownership information of the LLC. You will also see anonymous LLC’s referred to as “private LLC’s” and “confidential LLC’s” on the Internet.

States do not offer or provide “anonymous LLC’s”. If you call your home state’s secretary of state and ask for help on how to form an anonymous LLC, they probably won’t know what you’re talking about.

Misconceptions To Understand

A quick Google search for ‘anonymous LLC’ reveals a spattering of misinformation. Here are some of the most ridiculous ones debunked:

  • Anonymous LLC’s Allow Tax Avoidance. FALSE- Anonymous LLC’s are taxed the same as any other LLC. That said, LLC’s do offer tax advantages for business owners.
  • Anonymous LLC’s are Totally Untraceable. FALSE- The average person will not find out you own the company. However, if used improperly LLC’s are subject to piercing the corporate veil.
  • Anonymous LLC’s are Shady. FALSE- Choosing an anonymous LLC is a great option for anyone looking to preserve their privacy,
    and we have many clients choosing anonymity for legitimate reasons, including victims of previous abuse or harassment, landowners and property owners trying to avoid tenants from bypassing landlords, greater asset protection, competitor avoidance, and more.

What States Have An Anonymous LLC?

How does one form an anonymous LLC? In order to have an anonymous LLC, you must form said LLC in a state that does not require you to disclose the members or managers of the LLC. The most popular states for anonymous LLC’s are Delaware, Wyoming, and New Mexico.

  • Advantages to Delaware and Wyoming- no corporate income tax! (Great for Subchapter-C taxable entites)
  • Disadvantages to Delaware and Wyoming- In Delaware, ownership information is disclosed to the state, though not published. Future changes in law could allow this information to be public. Both states require annual reports and annual franchise fees.

New Mexico is preferred for those individuals who value privacy above all else.

  • Advantages to New Mexico- New Mexico does not require ownership or management information to be submitted to the state at all, and there are no annual reporting requirements (or fees!). New Mexico doesn’t have ownership information to publish, even if it wanted to publish such information or changes its laws in the future.
  • Disadvantages to New Mexico- there is a corporate income tax. However, this is not really important for sole-member LLC’s and other pass-through entities (i.e. LLC’s being taxed under Subchapter S or as a partnership), because such LLC’s do not pay income taxes themselves. The IRS treats sole-member LLC’s as “disregarded entities,” which means their profits, losses and expenses simply flow through to an individual on “Schedule C” of their Form 1040. For other pass-through entities, such LLC’s will need to file a zero-tax tax form in New Mexico. The LLC’s profits and losses flows through to the member(s) on a Form K-1, so the LLC doesn’t pay income tax itself, although any members living in New Mexico may have to pay their pro rata share of income tax as a resident of New Mexico. We recommend consulting with a CPA who can help you manage your taxable footprint.

Should You Use a Lawyer?

Lawyers can do three things that no one else can do for you:

  • Provide attorney-client privilege;
  • Provide attorney-client confidentiality; and
  • Make sure things are done right, and consult with you

For about the same price as everyone else, but with the advantages above, Law 4 Small Business offers unique expertise on forming an Anonymous LLC.

Our unique experience allows us to make sure your LLC is filed right- the first time. Don’t risk your privacy. Additionally, we can pair your new Anonymous LLC with our Registered Agent and Virtual office services, offering another layer of privacy.

46 comments

  • Hi Larry,

    Thank you for the useful information! I have a few questions regarding structuring LLCs for anonymity. I would like my real estate LLC (Company A) to be held by a holding company (Company B).

    1. Do I make Company A single member-managed and Company B manager-managed with Company B being the member of A?
    2. Who manages Company B if it is manager-managed? Is this where the operating agreement comes in?
    3. Would two Registered Agents be needed?

    Thank you

    • Hi, Laura.

      Thank you for your questions.

      So, to restate your question, you want the following configuration (assuming all states, except CA — if CA, please read this knowledge base article):

      YOU/PARTNERS – – > (own) Company B, an Anonymous LLC as a Holding Company in NM or WY – – > (which owns) Company A, your Real Estate LLC

      (1) Company A would be a sole-member, member-managed LLC owned by Company B. So, yes, Company B would be the sole-member of Company A.
      (2) Company B can be Member Managed or Manager Managed. I don’t recommend identifying Managers in the Articles, and instead name an initial Manager in the Operating Agreement with procedures for removal, replacement, etc.
      (3) Each company needs its own Registered Agent

      Why do I say “in NM or WY?” The general rule we use is, if you will be the only owner of Company B and you want disregarded tax treatment, go with NM. Otherwise, WY is a good choice.

      Larry.

  • I am a FL resident and would like to purchase raw land in TN ad hold it anonymously. The property will not product any rental income. What is the process to this?

    • Hi, Sonny.

      The process is as follows: (1) Find and hire a real estate attorney in TN to consult with, and explain your intentions of holding the property anonymously in TN. Such an attorney can give you advice on the pros/cons in their state, as well as help you with the sale / transfer, as appropriate. (2) Assuming the real estate attorney agrees that an Anonymous LLC is the right mechanism to accomplish what you want in that state, then you can purchase the Anonymous LLC using this link: https://www.l4sb.com/product/anonymous-llc-formation/.

      Thank you. Larry.

  • Dave Howard /

    Hi Larry –

    Thanks for your information on this subject, very helpful. Question about Massachusetts:

    I’m launching a new company and want to form an Anonymous LLC to protect my identity (for privacy purposes). The business will be entirely online. I live / work / file taxes in Massachusetts.

    My question: if I form an Anonymous LLC in Wyoming or NM, will I still need to register with the Mass Sec of State? If so, doesn’t this negate the anonymity that the Anonymous LLC provides?

    Thanks for your opinion / advice

    • Hi, David.

      Unfortunately, I don’t have an attorney who is licensed in MA, so we’re really not qualified to answer that question. I wrote a blog article a while back that talks about when to file a “Foreign LLC”. Read the Article here. The issues are the same: Do you need to register a company in your state of residence, given the issues?

      If you answer “yes” to that question, then you need a “parent/child” setup to do it right. Please read the knowledge base article about conducting business anonymously in a state that discloses ownership information.

      Those two articles will help you understand the issues, although we cannot tell you for sure whether you need to register the company in the State of MA. Please let me know if you have more questions about this.

      Thank you. Larry.

  • I have a question about Florida. According to your article above, I quote, “An anonymous LLC is actually a regular LLC that has been created in one of the states that does not require you to disclose the managers or the members of the LLC.” . .
    The Florida Sunbiz.org website states the following in its instructions for creating a LLC, I quote:
    (01) “The names and street addresses of the authorized representatives or managers are optional.”
    (02) “A Manager or Authorized Representative may be an individual or business entity.”
    (03) “Do not list members.”
    (PLEASE SEE https://dos.myflorida.com/sunbiz/start-business/efile/fl-llc/instructions/)
    If I understand correctly, this is means that Florida is also a state where you can create an “Anonymous LLC”. Correct ?

  • Hi Larry, I’m a Colorado resident, and would like to form a sole member anon LLC in NM but operated in Colorado. All incomes will be generated in CO or online. If I opt “disregarded” to pass through all business income, do I need to file any NM state income tax returns? Thx

    • Hi, Jake.

      The quick answer is that if you have a LLC taxed as a disregarded entity, that means all its profits and losses flow to you personally and you report profits / losses on your Schedule C for tax purposes — so no, no NM state income tax nor do you need to file tax returns in the State of NM.

      With that said, the State of Colorado does permit anonymity. Therefore, if you’re operating in Colorado, I would advise you form a CO LLC as your Anonymous LLC. You can learn more, see pricing and order with the following link: https://www.l4sb.com/product/anonymous-llc-formation/?form-state=Colorado.

      Larry.

      • Hi Larry, this is very helpful. One more question, do I also need to use an agent and agent’s address to apply for EIN to remain complete anonymous? Thx again.

        • Hi, Jake.

          You cannot really remain anonymous from the IRS. In order to get a FEIN, you need to identify the “Responsible Party,” which is required to be someone either in control of — or owner of — the company. That Responsible Party must disclose a SSN, FEIN, or ITIN to the IRS.

          You should not use the Registered Agent’s address for any business of the company. You can use a virtual mailbox or other address provided by a CMRA where you’ve properly filled out USPS Form 1583. Again, you cannot be anonymous there either, as the USPS requires two forms of ID to pull this off properly.

          So, anonymity means “anonymous from folks looking you up on the Internet only,” not being anonymous from banks, the IRS, merchant account providers, etc. All those folks are supposed to keep your information confidential.

          Larry.

      • I thought that in NM a pass through entity would still need to file the “zero-tax tax form” mentioned above?

        • Hi, DB.

          If the pass-through entity is “disregarded,” there is nothing to file at all — and no “zero-tax tax form”. A disregarded entity means the entity doesn’t exist for tax purposes, and therefore doesn’t submit any tax forms at all.

          But, you are correct, other forms of passthrough (specifically, partnership and S-Corp) do require a “zero-tax tax form” to be submitted to the State of New Mexico.

          Larry.

  • Hello,
    I live in California and planning to create a Land Trust that I can purchase my personal resident with it. My plan is to establish out of state LLC to put it as a trustee. Which states are you recommending? Delaware, Nevada, New Mexico or Wyoming LLC
    or any others with lowest maintenance cost and privacy?

    • Hi, John.

      Thank you for your question.

      I have two lines of thoughts with this. First, from a lowest maintenance cost and privacy, it’s really hard to beat NM or WY. NV isn’t anonymous any more, so scratch that off your list. DE is good, but expensive. We form anonymous LLC’s regularly for folks, and you can learn more, see pricing and even order using this link: https://www.l4sb.com/product/anonymous-llc-formation/.

      Second, I really want to caution you about setting up such a complicated structure without involving a good estate and trust attorney from the state where the property is located. Here’s the problem: If you go and create a complicated structure, where a trust owns land and the trustee is an Anonymous LLC that may have some complexity proving ownership, you could really find yourself in trouble when you try to sell the property. We’ve had more than one client in the past, who came to us seeking help, because they were being sued by property purchasers when the title company was unwilling to provide title insurance given the documentation provided on property ownership.

      Just remember this: Trusts are state created entities (much like LLC’s), but unlike LLC’s, the laws can vary drastically from one state to another. Therefore, you definitely do NOT want to utilize the services of a non-attorney to help establish your trust.

      I’d love to sell you an Anonymous LLC here, but only if you have competent legal assistance telling you this is what you should be doing. We do NOT offer advice on trusts. I’m sorry.

      Larry.

  • Thank you for the providing great value through this blog.
    Here is my predicament:
    I have a virtual retail business and a virtual service business. I live in VA and work from home or anywhere where there is internet connection.
    I’d like to register a Company A LLC (S-Corp) that would own Company B LLC (the online retail) and Company C LLC (the online service). These are all single members LLCs. (The purpose of the S-Corp is to hold the money and do payroll).
    My first question is,
    1. Do I:
    1a) Register Comp A in DE, Comp B&C in VA or
    1b) Register all in DE and register B&C as foreign companies in VA or
    1c) Is there a third better option ?

    Second, I would like my personal address not to show up on any documents under ‘primary (physical) address of operation’.

    2. Can I use an UPS street address with #number (for the PO Box) for the primary address (given that I am using a Registered Agent services for the Registered agent’s address, like what your firm offers) when I fill out the VA registration application?

    3. I have to fill out a form that requires me to disclose my 3a) business address and my 3b) Official registered address. What is the difference? Is this the principal and the registered agent’s address?

    • Hi, Sofia.

      Great questions. Just to be clear, I think this is what you want to do:

      YOU –> (own) Company A LLC (An Anonymous LLC Holding Company), taxed as S-Corp –> (which owns) Company B (Operating Company) && Company C (Another Operating Company)

      Company A is a holding company. It should be doing NOTHING other than holding two companies, Company B and Company C. It is Company B and Company C, then, that would be conducting business, doing payroll for their respective employees, etc). Company A would have NO PAYROLL.

      As it relates to your options, (1a) and (1b) are both valid options, although I would recommend WY over DE for several reasons. First, WY is cheaper. Second, I’m still afraid DE will change its laws from pressure from the Feds. Between (1a) and (1b), (1a) is the better choice.

      If you wanted L4SB to help you, you can order from the following links;

      In regards to your Question 2, you shouldn’t fill out the registration yourself. This would make you the Organizer, and then your anonymity would be ruined. You really need a third party to do this for you. Yes, you can use what’s called a CMRA for the physical mailing address, and UPS qualifies. You cannot use a PO Box.

      In regards to your Question 3, The “office registered address” is the address of the Registered Agent. The “business address” is the physical mailing address of the company, which can be the UPS address.

      Good luck to you. Larry.

  • Hi Larry,
    I live in AZ and have a rehab home project in Illinois which I can not afford easily right now and is sliding into foreclosure with only enough time left to make a larger reinstatement payment and then the bank’s OWN loan modification which I do not like the terms of because it raises the monthly payment, or I could choose to refinance it outright or to sell it outright.
    A private cash investor team is interested in rehabbing and financing the rehab, paying off my existing loan so we could be free of it, and with the ADDITIONAL agreement of being named in a separate trust document as trustees of the property, but with me remaining as only original owner/Executor. This would put them in position of ownership, but not add them to title supposedly. As far as I can tell the title would not change and I would remain queen.
    Their payment would be the consideration of a place to live in for said period such as 7 years, or ten years which would be enough to cover the payback costs for the rehabbing including the labor, and parts. It is a big home, and there is plenty of room for me plus the two of them to cohabitate and not run into eachother with private entrances and two floors of living space. This way I could keep my home, get it rehabbed and make it rental ready, and then either pay them off with additional money or let them stay and live for the term allowance to come out alright..I’m doing this to save my family historic home and not have to sell it. I think that an LLC for my end of this, and maybe another one for all of us would be in order here, to guard against legal problems, injuries, etc. What are your thoughts please?
    Staying anonymous would be great anytime, and also ditching junk mail is worth its weight in gold every day of the week. But I assumed this wold have to be an Illinois Trust and an Illinois LLC or two LLCs…whatever you think best.

    • Hi, Gina.

      Thank you for your question, but to be perfectly honest, there are a LOT of issues here that would take too much time to answer in this forum. Furthermore, you have a lot of complex issues you need to navigate around. For example, read our blog article Why Selling Your Home to a LLC May be a Bad Idea, specifically because you could lose the homestead exemption that protects your home from creditors.

      Also, whether you put things in a trust, anonymous LLC or some other mechanism, you really need a strong contract to manage all of the pieces (i.e. what happens if one of these “investors” becomes physically violent?). There are just a lot of what I call “edge cases” here that can get you into trouble.

      So, please hire a local attorney in IL who can help you with all of this. We have an affiliate attorney in Romeoville, who is really good. He would be happy to help you through all of this.

      Larry.

  • Hi Larry, great article. Congrats… probably the best I found on the internet by far.

    I am almost convinced about the NM LLC although Wyoming is also interesting. I have one quick question.

    For non-residents in the US who have a NM LLC, I know it’s a pass-through entity which means my profits, losses and expenses simply flow through to me as an individual.

    Do you know what tax form obligations I have yearly?… if any at all?

    I have read on your blog about:

    The “Schedule C” of the Form 1040.
    The zero-tax tax form in New Mexico.
    The Form K-1.

    Not sure if I would have to submit any of these but if I do, I would like to know which ones and what the cost would be for you to file this for me. I have friends with US LLC’s (DE) who do not file any of that bc they are non-residents.

    thanks,

  • Also do we need to file NM state tax returns?

  • I have a S Corp in NY and have a DBA too under it so operating 2 business. My business involves purchasing for my clients, and I get multiple quotes so it’s a challenge to submit all the quotes. Can I have a annon LLC in other state and connect with same S corp EIN. Will ownership stay anonymous?
    Please advise.

  • Larry – Thanks again.
    Before I initiate registration on your website, I have few questions. Would appreciate if you could clarify on three questions below :

    New Anonymous LLC will become partner in the existing S-corp company that is registered in the state of my residence. In that case,
    1. Does Anonymous LLC need to file the tax in both states? Or taxes will flow through my Form K1?
    2. Will S Corp company have separate tax requirements for adding anonymous LLC that is registered with out-of-state address?
    3. Considering above questions which state from the options provided in your website (Delaware, New Mexico, Georgia or Wyoming?) you would suggest for forming anonymous LLC? While maintaining the owner name anonymous and needing virtual mail box address is on priority , I would definitely look for most economical option. I live in Northwest region.
    Thank you so much.

    • Hi, there.

      Just to be clear, if you want a LLC (anonymous or otherwise) to be a “partner” in an existing S-Corp, then you have rules as to what is possible otherwise you jeopardize the S-Corp treatment of your existing company. My understanding is that only US citizens, or other S-Corps, can be owners of a S-Corp. This also means LLC’s taxed as a disregarded entity.

      With that understanding, my answers to your questions are as follows:

      (1) The Anonymous LLC will be issued a K-1 from the entity it is a partner in. As I mentioned above, the Anonymous LLC will either need to be disregarded for tax purposes or be taxed under subchapter S itself, which means it will issue a K-1 to whomever owns it. Therefore, does it need to file in both states? No. It will need to file in whatever state it was formed in, if it has S-Corp tax treatment (although it’s a zero-tax filing, since the profits and losses flow through to the owner). Otherwise, if it’s disregarded, it doesn’t file any taxes at all.

      (2) I do not believe adding a new member to your S-Corp will have “separate tax requirements”. You’re thinking of if your existing S-Corp “transacts business” in another state. Simply adding an owner from another state, LLC or otherwise, will not impact its tax requirements.

      (3) I would recommend either WY or NM. With WY, you won’t have to file an income tax return if you elect to have the Anonymous LLC taxed as an S-Corporation, but you still have to file an annual report which requires at least $50 minimum franchise tax. In NM, there are no annual reporting requirements so no fee, however, if you elect to have the Anonymous LLC taxed as an S-Corporation, you need to file an annual income tax return. You wouldn’t pay any income tax, because it’s a pass-through entity, but NM does have a minimum franchise tax and that’s also $50. So, the two states are a wash.

      Thank you. Larry.

  • I resell things on eBay, Amazon, mercari, etc in Massachusetts without any business registration as of now. Would I be able to register an LLC in a different state despite operating inventory in Massachusetts?

    • Hi, Coy.

      Thank you for your post.

      You need to ask a licensed attorney in your state or a CPA may know the answer. Unfortunately, we don’t have anyone licensed in the State of Massachusetts to answer this question specifically.

      I will say, when one “avails” themselves of a state, such as keeping inventory, hiring a W2 employee (including yourself), keeping your “base of operations” in a state, that will usually be enough to say you’re “doing business” in your state, requiring registration.

      Larry.

  • Keith Garrison /

    Hi Larry…can a married couple form a New Mexico LLC, and is that registration more complicated?
    Thanks

  • Hello, I’m interested in opening an anonymous foreign-owned LCC (I live in EU). Can you say a bit more about how is anonymity (especially international anonymity) influenced by new regulations, specifically filling Form 5472 reports?

    Also, based on this article, I expect in either WY or NM I wouldn’t be taxed as a corporate entity, but in NM I might be taxed as an individual, based on this quote: “the LLC is not taxed directly. Instead the profits and losses of the business pass through to its owners, who report them on their personal tax returns.”

    My country doesn’t have a contract with US about avoiding double taxation, which in that case might be a problem. Can you tell me if I interpret this correctly? Thanks.

    • Hi Ana,

      Thank you for those questions. First, I’d like to address the question about anonymity, as I think it’s important to point out what anonymity an LLC can offer and what anonymity it can’t. An Anonymous LLC is a great legal entity because, if created properly, the LLC’s owners can avoid having their names publicly listed in a Secretary of State database for the state in which the LLC is formed. This means that members of the public can’t search for the LLC online and find out from the Secretary of State who owns it.

      While that perk is huge in and of itself, it’s also the only anonymity an LLC typically can bestow. To be clear, a Limited Liability Company does not keep its owners anonymous from the Internal Revenue Service or any state’s taxing authority.

      As you pointed out, foreign-owned corporations (and, as of 2017, foreign-owned limited liability companies) must file a Form 5472 with the IRS. This is an Information Return meant to give the IRS an understanding of who owns the American-based company and what the assets and revenue streams look like. These forms typically are not a matter of public record and cannot be accessed or viewed by the general public, meaning they have no impact on the anonymity I just described.

      Regarding the taxation of an LLC, a lot depends on how you elect your LLC to be taxed. As the owner of a single-member LLC (meaning an LLC with only one owner), the LLC would be treated by default as a “disregarded entity” — meaning it would not itself owe or pay any taxes. Instead, the profits and losses of that LLC would pass through to its owner and would subject its owner to personal income tax, both in the United States and abroad, depending on a variety of factors such as the character of the income, the tax residency of the owner, the tax treaties in place (if any) between the United States and the owner’s tax residence, and more. I highly recommend consulting with a qualified accountant versed in the tax laws of both the United States and your own tax residence country before starting any US-based venture.

      Thank you again for your question, and good luck with your new business!

      All the best,

      Ian Alden

  • Hi Larry, Thank you so muck for your prompt response. I have one more quick question. Can I use virtual address to form anonymous LLC? Which state among three( Delaware, Wyoming or New Mexico) I should consider if maintaining privacy is on my top priority? Thanks again.

    • Hi.

      As long as the “virtual address” you refer to is ours, or you otherwise have a “virtual address” with a properly licensed CMRA and filled out USPS Form 1583, then you can use that address as your “physical mailing address” for the LLC.

      As it relates to which is the best? They are all good, from a privacy standpoint. Personally, I believe the State of DE will change it’s laws soon, and no longer provide anonymity. I’ve been saying that for almost 2 years, however, and it hasn’t yet happened. So, any of the three are good.

      One final point, you can use your virtual mailbox from anywhere, for any of the states. There is no “mailbox in the state” requirement for those three states. If we were talking about CA or AZ, then I would be singing a different tune — but those states don’t permit anonymous LLC’s anyway.

      Larry.

    • Hi, there.

      Sorry for the delay in responding this time. If privacy is your top priority, I would recommend either NM or WY. I’ve been steering people away from DE, because they’ve been under a lot of pressure to change by the feds. Therefore, I feel NM or WY represent the best long-term option.

      Yes, you can use the virtual address to form an Anonymous LLC.

      Thank you. Larry.

      • Larry – Thanks again. Can you please let me know the charges and procedure if I want to start anonymous LLC in NM or WY. I don’t live in either of these states.

        I was away from this topic in between, hence couldn’t revert earlier. Thx

  • I have a question. I need to become a partner of existing LLC in my state but would like to value my privacy and keep my name anonymous. I do not live in Delaware, Wyoming or New Mexico. Hence I am thinking of forming anonymous LLC (in either of these three states) that will help me to value my privacy and then make that anonymous LLC as a partner of regular LLC that exists in the state I am living.

    Is that right solution to keep my name anonymous? Is there any other option to keep my name anonymous? Can I form anonymous LLC in either of these states using virtual address?
    Thank you.

    • Hi, there.

      Usually the only way to maintain privacy (i.e. not have your personal name associated with an existing LLC on the secretary of state’s website for that LLC), is to put an anonymous LLC between you and the pre-existing LLC. Don’t forget to put a decent “Purchase Agreement” together, or at least carefully review the Operating Agreement, along with financials, previous tax forms, etc. We have a blog article that covers some of this, if you’re interested. Read Considerations when Buying a Partnership Interest.

      Remember that privacy is only as good as the people around you, so consider requesting your new partner(s) sign a NDA / confidentiality agreement to help make sure they keep your name private.

      Good luck to you! Larry.

      • Hi Larry, Thank you so much for your prompt response. I have one more quick question. Can I form anonymous LLC in either of these states using virtual address? Which state should I go for if maintaining privacy is my objective? Thanks.

  • Robert Moore /

    I have a question I would like to get answered. If I own a current Wyoming LLC and this LLC then after some time starts and owns a New Mexico LLC, is this a protective and cost-effective strategy, if I am developing properties for sale or rent in Houston Texas under the operation of the NM LLC?

    • Hi, Robert.

      Thank you for your question. The short answer is that additional layers of LLC’s can always help from an asset protection standpoint, provided you’re careful in how you manage and operating the LLC’s. Conversely, just because you have several layers of LLC’s will not necessarily prevent the entire “house of cards” from falling down, if you’re mismanaging the LLC’s and/or give a plaintiff’s attorney a claim to “pierce the corporate veil” by commingling funds, for example.

      What I want to caution you on, is your use of the words “under the operation of”. If you’re “transacting business” in TX, Texas law requires that the company be registered in TX. Therefore, if you have a NM LLC and you’re “transacting business” in TX, the typical solution is to either file a “Foreign LLC” in TX for that NM LLC, or to obtain a TX LLC, which would be solely owned by the NM LLC.

      What is “transacting business” in TX? That’s a factual question, depending on a number of factors. I will say that if a LLC is simply “holding property,” like real estate or a bank account, that’s generally not considered “transacting business,” although if the LLC is a landlord, renting out property that would be considered “transacting business.”

      I hope this helps you. Good luck to you.

      Larry.

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