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Preserving Anonymity in a State that Discloses Ownership Information

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Most states require disclosure of ownership information, and only a handful of states do not.

Examples of states that require disclosure of ownership information include California (CA), Florida (FL), Illinois (IL), New York (NY) and Texas (TX), just to name a few. In such states, you cannot form a company without disclosing who owns the company.

For All States, Except California

To get around this issue, we recommend forming TWO LLC’s. The first would be a holding company, whose only purpose is to own the child LLC. The holding company (or parent) would be an Anonymous LLC who owns a local, transacting LLC in your home state (the child).

The purpose of the child is to conduct business in your home state, to have bank accounts, and do whatever it is you want to do business as. You don’t own the child. You own the parent, and the parent owns the child.

Then, when we register the child in your home state, we disclose the ownership as the parent, thereby preserving your identity.

For California Only

In California only, our recommendation is very similar to the above for all other states, with one important difference.

First, we recommend forming TWO LLC’s. The first would be a MANAGEMENT COMPANY (not a holding company), whose only purpose is to MANAGE the child LLC. The management company (the parent) would be an Anonymous LLC that manages a local, transacting LLC in California (the child).

The purpose of the child is to conduct business in California, to have bank accounts, and do whatever it is you want to do business as. You WILL OWN the child, but the child will be MANAGED by the parent. Parent is a “Member Managed” LLC (no FEIN needed). Child is a “Manager Managed” LLC, with the parent as its manager.

Then, when we register the child in California, we are required to either disclose the owner(s) or the Manager, so we disclose the managing LLC to preserve your identity.

Need Help Picking the Right Company to Form?

We’re proud to announce the world’s first (so we think) AI-based entity selector tool. It is in BETA (still a PROOF-OF-CONCEPT), but factors in the state (or states) where you conduct business, whether you want anonymity, tax issues (including the Trump Tax Reform Act of 2017) and much more. It only takes a few minutes.

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4 comments

  • Great articles Larry! I’m learning a lot. I noticed that the Florida articles of organization on sunbiz states that listing the LLC members name and address is optional.

    • Hi, Michael.

      Sunbiz can be frustratingly confusing. When you read their material, it does indeed appear that you do not need to disclose Members (only Managers). However, there are a numbers of problems:

      • Sunbiz requires entry of at least one Manager or Member, before permitting you to the next screen, when creating a LLC.
      • Florida requires annual reports, and there, it is not optional. You must disclose at least one Manager (if Manager Managed) or one Member (if Member Managed).
      • Like all states, Sunbiz requires disclosure of the Organizer and Registered Agent (so if you want anonymity, you’re going to need help filing in Floriday anyway).
      • Banks in Florida are particularly concerned with ownership information at Sunbiz. We’ve heard of companies not being able to get bank accounts, without listing at least one Member (I assume such folks have submitted their paperwork by paper, versus the online form).

      So, you cannot get anonymity in Florida, without doing the parent/child setup we recommend in this article.

      Larry.

  • Larry,

    I had read all your articles and it’s amazing all I learned from you. Thank you for sharing your knowledge.

    I have a question for you. If a form an LLC in NM, let’s say the name is MyCOMPANY INC, as a parent company, the child company I create in Florida, will be under MyCOMPANY INC and no personal name will be needed?. Can I just create an LLC in Florida just using the NM LLC?. This is the part that is not clear to me when it comes to preserving my personal identity.

    Thanks!.

    • Hi, Mark.

      Thank you for your kind words.

      The quick answer is yes, you are correct. The longer answer is that we need to disclose ownership information, organizer, registered agent and physical mailing address. The key is to not use information that can tie back to you personally and therefore be disclosed by a secretary of state.

      Therefore, having an anonymous holding company owning a Florida operating company is how to prevent ownership information being disclosed by the State of Florida (actually, ownership information is being disclosed, but it’s the holding company that is disclosed, not your personal information). Hiring an organization like us to deal with the rest is how you prevent your name from showing up with the other pieces, including organizer, registered agent and physical mailing address.

      Larry.

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