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Pros and Cons of an Anonymous LLC – Does It Really Work?

Pros and cons of an anonymous LLC
(Last Updated On: November 15, 2023)

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Starting a business has become a lot easier, thanks to numerous available resources and advancements in technology. However, this has also increased the chances of anyone with a connection to the internet gaining access to company records. This is why many entrepreneurs are opting for anonymous businesses, such as anonymous LLCs.

As a business owner, your privacy might be of great concern to you, thus registering for an anonymous LLC just might be the thing you need. Starting an anonymous LLC allows you to gain privacy regarding business matters. This means you don’t have to worry about people finding you own a particular business.

Hiring a registered agent is one of the crucial factors in starting an anonymous LLC. The right registration company offers complete privacy and makes it easy to run an anonymous business. Northwest Registered Agent is the ultimate registration company for privacy that offers LLC formation services for just $39.

In this article, you will learn about all the pros and cons of an anonymous LLC to see if this is the right choice for you.

What Are the Pros and Cons of an Anonymous LLC?

In an anonymous LLC, the names of members and owners aren’t published publicly. All identities remain hidden and protected by the state in which the LLC is registered. Currently, four US states allow anonymous LLCs: Delaware, New Mexico, Nevada, and Wyoming. These anonymous LLC states offer complete protection to private businesses.

The process involved in registering an anonymous LLC includes coming up with a business name, finding a registered agent, and filing all important documents with your chosen state. A good registered agent will help you throughout the registration process and will make sure that everything is done confidentially. Register your anonymous LLC for $39 only.

So, should you create an anonymous LLC? Here are all the anonymous LLC pros and cons that can assist in your final decision.

Why You Should Create an Anonymous LLC

Listed below are several reasons why an anonymous LLC might be just what you are looking for when it comes to keeping everything private. 

1. Protection of One’s Privacy

A major advantage of creating an LLC that’s completely private is that all of your sensitive information remains hidden from the public. This includes your personal details and those related to your business, such as business assets, property investments, and other private information.

2. Avoiding Lawsuits

As a business owner, you don’t want to be subjected to any form of lawsuit that could potentially harm your business. Having a private business allows you to keep both your identity and information related to your business out of the official ownership records of an LLC. This way, you avoid all sorts of litigation.  

3. Reduced Harassment Risk

Since details of members of an anonymous LLC are not available publicly, this greatly reduces any form of harassment risk to both the members and the business. Your business information stays protected while keeping all affairs out of the public eye. 

4. Your Assets Stay Protected

When you create a private business, you get a corporate veil of protection. This ensures that all of your business assets are protected from various threats, like personal creditors. These are people you owe money to, such as family and friends.

5. Enjoy the Benefits of a Regular LLC

Creating an anonymous LLC allows you to enjoy all the benefits that come with a regular LLC. This includes things like tax advantages, the ability to survive, limited liability protection, and the flexibility to operate your business however you want.

6. Tax Benefits

As an LLC owner with a private business, you enjoy numerous tax advantages. For instance, since you are the owner, your income is not taken into consideration when you file your taxes. This greatly reduces tax liability. 

7. A Flexible Business

You can construct your business in whichever way you prefer. This allows you to have the ability to customize your LLC according to your requirements. Having a flexible business means you can alter it based on how the current market of your chosen industry is performing.

8. Limited Liability Protection

Similar to a regular LLC, you get limited liability protection, as mentioned earlier. This means that all of your assets remain protected from your business liabilities. For example, if your business were to fail for whatever reason, you will not be responsible for the company’s debt liabilities and financial losses.

Moreover, in the case of an anonymous LLC, the actual owner of the business won’t be disclosed if the business fails. 

Why You Shouldn’t Create an Anonymous LLC

Despite all the benefits that come with an anonymous LLC, there are also some downsides to this type of business structure.

1. Not Having Complete Anonymity

You cannot achieve complete anonymity despite being registered as a private business and having your details off the public records. There are certain institutions and people who will still have your information. 

This includes the IRS, incorporating services, banks, governmental institutions, suppliers, employees, clients, partners, vendors, and so on. Some of these people or entities can use your information for public purposes if need be.

2. Required to Pay Taxes

A private LLC is still a business, and every business is required to pay some form of taxes. This includes franchise tax or self-employment tax.

3. Risk of Lawsuits

Private businesses can still be subjected to some form of a lawsuit. This could disclose the identities of the owners, partners, clients, and related third parties that might be doing business with the LLC. This also includes registered agents and law firms.

Moreover, any of these entities might have to legally act for your anonymous LLC if they are called into court due to a subpoena.  

4. Federal Employer Identification Number (FEIN)

You need to register for a FEIN to form your anonymous LLC. This is an important step, and it’s needed to open your business bank account. However, this means that you will need to file your application with the IRS on their website, resulting in disclosing your identity.

5. Drawbacks of Limited Liability

You do have some form of protection from personal liability as the owner of a private LLC, however, it’s not definite. The limited liability protection could potentially get weakened if you are being irresponsible with your actions.

6. Complicated and Costly

Setting up an anonymous LLC is a complicated process and maintenance of the business tends to be on the more expensive side. Plus, your anonymous company will be required to follow all rules and regulations on a state and federal level. This can be quite time-consuming and tough.

7. Hard to Dissolve

Dissolving an anonymous LLC can take a while. All members might be required to go through additional steps to dissolve it. This entire process can take a long time.

8. Difficulty Transferring Interests

Members of an anonymous LLC won’t be able to transfer their interest from the business to a different party. This is because the other party won’t know anything about the original members unless they get approval beforehand. 

Difference Between a Standard LLC and an Anonymous LLC

An anonymous LLC is pretty much the same as a regular LLC, except with one major difference. The identities of all members and owners aren’t available to the public. All anonymous LLC states that you register your business in are required to protect the personal information of all its shareholders.

Owners of a private LLC also have the advantage of keeping their business life separate from their private one. Plus, the public won’t be able to link to the items you purchase anonymously.

Looking at it from a legal perspective, there isn’t much difference when it comes to registering a regular LLC or an anonymous one. A limited liability company tends to be flexible, which means as a business owner, you enjoy several benefits, like tax advantages. Plus, forming an LLC is a lot simpler as compared to forming a corporation.

Similar to your standard limited liability company, an anonymous LLC offers all the benefits that come with your regular limited liability company. 

When it comes to registering an LLC, regular or private, the right registration service can make all the difference. If you are looking to keep all of your personal and business information private, then Northwest Registered Agent can help you achieve that goal. They greatly value the privacy of their clients. You can get a great deal for $39 only. 

Pros and Cons of an Anonymous LLC – Conclusion

For many years, limited liability companies, both regular and private, have been one of the most popular business entities. There are several reasons why you would want to keep your LLC anonymous, such as avoiding hackers, protection of your privacy, avoiding media scrutiny, and so on.

No matter what your reasons are for becoming an anonymous business owner, you get to hide away from the world and conduct all of your business affairs without stressing about what others think. This allows your business to grow while keeping all of your affairs private.

Are you ready to register your anonymous LLC? Visit Northwest Registered Agent and get a great deal for $39 only.

About the author

Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.

As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.