Anyone have experience setting up anonymity with a Delaware/Wyoming Llc? I understand the concept, but not sure on how to officially set up the structure. Is it as simple as filing a manager managed in Delaware?
Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.
Some level of "anonymity" is possible, but expect some work, cost, and remember the limitations. First, it's only for the public website. Lots of people will have your info - your bank, the IRS, anyone you do business with, and your tenants if you sign the lease. In fact, a new law was just put in place requiring any beneficial owners to report annually to FinCEN. It's tough to maintain anonymity without another person involved, because somebody needs to sign the company registration and file the annual reports, in both the LLC state and your local state. To make it happen, you would probably need more than one corporate entity, using one from out of state in an anonymous state. It's more complicated than simply filing a single form.
@Sean Morrison Right, more than one would definitely be necessary. Have an LLC in the state of the property with the sole member being a Wyoming LLC holding company. The WY LLC is managed by an appointed manager, therefore leaving the members anonymous. The manager could be a member, but officially that's not public. Is this correct, or am I missing something?
@John Carlin , welcome to BP. Unless you are already massively wealthy why would you possibly want anonymity? First it means you are setting up several entities instead of just one or 2. Second it costs more to run, you have to run multiple sets of books and quite likely several tax returns depending on how you set up the tax status. You will have to keep several bank accounts, insurance, etc. Third, who are you going to trust to run it all? How do you expect to run it and stay anonymous? Are you going to pay an attorney to write checks, sign purchase offers, deeds, insurance forms, loans, mortgages, etc? What bank is going to loan money to an anonymous LLC? Trump has a good reason to have an anonymous LLC head a company he owns, I doubt that you do. I also doubt that you can afford it or that your portfolio will be able to turn a profit if you pay to keep it in place. How will you go to REI meetings and make connections and build a network if you are anonymous? How will you get wholesalers to send deals to an anonymous entity? How will you spread the word to all your friends to send folks to you who are selling their house if you are an anonymous owner or buyer? Being anonymous sounds cool and smart, but it is not affordable to most and impossible to all but very wealthy investors.
Buy insurance, run your business right, form one or at most layers of companies, and work on buying real estate before you try to set up a protection scheme that will drain 50% of your profit for the first 5 years and slow your investing down to a crawl.
Remember, the goal of anonymity is not to actually remain anonymous from everyone. It's just to make it difficult for hungry plaintiffs attorneys to find out what all you own, which will hopefully make them either turn down the case or settle for a lower amount. And to answer your question about how the manager/member split works, it depends on the state where the property is. Some states are asking more questions about organization managers (like who those member are), while others don't care. Start by reviewing the LLC forms for the state where the property will be. That will tell you what all needs to be disclosed, and what all then can be protected.
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