Two company LLC structure as asset protection strategy
I stumbled upon a lawyer's website while searching for LLC information and this article piqued my interest: http://www.lonestarlandlaw.com/Anonymity.html
It describes a two LLC's structure designed for asset protection and anonymity. One LLC ("Holding") owns an asset and another one operates the business. The second LLC ("Operating") has no assets and deals with customers, vendors, etc. There is also no easily obtainable trace from either LLC to actual people behind them because they were formed by an "anonymous trust".
However, the article (and other articles on the site) stop short of explaining how this structure is established and operates and this is what I want to find out from people who use this kind of corporate structures.
These are the questions that I would assume large apartment owners or syndicators would know the answers to:
1. How is "anonymous trust" created? (the site claims it's their "know how" but I don't believe they are the only ones who came up with this idea)
2. Does one LLC own another or both are owned by a trust or a physical person?
3. The article advises to add a DBA to each LLC and use it instead of the company name. What is the advantage of this technique? If the company name is "Blue Sky Properties LLC" and DBA is "Green Lake Apartments", what difference does it make from the asset protection perspective? If a tenant sues "Green Lake Apartments", the suit automatically goes to "Blue Sky Properties LLC", doesn't it?
4. How does money flow from the Operating LLC to the Holding LLC, to the actual beneficiaries of the companies and back? Does that de-facto point to the actual company owners thus rendering the entire anonymous structure useless?
5. Do Holding and Operating companies have to have a formal agreement or Operating LLC just uses the asset while Holding looks the other way ? :-)
6. How are assets (real properties) acquired in such a manner that the physical person's name/address does not show up in any public records, especially if a physical owner has to personally guarantee a full recourse loan? Does full recourse loan make the whole structure useless?
7. Who signs all documents for both LLCs and is such person assumed to be a (partial) owner of both companies in case of a lawsuit?
8. When is the right time to create both Holding and Operating LLC's if no assets has been purchased yet?
Thanks
Nick