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LLC law has melted my brain.

Discussion in 'Business & Tax Advice' started by Warbucks, Apr 14, 2009.

  1. Warbucks

    Warbucks Junior Member

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    I spent most of yesterday researching corporation and LLC law in the US in anticipation of forming an LLC for a blackhat project I'm working on.

    I'm in the process of setting up an LLC for some white hat stuff I do, that's easy. It's in my home state, I don't care about my name being on it, I'm my own registered Agent, etc.

    But for the blackhat stuff I want something a little more specific.

    Let's be clear. I am not looking to evade taxes. I am not looking to be totally anonymous and commit fraud. What I am looking for is something that will keep my real name off public records so that if I, say, do something blackhat that pisses off Google they can't tie that to my personal white hat stuff by name. (or substitute anyone else for google, same idea).

    Here's what I've found, I'd love to hear comments. (For the record, I have no connection with any company, URL, etc. that I list below. I'm transcribing from notes I took yesterday. If I mention someone, it's because I found them in my research. You should research on your own and make your own choices.)

    My Home State: Um, no. Expensive, I'd be public record, annual fees and reports, etc. A non starter. It's not as bad as, say, California, but it's bad enough.

    Nevada: Nevada used to be the king of anonymous or pseudonymous corporations. Nominee directors keep your name off the public record, but that service is expensive for someone bootstrapping a black hat enterprise.

    From what I've read Nevada's status as a privacy haven has crumbled away to just about nothing. The Nevada corporation mills don't mention that 30 days after you form an LLC or corp the state will require you to file for a business license at $100, and that with that application, and every year afterwards, you have to list the OWNERS, not the directors, including owner's name, SSN, address and percentage of ownership.

    Nevada, it seems, is dead. Unless I'm grossly misreading the laws.

    Wyoming: Wyoming wrote the first LLC law in the US back in 1977. They consistently rank as the #1 corporate environment.

    Wyoming allows Anonymity in the form of nominee directors and managers, keeping shareholders off the public record. (Though, again, you've got to pay someone a fee to be your nominee director.)

    They share nothing with the IRS except on businesses that have a nexus in Wyoming. This is important, because Nevada shares NOTHING with the IRS, and NV LLCs have something of a stigma attached to them. The IRS isn't likely to be friendly in an audit, if it comes to it. Even when Wyoming does share with the IRS, they have no shareholder info on record TO share, so with nominee directors, the IRS is clueless as to ownership.

    They also are apparently pretty fast at setting things up, I've read places claiming a day or two.

    Because of all this, Wyoming looks to be head and shoulders above Nevada. It's cheaper, more private, and carries no Nevada stigma.

    New Mexico: NM looks to be the holy grail.

    Let's start with the fact that the serious privacy paranoiacs use NM LLCs to own assets like cars and houses. Go read "How to be Invisible" by JJ Luna, or read forums like thementalmilitia.com to see the people who have nominees open checking accounts for them. I actually enjoyed Luna's book. He makes some interesting points, and I implement a few of his ideas, but I am nowhere near as "invisible" as he and others recommend.

    Luna and others "don't recomment NM LLCs for doing business". This is misleading because they don't recommend ANY corporate structure for doing business. They suggest sole proprietorships under dba aliases, with ghost mailboxes and mail drops in the Canary Islands.

    Here's why I plan to set up an NM, LLC.

    1) Cheap. $50 state fees. Period. No other reporting fees.

    2) Perpetual. Can be set up to last forever.

    3) Is automatically "In good standing" unless you really try to screw things up. As long as you maintain a registered agent in NM, there is no way that a NM LLC can ever fall out of good standing, ever. Because...

    4) There is no annual reporting, and in turn, no annual fees. Ever.

    5) I got your privacy right here. NM LLC apps need three (and a half) things.
    (a) the name of the company and the address of the principal office
    (b) the name and address of the Registered Agent , and
    (c) the duration of the LLC, which can be limited or perpetual
    That's it. No directors, no shareholders, nothing but a name and address is public record.

    Oh, I said 3 and a half. What's also needed is the "Organizer" of the LLC. This is the signature and printed name of the person who is filing for the LLC, and the name itself shows up on the public record.

    I need to make some calls today and get some more information on the requirements of this person. Could I get a friend to agree to let me use their name? What's the risk of making one up? etc. Since it's just a name, and not an address or SSN or the like, I can't see how it would be verified.

    So what you've got is cheap, perpetual, no ongoing state fees, no ongoing state reporting, and as anonymous as it can get at that level. The only downside I can find is that they take 2-3 weeks to process.

    I've talked with a woman at freeregisteredagent.com (again, no interest, just a company I found) and verified that they can form the LLC and ship me the documents for $92, and this includes the first year of Registered agent service for free. It's $99 a year after that.

    The problem I'm having is that I can't get them to commit to what names appear where on the application, so that if I needed a nominee organizer I'd know which field to use that name.

    I am going to call them back in a bit to find out, after I call the NM Secretary of State's office to get more info.

    So that's the research I did yesterday, it looks like NM is a slam dunk. Combine that with a business address at a UPS Store or a real blackhat style mail drop and the public won't find you. EIN's, Bank Accounts and Taxes will certainly tie you to the corp, of course. I've actually signed up for earthclassmail.com as my business address, so they'll receive my mail, scan it, and send me an email telling me I can view it online.

    I'll report back when I find out more. At $92 I may end up buying one with a nominee organizer and then using that one as the organizer for each subsequent LLC.

    I'd love to hear comments and experiences from all.

    -W
     
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  2. Warbucks

    Warbucks Junior Member

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    For the record, I have just spoken to someone in the NM Secretary of State's office about the "Organizer", and talked at length to a guy at FreeRegisteredAgent about it.

    He tells me he's pretty sure that they sign as organizer. He's checking with the rest of the staff and will email me when he knows for certain. If that's true, $92 for an LLC as private as can be expected is fantastic.
     
  3. freqout

    freqout Regular Member

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    Or you could just offshore the business, New Zealand does it for 100 NZD and you can use aliases for the ownership details.
     
  4. Warbucks

    Warbucks Junior Member

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    A Corporation is a legal entity that has a very well specified structure. It is taxed on its own, and there are requirements in every state that specific actions take place, like board meetings, etc. I believe board meeting minutes must be filed with the state. It's how you want to structure if you plan on having a huge company that may go public.

    An LLC strips away most of the corporate structure. Basically it's an entity that has the same liability protection as a corporation (hence Limited Liability Company) but taxes can be passed through to the owner/owners and taxed as income at their tax bracket, similar to an S-Corporation or Sole Proprietorship.

    Unless you have a real reason to need a corp (and any incorporation site should have a "which do I need page" like this one http://mycorporation.intuit.com/help_me_choose/index.jsp ) the LLC is almost always the way to go.

    For us blackhat people who want to separate the LLC from our name in public records searches it looks like NM is the choice.
     
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  5. Warbucks

    Warbucks Junior Member

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    some quick googling didn't lead me to any information on that. The only place I found that did NZ incorporations was like 1850 euros.

    Got a link to a service/registered agent/mail forwarder?
     
  6. Warbucks

    Warbucks Junior Member

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    Just an update. I have just finished talking to both the NM Bureau people and several calls back and forth to the folks at FreeRegisteredAgent.

    Again, I have no ties to the company, they're just who I chose.

    I got a new mexico LLC with my name nowhere on it for $92, including the first year of Registered Agent service. It's $99 a year for RA service after that, or they'll match anyone that beats them.

    Their people were knowledgeable, though NM was obviously not their primary area, they sell lots of Nevada. They were friendly, and got back to me quickly.

    Rumor has it NM takes two weeks, so I'll report back when I have documents in hand.

    I'd call them highly recommended so far.
     
  7. beakman

    beakman Newbie

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    Thanks for the info. I've been wondering about the best anonymous solution recently as well. Same situation here, my regular stuff is home state organized, but I've had a few ideas I'd rather keep my name off.

    So what about your mail? I know official stuff automatically goes to your RA, but what about checks, etc.? Do you have a maildrop there, or does the RA provide maildrop?

    A cell phone with a NM number would be a nice addition. Total NM identity then.
     
  8. bindasj

    bindasj Junior Member

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    Awesome you just answered one of my primary questions. Basically I have an existing account at one place paying me and want to set up an LLC to work on doubling my payment, but spreading it out so that one account getting banned doesn't cause all my money to disappear.

    Do you know anything about setting up a bank account? My main questions are how easy is it to set up a bank account with an out of state llc. And also what name information would someone be able to find out about you if they knew about that bank account? I'm not really concerned about the government more just this company that will be paying me.
     
  9. bindasj

    bindasj Junior Member

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    Cancel my last question. What do you know about New Mexico LLC taxes? I've been having trouble finding any solid information on this. One of the big appeals for a NV LLC is the fact that the state has no income tax etc. But I am failing to see how that is something good since an LLC will pass-through the taxes to the individual and they're going to have to pay taxes in their home state. New Mexico isn't the greatest place for taxes, in fact I found some slightly bad info about their taxes, but I still can't find how that applies to the owner of an LLC.
     
  10. wohlfman

    wohlfman Newbie

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    Anyone know about Delaware LLCs?

    Delaware does not require director or officer names (corporations) or member/manager names (LLCs) to be listed in the formation documents, thereby providing a level of anonymity.
     
  11. Warbucks

    Warbucks Junior Member

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    bindasj, New Mexico has no income tax. They do require you to pay sales tax on "Business conducted in New Mexico". It would be up to an accountant to say whether adsense/affiliate/CPA type stuff will count since you have no way of knowing whether someone who clicks your link is in NM. If you were working with an affiliate net that was in NM, maybe that would change things.

    Wohlfman, To my knowledge Delaware and Nevada require at least one director listed, but you can use a nominee. Unfortunately, the nominee costs money.

    In NM you can form an LLC with no director or manager as public record, just the address and the "Organizer". They don't require any more, and don't require annual reports. Delaware and Nevada both charge yearly fees to file your annual report, with Nevada's requiring a list of every owner of the LLC, their SSN, Their contact info and the percentage they own. Delaware also requires the annual filing to list officers, if I'm not mistaken.

    $92 up front, $99 a year to my registered agent starting year two. As close to real anonymity as you can get without spending a ton of cash. I stopped looking afterwards.
     
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  12. eurgbp

    eurgbp Regular Member

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    thanks, good ideas you've got there
    so with NM LLC I can get EIN and go to the bank to setup business acc right?
     
  13. bindasj

    bindasj Junior Member

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    You gotta check on the bank, some banks won't let you create an account from out of state. But there seems to be at least a couple options online.
     
  14. Warbucks

    Warbucks Junior Member

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    If you use a national bank like Bank of America, you're fine. Many smaller banks and credit unions will help you too. But yes, with an LLC you get an EIN, which the federal government will tie to your SSN, as will your bank.

    The anonymity of an LLC stops at the money. Your bank, your accountant and your old Uncle Sammy will know who you are.
     
  15. Warbucks

    Warbucks Junior Member

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    Check with someone more experienced than me, that's for sure. I know that foreigners CAN own a NM LLC. I've read a few stories on all the sites I scoured for info about people who live in Vancouver and hop across into WA to do "business", which amounts to dropping packages and envelopes in US mailboxes, and picking up mail from a Mail Drop.

    How that affects US and CA taxes is anyone's guess. My advice to any USian would be to find a very capable accountant and don't try to cheat the taxes. That would go doubly so when you put a national border in between, with possibly needing accountants here and there.

    My goal for having a "private" LLC is to put a barrier between me and google. You can't easily receive funds in an anonymous way that wouldn't trigger some zealous prosecutor to scream Money Laundering, and anything that COULD would cost so much to set up that it wouldn't matter.
     
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  16. minute80

    minute80 Regular Member

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    Warbucks or anyone, can you recommend any cheap accounting service, preferably online, which would take care of that business for me?
     
  17. number101

    number101 Junior Member

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  18. nianain

    nianain Junior Member

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    This is constructive criticism ---

    If you live in the US and do all this within the US, you can still be found. I don't think a $99 registered agent is going to protect you against any state or federal inquiries. It really wouldn't be worth it for them. I would think faced with a court order, they would fold like a chinese menu.
     
  19. number101

    number101 Junior Member

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    Warbucks,

    I did a bit more digging and re-read your post. I figured out what I was looking for. I received some incorrect info. and mis-read a part of your post. Your information is 100% correct.

    Thanks

    101
     
  20. number101

    number101 Junior Member

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    Yep , no doubt about it. FRA.com would not be a strong firewall if confronted with a court order. No one would be if presented with a court order. But as far as public inquiries go, your identity is off the radar. Definitely worth the $99 (imho), and your liability is limited to a certain degree.