Nevada LLC and anonymity ?

[Manas M.]

Hi All,

I have been researching a holding structure for my rentals for past few weeks. Primary reasons are of course, asset protection and anonymity (to the extent possible).

I talked with folks at a Nevada company and they recommend forming an LLC in Nevada and registering in the states where the property are located. The reason cited is strong Nevada laws which help protect owners privacy.

My question is since the LLC is also registered in other states, doesn't that leave the door wide open for anyone interested to get the owners information from those states?

I understand Nevada LLC can be beneficial for other reasons but the privacy argument doesn't seem to hold to me.

Thanks
 

[Casey Powers]

I used to be a Nevada registered agent. Nevada LLCs aren't cheap and they have changed the rules in recent years. You would have to pay to maintain the Nevada LLC plus the cost of registering the LLC to do business in the other state(s). You can accomplish simple privacy in all or most states by simply having a trust own your LLC in the same state where you own rentals. You can be the sole grantor and trustee of the trust (meaning you own the trust). You sign all documents to purchase the real estate as the Trustee of the Trust which owns the LLC. Then use a private mailbox company in the same state for the LLC's address. Then most people trying to find who owns your rentals, will find your LLC, the name of the Trust, and the mailbox address on the publicly searchable records.

Banking rules require the banks to know who actually owns the LLC. If you register a Nevada LLC for privacy, you have to use a Manager-managed type, so your "manager" would be on the public record and not you. When you go to open a bank account, some banks will not allow it because you aren't listed on the LLC record. 

To me it's easier to just set up a trust, make it the owner of your LLC in the state where you buy rentals, and open a business bank account in the same state for the LLC. Run all the rental money through that business account.

Ask a tax professional for tax advice on LLCs, and ask a legal professional for proper legal advice on how to structure it in the easiest way for you to maintain. Where people screw up with this stuff is trying to set up entities they don't really understand and then not knowing what's required to properly maintain them. Simple is best for most of us.