LLC Setup for REI biz

[Janea L.]

I have an LLC but I registered through my state so my name is associated with it. I have been listening to talks on how to setup an LLC to mitigate any legal ramifications in the case that you are sued. The suggestion I have heard is to get the LLC setup by a professional so that as the business owner you can have anonymity. Any thoughts on this? Is this the right way to go about setting up an LLC for an REI business?

[Jason Marino]

Hi Janea,

I agree with the reply to post above. Once a lawsuit is started, the anonymity provided by an anonymous LLC will be removed. Despite this, there is still a benefit to having an anonymous LLC. An anonymous LLC can be useful in deterring a lawsuit before it is started. It is not uncommon in a situation involving a contingency lawsuit for the attorney or the firm who is covering the cost of the lawsuit to research the Defendant before filing the lawsuit. If your name is associated with your LLC or another limited liability entity, this research is much faster and makes it easier to determine whether the LLC and its Member or Members are good targets for a judgment if the corporate veil can be pierced. If an LLC is anonymous, this likely demonstrates that the entity was set up by an attorney and additionally can make the LLC look less like a good target because of the lack of a connection to a Member that is searchable.