You may wish your ownership privacy to be involved in your business. This can be for a variety of reasons, including avoiding unfounded lawsuits. There is a possibility that a person who knows that you own your business last month filed a lawsuit. I believe that you can avoid the same fate if you can not find yours. There are many Internet establishment services that advertise certain privacy benefits such as asset protection by organizing business under certain state laws. Nevada and Wyoming states (and even New Mexico states, etc.) are usually sold as "privacy and asset protection shelter" by the state. In these states there is no need to disclose the identity of the members of the LLC managed by the shareholders or managers of the company in the required company file (public record). Normally, in these "privacy" states, we require that directors (sometimes only) and officers of the company or administrators of the LLC be disclosed in the articles of association (and the articles of incorporation) and all annual reports.
But there are many myths about privacy and asset protection. Many new entrepreneurs often seduce to believe what is equivalent to the wrong hype. I will try to dispel some of these myths. In short, privacy is not only to protect your own assets, it is beneficial. One of the biggest advantages of state privacy protection is that it helps to prevent serious litigation. It is a good thing to prevent an average Joe from searching public records to find a company that you may possess. It can save many fundamental arguments. Obviously it is beneficial if it takes time to figure out who the owner is. Plaintiffs need to spend more money and most lawsuits are simple games of pure economics. Thus, by privacy, potential plaintiffs can become very expensive to find your assets.
Assured protection assured through privacy of ownership is basically a myth. Specifically, it is a common question whether your business is always organized under Nevada state law or Wyoming state law, or if you use a nominee or bearer stock. The simple answer is that Nevada, Wyoming Province (and several other states) are offering privacy protection. However, it does not guarantee to protect your assets or avoid any kind of responsibility for your conduct.
Myth # 1: You can maintain complete privacy by organizing in Nevada or Wyoming State (or elsewhere).
Advantages stated in organizing under the Nevada state law or the Wyoming state law for privacy purposes include:
- Shareholder privacy is done by not requiring that name be part of a public company record. Nevada or Wyoming state, shareholders or members of LLC need not be disclosed in the company's submission, only the directors, officers and administrators of LLC need to be disclosed.
- Allow use of nominated shareholders, corporate directors and officers and nomination committee members and LLC management team.
- Nevada State and Wyoming State do not share their data with the Internal Revenue Service (IRS) and are one of the states that have not made a sharing agreement with IRS (IRS "Information Sharing Agreement" exists in 33 states) . However, because Nevada does not share information with the IRS, your information is not kept secret. In order to acquire the EIN, it is necessary to provide the IRS with the name of the person responsible for all the tax matters concerning the company and the social security number. In addition, the company will need to prepare tax returns (S-Corp and most LLC information returns) to which the owner's name and social security number are provided. Therefore IRS will eventually end regardless of this information.
However, there is the possibility of losing this privacy in various forms. The business owner needs to clarify the identity in the following cases. 1) Registration to do business at home. 2) Issued shares. 3) Acquire the necessary business license (Nevada state is required for most activities and requests additional fee for obtaining). 4) Open a bank account. 5) Be an employee or an independent contractor to a corporation or LLC. Or 6) sign a contract or contract to sign individuals, such as receiving a loan. In Nevada state, company taxpayer number and personal guarantee are necessary. It is not meaningful for Nevada or Wyoming to organize ordinary business to take advantage of privacy for these reasons.
Also, you may have to guarantee your debts personally on behalf of your business and you may enter into a contract for business. This means that you provide your name and signature for a specific document. Also, when acquiring FEIN in your business you need to provide the person designated as IRS with Social Security number as the responsible party of the tax matter. These are all possible ways to distinguish your identity. The average owner of the Internet business is trying to operate his own business and there is no way to actually avoid these things.
Of course, these concerns may not apply if you are not playing an active role in the operation of the business or signing such a contract or warranty. Also, candidate (Discussed in detail below), or even inventory companies, you generally can avoid disclosing your identity in public (corporate) records. Some inventory companies can even purchase with established bank accounts submitted to internal revenue services, credit history and tax returns.
Myth # 2: Protect assets only with privacy
Privacy given to people organized in Nevada, Wyoming or other states with similar privacy features simply does not protect your interests to corporations or LLCs from your creditors. For example, according to Nevada Civil Code NRS 21.080, the real and personal property of a judgment debtor (not exempted by law) is responsible for enforcement including "shares and interests of all corporate or company". If the creditors ruled against you, the interest in the Nevada State or Wyoming state corporation / LLC will be subject to attachment to meet the obligation. You can prove yourself by ignoring the testimony related to the asset (or refusing to answer the question after it appears) and the trial order subject to the court's trial, or lying about the amount of the asset I will. Obviously the choice is not attractive, why does not the announcement of privacy protect your own assets? Do not be fooled by websites that otherwise tell you.
Myth # 3: Using a candidate is a bullet proof strategy
Many online services promote the use of candidates as bullet proof methods for privacy protection and asset protection. For example, the laws of Nevada and Wyoming permit the use of wanted directors, officers and LLC managers, as well as candidate shareholders and members. This theory is that you can hide your identity as owner and executive officer or manager using a third party. You can then manage entities or LLCs using proxies or other equipment to dominate entities. You generally need to avoid using candidates in this "bullet defense strategy" or at least understand that there are holes.
You gain several layers of privacy from having nominee officers, shareholders, directors, etc, but this privacy is like subpoena sent to candidates and provide contact information of the company owner It will be lost if asked. Nominee is legally required to provide this information and your privacy will be lost. The Nevada Civil Procedure Code clarifies that not complying with the subpoena will be punished in advance for sins. The law has no room for discretion unless the records to be disclosed have privileges. I think it is difficult to find a candidate trying to spend time in jail because of the small fee you pay for the service.
However, some of the services there are the use of attorneys who act between you and the establishment service. The lawyer can call attorney - customer privileges and you can add a layer of privacy at any time if you have questions about your identity. There is no such privilege directly to the creator of the establishment service. However, in some cases, courts may order a lawyer to identify your identity in case of fraud or criminal activity. This practice presents some measure of privacy.
Myth # 4: Using bearer sharing to provide asset protection
There are many asset protection and union websites declaring the use of bearer shares in Nevada etc. and so on. Nevertheless, the bearer sharing strategy does not prevent creditors from collecting your shares if judgment is given to you. There are many holes in using bearer stock as a way to preserve privacy and protect assets. This "strategy" not only creates all kinds of fraudulent transfer problems at first, but also produces the effect of possible income and / or donation tax. Needless to say, you do not need to go into more detail You should avoid it We declare the use of bearer shares as an asset protection measure on the service / website. Also, for most SMEs, the most negative aspect of bearer shares is that S elections can not be made due to restrictions on the number and types of shareholders. Bearer stocks are not allowed in most states.
Actually understand privacy
If you feel privacy strongly, at least on the surface you need to understand what this really means. Privacy is in fact related specifically to the annual reporting requirements of the country's first corporate report. If you are really concerned, you can use a state that does not allow disclosure for the first or annual submission of a manager or LLC or shareholder member, such as Nevada State or Wyoming State I will. Nevada's privacy protection will be protected from disclosing about members and shareholders' corporate filings, but this privacy does not apply to certain officers, directors, LLCs. In Nevada, organizers or organizers are required to appoint at least one first director to a corporate article or, in the case of LLC, to appoint at least one member or administrator in an organization's article is. In either case, the article is a public record, anyone can request a copy by paying a small fee.
Nevada, like other states, requires every year to submit "an annual list of officers and directors" to all legal entities and LLCs. This requires disclosure of the full name of at least a part of the officers and directors of the company and the administrator of the LLC. This information is posted on the website of Secretary of State Nevada. This is a searchable public database, so you can easily grasp who is operating a company or LLC. In most states, you can designate an LLC manager to name a company director and only include that person's information in the organization's document.
However, depending on state law, shareholder or LLC members must be listed in the annual report. This is a place you may encounter privacy concerns if you are concerned. Regardless of state law, small ongoing business is very difficult to maintain the privacy of all owners. It is also administrative and financial disclosure to establish and maintain a corporation or LLC in another jurisdictional area. The fees you paid for the state and these candidate type services will be added in a hurry. But privacy is still a consideration to avoid frivolous lawsuits, as I mentioned. It only understands the limits and myths.
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