Everyone knows that a Limited Liability Company can help shield its owner(s) from liability, but did you realize that an LLC can also shield its owner(s) from prying eyes?
LLCs are among the most useful and versatile tools in a business lawyer's toolkit, and one of the lesser-known uses of a limited liability company is to facilitate privacy for its owner(s). In many states, including North Carolina, an LLC can be formed by an "organizer" (usually an attorney) without the signature or public disclosure of the name of the owner(s) or even the manager(s). In North Carolina, the manager's name is not required to be disclosed until the first Annual Report is filed. (Annual Reports become immediately public upon filing, and can be accessed for free online by anyone.) An Annual Report is due on April 15 on the year following the year the LLC is formed. Therefore, an LLC formed in January may have as many as 15 months before a manager must be named on an Annual Report.
Furthermore, a single member LLC can be disregarded for tax purposes,
thereby creating no additional tax complications for the owner.
Because an LLC can be formed quickly, easily, and inexpensively, it can be a useful took for preserving privacy.
We have formed LLCs to allow people to buy and sell real estate when the circumstances were such that the person's identity, if disclosed, would affect the price or otherwise cause issues.
There are a host of perfectly legitimate reasons to use an LLC for privacy purposes.
Trusts can also be used to create privacy, although they tend to be more expensive to create and slightly more complex. Trusts may be a good solution for longer-term privacy needs, whereas LLCs can address short term privacy concerns.
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