How Do I Stay Anonymous and Sign Contracts?
You went to all the trouble to form your company as an Anonymous LLC, but now you are concerned. How can you possibly remain anonymous and execute a contract?
Remember that “anonymous” means that ownership information for Anonymous LLC’s is not disclosed at the state level with your LLC filing. This does not mean you are “anonymous” from the IRS, banks or certain vendors that demand or require ownership information (i.e. leases, merchant account companies, etc).
So, if your LLC does need to enter into contracts with others, what should you do to maximize anonymity? Follow these guidelines:
- Make sure your LLC, not you personally, is a named party to all contracts.
- Your name and title can be “Authorized Representative”. If your title is already “President,” then put your name down as “Authorized Representative.”
- If your business has officers or other high-level managers, their signatures can bind the LLC and can therefore be used on contracts.
- If a vendor demands your personal name or to know all the owners, make sure (i) the contract you’re signing contains a confidentiality clause binding on the third-party, and (ii) make sure the party you’re disclosing your personal information is trustworthy to verify their ability to not disclose your information.
- Avoid vendors that require disclosure. Before finalizing a relationship, make sure you have several options in your back-pocket.
- Finally, if you are a vendor to others who needs to provide a W9, avoid taxing your LLC as a disregarded entity if you want to avoid disclosing your personal name on the W9. Instead, you want to tax your entity as a S-Corp or a C-Corp. For a parent/child setup, this can create challenges for the child operating entity. Consider a tax attorney consult to help you navigate these issues if you need help.
Note that we do provide third-party signing services, through a limited power of attorney (POA). In order to use this service, your company would form an attorney-client relationship with our law firm and the company would need to sign a specific document granting us authority to sign on behalf of the company for specific transactions. We will review any contracts you want to sign, work with you, and charge for our time.
BEWARE of organizations saying that can provide Nominee or “Independent Director” or other services. Almost in all instances — unless you know you’re dealing with a licensed attorney — such services will be at best wrong and at worst illegal.
At the end of the day, anonymity is only as good as the weakest link and it’s not absolute. Therefore, be cautious about disclosing such information, especially to employees and independent contractors who are closest to you.
Law 4 Small Business (L4SB). A little law now can save a lot later. A Slingshot, LLC, company.
Author: Larry Donahue
Larry Donahue is an attorney and founder of Law 4 Small Business, P.C. He is licensed to practice law in Illinois, New Mexico and the US Patent and Trademark Office.
