Can anyone tell me what specifically people are trying to “hide” by incorporating/forming an LLC in Nevada?
I ask, because I want to get your answers, and frankly chanllenge myself to see if any of the reasons “hold water”.
Im certainly not trying to mock anyone, its just that as a bill collector by trade, I think that if I want to find you, or what you own, (and of coarse if what you have is really worth finding), then Im gonna find it.
If not me, certainly the IRS has the power to do so (again if its worth it for them to find).
The theory is that NV doesn’t require entities to disclose their members/directors and don’t share information with the IRS, thus providing some level of anonymity.
In practice, NV DOES require member/manager disclosure, which I’m sure puts it into public record somewhere. Further, banks, credit cards, title companies, county clerks, virtually everyone shares information these days. True anonymity is difficult to achieve in the “real world”.
Lots of companies have developed clever ways to separate people from their money.
Consult an attorney or financial advisor! I am not an attorney, but I have been through these processes and write about them
In general:
Nevada LLC’s limit exposures to individuals by not disclosing the member names and by using a registered agent located in Nevada to recieve any actions or notices. Nevada LLC’s also do not share information with any agencies outside the state of Nevada, including the IRS. Information is however, still cross exchanged between many parties.
In general all LLC’s offer the same type of general liability protections as corporations while providing additional tax benefits that many corporations may not have available.
A new type of Nevada LLC, the Series LLC allows the single LLC to create multipe buckets for holding real estate that (if properly maintained) severs the liability connection between each property.
People who sue according to single property issues are therefore often unable to extend the liability to the other real estate properties held under the properly operated Series LLC. This type of LLC has yet to face major challenges through the courts.
Many investors also hold each property they own under an individual LLC for the same purpose in order to separate their liabilities by individual properties. This process is much more costly than the Series LLC.
Most court challenges related to actions against single property issues seek to prove that any multiple properties are in fact related and subject to the suit and that business operations and properties are not held severally.
Therefore the liability protections offered by LLC’s and other devices are only as good as the business practices of the property owner(s) and how well they maintain the separation that is so critical to how these limits on liabilities function.