How to Form an Arizona LLC without Disclosing Its Ultimate Owner(s)
By Richard Keyt, an Arizona LLC attorney who has formed 8,800+ Arizona LLCs.
Arizona limited liability company law requires that the names and addresses of all of the members of the LLC must be disclosed in the Articles of Organization filed with the Arizona Corporation Commission. This information is published on the ACC’s website and is public information. Arizona Revised Statutes Section 29-3201.B.4 provides that:
(a) if the company is a manager-managed limited liability company, the name and address of each manager and the name and address of each member who owns a twenty percent or greater interest in the capital or profits of the company.
(b) if the company is a member-managed limited liability company, the name and address of each member of the company.
The names and addresses of members and managers of an Arizona LLC will be displayed on the Arizona Corporation Commission’s website and easily available to anybody who looks up the LLC’s name or the name of a member in the ACC’s online database.
Often people contact me and ask how they can form and own an Arizona LLC that does not disclose their names as an owner. My answers to that question are:
- The ILLEGAL WAY. You can commit fraud and intentionally file Articles of Organization with the ACC that does not disclose the true owner(s) of the LLC despite the Arizona law (Section 29-3201.B.4) that requires that the name(s) and address(es) be disclosed. Of course I do not recommend that anybody take this approach. I urge people not to do this because it is illegal and a felony under Arizona’s LLC statutes. See Arizona Revised Statutes Section 29-3502.D which states: “A person that signs a record, or causes another to sign it on the person’s behalf, knowing that the record contains inaccurate information at the time it is signed, is liable to the limited liability company and to each member of the company for damages resulting from the inaccurate information.” ARS Section 13-2702 states: “A person commits perjury by making either: 1. A false sworn statement in regard to a material issue, believing it to be false. 2. A false unsworn declaration, certificate, verification or statement in regard to a material issue that the person subscribes as true under penalty of perjury, believing it to be false. Perjury is a class 4 felony.”
- The HARD & EXPENSIVE WAY. Form two Delaware LLCs, the second of which will register to do business in Arizona. This does not involve forming an AZ LLC, but it accomplishes the same thing – creating an LLC that is authorized to do business in Arizona.
Delaware LLC law does not require that the name or address of any member or manager be in the Articles of Organization filed with the Delaware Secretary of State to form the LLC. The only information required in the Articles of Organization of a Delaware LLC is the name of the LLC and the name and address of the LLC’s registered agent in Delaware.
LLC #1, the parent company, is owned by the ultimate owner. LLC #2, the subsidiary company, is owned solely by LLC #1. LLC #2 then registers to do business in Arizona, which registration requires that LLC #2 disclose in its Application for Registration filed with the ACC who owns LLC #2. Because LLC #2 is owned by LLC #1, the name of the ultimate owner does not appear in the records of the ACC as having any involvement with LLC #2 or #1.
Note: The person who signs as the manager of LLC #1 will have his or her signature on any documents filed with the ACC on behalf of LLC #2. To avoid having the ultimate owner sign his or her name as a member or manager of LLC #1, someone other than the ultimate owner should be the manager of LLC #1. This is a very expensive solution because it is expensive to form and maintain two Delaware LLCs plus there is a high cost to register LLC #2 to do business in Arizona.
- The EASIEST WAY – the TRUST OWNERSHIP WAY. A simple solution if done right is to have your revocable living trust own your interest in the Arizona LLC. If a trust owns an interest in the LLC, the trust can be can be listed in the Articles of Organization as a member under the name of the trust. For example, the XYZ Family Trust under Agreement dated July 4, 2010, can be listed as a member of an Arizona LLC in its Articles of Organization as “XYZ Family Trust.”
The names of the trustee(s) are not required to be listed in the AOO. If your trust has a name that does not disclose your identity, you can name your trust as a member of the Arizona LLC.
Note: If Homer & Marge Simpson want to avoid having their names in the AOO of an Arizona LLC, they will not be successful if their revocable living trust is called the Homer & Marge Simpson Trust because if their trust is a member of an Arizona LLC, it will be listed in the Articles of Organization as a member under the name “Homer & Marge Simpson Trust,” which discloses their identities.
Address of Member & LLC Place of Business Caveat
Arizona law requires that the LLC’s principal address and the address of the members be stated in the Articles of Organization. If confidentiality is your goal, you probably do not want to list your home, business or other address in the Articles of Organization because it could be an easy way for somebody to discover that you are associated with the LLC.
Solution: Get a new U.S. post office box or a UPS mailbox. If we form your LLC, you can use our address service for $100 a year, which allows the member and the company to use my law firm’s address in the Articles of Organization.
Buy Our Gold LLC If You Want to Keep Your Name & Address Off of the ACC’s Public Records
If you want to form an Arizona LLC and keep your name and address off of the public records of the Arizona Corporation Commission and you do not have a trust that does not have your name in its name, you need to buy my Gold LLC formation package for $1,297. The Gold LLC package includes a revocable living trust that is the owner of the LLC.
- $1,297 when I form a Gold LLC aka the confidential LLC.
- $497 if I do not form your LLC. See the Confidential Trust Questionnaire
My Confidential Trust is an Arizona living trust that has the following characteristics:
- It’s revocable – you can amend, revoke or terminate it at any time unless you die or become incapacitated.
- You are the beneficiary of the trust. If you are married and want joint ownership with your spouse, then both spouses will be beneficiaries.
- If you are married and both you and your spouse are beneficiaries, then if one spouse were to die, the other will continue as the sole beneficiary.
- If the sole beneficiary or both spouse who are beneficiaries were to die, the successor trustee is directed to assign the membership interest to the person or people you designate in the trust agreement.
- You will be the trustee. If you and your spouse are both beneficiaries, then both of you will be trustees.
- If both spouses are trustees and one were to die or become incapacitated, the other spouse would continue as the sole trustee.
- If the sole trustee were to die or become incapacitated, the person you designate as successor trustee will become the trustee.
- The trustee has the power to exercise all ownership rights as a member of the LLC, including, but not limited to, voting rights, the right to sell, encumber or dispose of the membership interest and the right to receive all distributions of money or property from the LLC.
- The trust will be a grantor trust for federal income tax purposes, which means: (i) the IRS treats the trust as if it does not exist, (ii) the trust does not need a federal employer ID number, (iii) the trust does not file federal or Arizona state income tax returns, and (iv) all profits and loses of the member of the LLC are passed on to the beneficiaries of the trust who report it on their IRS Form 1040.
How to Hire me to Form an LLC and Confidential Trust (Best Value)
Call me, Arizona LLC attorney Richard Keyt at 480-664-7478 if you have any questions about forming or operating your AZ LLC or creating a trust. I don’t charge for to answer these questions.
If you want me to prepare a Confidential Trust for you, the simplest and least expensive way is to to purchase my Gold LLC for $1,297. The first step to hiring us to prepare your LLC is to complete our online LLC Formation Questionnaire.
If your Gold LLC will have more than one owner who wants confidentiality, the additional owner(s) must purchase their own Confidential Trust for $297 for each additional member who wants confidentiality.
How to Hire Richard Keyt to Prepare a Confidential Trust
When you are ready to form your LLC select one of the following options:
- Click on this link to go to my Confidential Trust Questionnaire and complete our online form and pay in our secure web store. Pay for your Confidential Trust using our secure online order form with your major credit card.
- Call me at 480-664-7478 or my son LLC attorney and former CPA Richard C. Keyt at 480-664-7472 and give one of us your LLC, trust information and Visa, MasterCard, American Express or Discover Card information over the phone. It only takes 5 – 10 minutes.
If You Have a Trust with Your Name in the Trust’s Name
If you already have a revocable living trust, but your name is in the name of the trust you should buy my Gold LLC package and name your existing trust as the beneficiary of the new confidential trust. This would cause the assets in the confidential trust to go to your estate planning trust if you and/or your spouse were to die.
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