How to Form an Arizona LLC without Disclosing Its Ultimate Owner(s)
By Richard Keyt, an Arizona LLC attorney who has formed 6,700+ 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 29-632.A provides that:
- If the LLC is member managed (the type of management is specified in every LLC’s Articles of Organization), the names and addresses EVERY member must be stated in the Articles of Organization.
- If the LLC is manager managed, the names and addresses of all managers and ONLY those members who own 20% or more of the company must be stated in the Articles of Organization.
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 29-632.A) 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 ARS Section 29-657. Liability for false statement in articles. See also ARS Section 13-2407, which states: “A person commits tampering with a public record if, with the intent to defraud or deceive, such person knowingly: . . . files . . . in a governmental office or agency a written statement which has been falsely made, completed or altered or in which a false entry has been made or which contains a false statement or false information . . . . Tampering with a public record is a class 6 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 trusts 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 known place of business in Arizona and the address of the member 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.
If You Do Not Have a Trust, Hire Me to Prepare a Confidential Trust
If you want to form an Arizona LLC and avoid having your name in the LLC’s Articles of Organization and you do not have a trust, I can prepare a trust for you for:
My Confidential Trust is an Arizona 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 were to die, the trustee is directed to assign the membership interest to estate of the beneficiary and terminate the trust. Caution: This trust is not intended to be a substitute for an estate planning trust that avoids probate and disposes of assets after death to designated heirs or alternate heirs.
- 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 formation package for $997, which is a $100 savings from the total price is you purchased a Silver LLC package ($597), a Confidential Trust ($497). 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, simply amend the name of the trust to something that does not disclose your name. After you amend the trust, you can then form the new Arizona LLC with the trust named as the member in the Articles of Organization. Make the LLC a member managed LLC to avoid having to name a manager in the Articles of Organization, which would be required in the LLC were a manager managed LLC.
I charge $195 to prepare an amendment to an existing trust for the sole purpose of changing its name. Call me and I can gather the information needed to amend your trust.