An anonymous LLC (limited liability company) is a type of business structure in which the public has no access to the owners’ identities. This means that the names of the members (owners) and managers (if any) of the LLC are not listed on records that are available to the public.   

Even though the members and managers are anonymous to the public, they are not anonymous to certain government agencies or to law enforcement. For example, the LLC’s tax returns filed with the IRS and other tax authorities list the names of its members. In addition, a new report that became mandatory this year for most LLCs, called a Business Ownership Information Report, discloses the names of most members and managers to the Financial Crimes Enforcement Network or FinCEN. [Update 4/5/2025:  After several confusing court decisions and reversals, the last word from FinCEN is that domestic LLCs and other entities will not be required to file Business Ownership Information Reports.  Only foreign entitles will be required to file.]

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Basic LLC Principles: Interest versus Membership

Understanding SEA 18 requires an understanding of the difference between LLC interest and membership.

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The owners of corporations are called shareholders and their ownership rights are embodied in shares of stock, a form of intangible personal property comprising a bundle of rights, some economic and some non-economic.  The principal economic right is the right to receive dividends (usually cash) from the corporation, and the principal non-economic right is the right to vote in an election of directors and other matters that may be submitted to a vote of the shareholders. Although there can be restrictions (typically set out in the company’s articles of incorporation or bylaws, or a contract among shareholders or between a shareholder and the corporation), stock is generally transferable from one person to another. A person who acquires stock (thus becoming a shareholder) receives both sets of rights, economic (dividends) and non-economic (voting). It makes no difference how the person acquires the stock –by purchase, by gift, by inheritance, as compensation to an employee, or by court order (in a divorce or otherwise); a person who owns stock holds both economic and non-economic rights.

Limited liability companies also have economic and non-economic rights.  The principal economic right is the right to receive distributions (usually cash) from the company, and the principal non-economic right is the right to participate in the management of the company’s business and affairs. A crucial distinction between LLCs and corporations is that the economic and non-economic rights associated with LLCs are not bundled together in a single package the way those rights in a corporation are bundled together in stock.

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