QUESTION

LLC Owner Liability

Asked on Feb 02nd, 2013 on Corporate Law - Nevada
More details to this question:
I want to create an LLC that cannot be "breached", to the point where the owner cannot be held liable if a person or entity decides to sue the LLC, and so any person or entity outside of the IRS cannot find out who the owner of the LLC is, even with a court order. I have read a few cases where lawsuits happened, and the owners of the LLC's were also named in the suits. I have heard that creating a double LLC may work, meaning having an LLC own another LLC, and having them based in places such as Nevada. I would like any input or tips from lawyers about this, to let me know what the best way would be to create an LLC such as this. Any help would be appreciated.
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2 ANSWERS

R. Christopher Reade
The question of creating a limited liability company that cannot be "breached" is a matter of proper formation, capitalization and operation.  Chapter 86 of the Nevada Revised Statutes provides liability protections for members of an LLC.  Generally no member or manager of any limited-liability company formed under the laws ofthe State of Nevada is individually liable for the debts or liabilities of the company. NRS 86.371.  A member of a limited-liability company is not a proper party to proceedings by or against the company, except where the object is to enforce the member's right against or liability to the company. NRS 86.381.  This latter statute allows members who are named to seek dismissal from the action. As far as identification of the owners of a limited liability company, there are some protections in that the annual corporate filings of a Manager-managed LLC only requires disclosure of management and not ownership.  While creating multiple layers of holding companies can create some degree of insulation from disclosure of details, you should understand that with additional layers of bureaucracy for creditors comes additional layers of bureaucracy for the entities and its management in being able to function. 
Answered on Feb 04th, 2013 at 8:37 PM

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Litigation Attorney serving Greenwich, CT
Partner at Hilary B. Miller
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You can create any number of layers of corporations, limited liability companies or other entities, but you can always be sued. The general rule in the US is that anyone can be sued for anything. If you are the operator of a thinly-capitalized entity or you use the entity as an incorporated pocketbook or otherwise to commit a tort, you can always be sued, and there is virtually no way to avoid this. You will not, for example, be able to keep the ultimate ownership from the IRS, nor will you be able to open a bank account without disclosing your identity.
Answered on Feb 02nd, 2013 at 3:21 PM

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