purpose of this page is to cover why someone may prefer
not to list themselves on the public record for
the company they own, or control. We also cover the nominee EIN
and signers on accounts.
ISSUES, CHALLENGES AND PROBLEMS OF A NOMINEE OFFICER/CORPORATE OFFICER
SERVICE FOR YOUR WYOMING CORPORATION OR WYOMING LLC
1. Prevent identity theft.
Protect your credit and company identity against theft.
The Secretary of State, in every State, doesn't require ID before they
file a document as it applies to the company. This means you're at
risk for someone pretending to be you. This justifies your use of
our corporate officer services to protect your business interests.
2. Discourage people from having an incentive to sue you.
If assets have your name on them, then you're painting a bulls eye
on your forehead. In other words, you're asking for trouble
when key assets are attached to your name.
3. Reduce exposure to the abuses associated with public records.
4. Enjoy increased flexibility in acquiring assets and business interests
without others gossiping about you. It prevents personalities from
creating conflicts. For example, Disney obtained land using
nominees, who were attorneys, and a group of corporations.
This is so the local landowners wouldn't know what he had in mind
to build a theme park. This kept land prices low and prevented
speculators from competing against him for the same land. You can do the same in
your own business world.
1. It's difficult to obtain
corporate credit. Lenders want to see you associated with the
company through the public record. When this doesn't happen, they
tend to refuse credit lines; as do those who lease equipment and other
sources of credit.
2. Obtaining loans and using company
assets as collateral are problematic.
3. You're in an asset building stage
in your life, and protecting assets is not a high priority. You
must first have something to protect. This means privacy works
against your short term interests in accessing capital.
4. These disadvantages highlight
the issue of why transparency is important to obtain corporate credit.
If you don't have much to take, and you're starting up the business,
then focus on limited liability by using a company. If you have an
asset base, a corporate officer service is often advantage with a solid
estate plan, and qualified legal and tax advice.
5. Even if a nominee
officer/contract officer is an advantage, the privacy is superficial.
One subpoena will release your name and other information to a court of
competent jurisdiction. Protection from the abuses of the public
record is only skin deep.
Our corporate officer
service is $200 per year. We don't provide signers for bank
accounts or Employer Identification Numbers.
There's no tax advantage to using a shelf company with a nominee officer service.
HOW TO USE NOMINEE OFFICER/CONTRACT
OFFICER SERVICES FOR
YOUR WYOMING CORPORATION OR WYOMING LLC:
- Everything must be normal, and part of doing
daily business, even if the privacy is unveiled.
The contract officer will not and cannot hide you from
lie. You can't say the company isn't yours when it is.
You can't commit perjury. One well placed subpoena
discover the whole arrangement. Don't be shady or
slimy. Don't evade taxes.
such a service? Your
protection is the limited liability and the charging order
protection (LLC). Privacy only shields you from
identity thieves and takes the target off your back for a
short time. The nominee officer/contract officer also
helps you reinforce the corporate veil by preparing and
signing the resolutions, bylaws and operating agreement.
In this way the company is considered separate from yourself
and the corporate veil is protected. This is the key
advantage to such a service.
EIN's, BANKING AND THE SIGNER ON THE COMPANY BANK ACCOUNT:
What about a nominee EIN?
Nominee EIN's are worthless and often lead to unnecessary
trouble. The intended signer on
the bank account should apply for the EIN, whether it's you or
your bookkeeper. In this way, the bookkeeper is cognizant
that the EIN was obtained properly and correctly.
Although there are
providers who sell the idea of a nominee EIN, it's risky because of the following issues:
increased privacy and convenience, it's also
normal and typical for a bookkeeper or accountant to sign on the
account. The privacy is from the general public.
There is no privacy from the IRS. The bookkeeper
customarily has a copy of your name, DOB, SSN and a photocopy of
your driver's license.
This person, who serves as the signer on the account, should be
listed as a Treasurer, or Assistant Treasurer, for the company,
either through resolution, or on the public record.
Bookkeepers usually charge about $100 a month, or less, for this
Many business owners don't need this service. Rather, you
can sign on the account and the Treasurer function is filled by
the owner of the company. The corporate officer simply fills a function as far as the public
record is concerned, and possibly more. The Treasurer may
or may not sign on the bank account.
The signer on the account should apply for the EIN.
Here are the issues:
What about the bank?
don't need to bank in Wyoming if you have a Wyoming corporation
or Wyoming LLC. The same applies if you have a Nevada
corporation or Nevada LLC--you don't need a bank account in
Nevada. Incorporators like to make you pay for more
services than you need. Internet banks such as
Everbank.com, FirstIB.com, BankofAmerica.com, and Etrade.com
allow you to set up the account online, operate online, check
balances, etc., without hassle or interruption. Gone are
the days you need a bank account in the same state the company
is operating, even in Wyoming.
- Those who sell nominee EIN's use the same SSN to apply
for hundred's of EIN's. This red flags the SSN used
and the EIN's obtained. Do you want to be one of
hundreds or thousands of EIN's obtained for your business
using the same SSN? No. A person who you don't know? Not
a good idea.
A person who may not have paid taxes? Bad idea. A person who may
even be a criminal? Nope, no thanks. Sounds risky, am I right?
This perhaps places you at increased risk for an audit,
which will costs you professional fees. It's
not a good idea to buy a "nominee EIN." Don't do it.
Nominee EIN's don't help at all. In fact, it causes
- The nominee EIN's are sold and promoted by people who
sell privacy on the internet. These services are ill
advised. This creates a high
profile. Do you want to be high profile when obtaining
a little privacy? No. That doesn't make sense, am I right? The
same applies for the signer on the bank accounts.
Don't buy any "banking privacy" or "nominee signer" service
from providers on the internet. Rather, obtain a local
bookkeeper and ask that person to apply for the EIN, or sign
on your account. If the bookkeeper applies for the EIN
as a third party, you are identified to the IRS on the SS4
form (application for EIN). The bookkeeper simply
applies for the EIN as a third party and this may make the
process easier for you. The focus is to ease
operations and to streamline your business. This will
free you up for increased sales and responsible management
of the business.
- The bookkeeper helps you keep
the accurate numbers to prepare the income tax return and pay all
taxes, as you must.
- How do you approach the bookkeeper for this service?
It's simple...tell the truth. You're busy and you
don't have time to handle these tasks. You need
someone to trust with the numbers and the details of running
the business. The bookkeeper will help you declare
proper deductions and be truthful in all matters.
Focus your time or marketing and building the business as
your local bookkeeper keeps you on track and organized.
The privacy is a small plus. Organization is key.
The role of the bookkeeper is to keep you organized so you
can sell your product or service. The bookkeeper's
role is to assist you in compliance. He or she will
reduce your stress level and keep things humming along.
Remember that one subpoena to the signer on the account,
if a bookkeeper or accountant, will disclose your interest
and involvement with the company. Therefore, don't be
overconfident and don't be dishonest in any of your affairs.
Privacy offers convenience and limited security. It
doesn't protect you against dishonest conduct.
As you can see, privacy doesn't help you when building
corporate credit. If anything, it backfires. Bankers
want to know who is behind the company. When you're the
corporate officer or manager, the business is in your name,
you're the signer on the account, you're the contact for the
post office and the IRS, this makes bankers feel better about
you. It signals commitment, transparency and clarity.
When you obtain another person to serve as corporate officer on
your behalf, it seems uncertain, unclear and possibly messy.
And now with the banking crisis, the lenders are nervous and
agitated. If you need credit, don't use a nominee for
If you have assets to protect, please see an attorney and a
qualified tax advisor before you do anything.
Privacy is not asset protection.
When you open the bank account, the bank requires name,
address, SSN, DOB and photocopy of picture ID. The
bank reports this information to the US Treasury. IRS
is the collection arm to the US Treasury. So, the
signer on the account should be the applicant for the EIN.
This means if you're the signer on the account, you should
apply for the EIN. If your bookkeeper is the signer on
the account, the bookkeeper should apply for the EIN.
Banks like consistency. If anything goes wrong with
the account or the bookkeeper, the bank should be cognizant
that you are the person in control. This also sets the
bookkeeper at ease that you are properly identified as the
bank and the IRS are concerned.
If you obtain a signer on the account, such as a bookkeeper,
then it's easier to prepare the tax return.
The financial numbers are prepared well in advance to meet
the necessary deadlines.
- Be truthful on the tax return and pay all taxes in full.
- Obtain qualified tax advice. See a lawyer if
- If you file for bankruptcy, you must report your
interest in the company that you own.
If you lie, you go to jail.
SHELF COMPANIES . BUILD CORPORATE
CREDIT . TRANSPARENCY
109 East 17th
Street, Suite 25, Cheyenne WY 82001
Office 307.237.2580, Fax 702.920.8824,
All Rights Reserved