So many LLCs

December 8, 2018 8:00 AM

When I moved into our current place about 2 ½ years ago I received some mail to the previous tenant. Oh! I guess he ran a sub shop? Weird that he would send his business make to an apartment. And then more arrived. Another sub shop? With a very similar name? And another. And another. And another. Oh! And now a coffee shop. All LLCs registered to the same man, to the address of an apartment.

I received all manner of business mail. Credit card statements, tax documents, etc.

I complained to the Post Office, but I still periodically get a raft of business mail to what is clearly a residential address (a 15 story apartment building).

I've printed a stack of "Return to Sender" labels and I just slap on a label and put this mail back in the box...

But what is this? Why would one guy (and it's the same guy who registered these LLCs) need 10 shady sounding sub shops (and coffee shops, and real estate companies, and hot dog shops)

Is it a vast criminal conspiracy? A massive cover up? Aliens? Or is this man simply the most perseverant small business man ever?

posted by device55 to Law & Government (9 answers total)

Best answer: There is a theory that by having each of your businesses be separate LLCs, you can reduce liabilities if there is a claim filed against one of them. I have frequently dealt with companies operating as 8-10 LLCs, so this is less unusual than it seems on the surface, other than not updating his address.
posted by Nimmie Amee at 8:04 AM on December 8, 2018 [8 favorites]

Response by poster: That sounds...complicated. Thanks!
posted by device55 at 8:21 AM on December 8, 2018

Not sure about WA but on CA you can contact the Secretary of State and tell them that the address of record is incorrect, and ask them to remove your address from the record.

Sometimes interested 3rd parties who have sent mail and had it returned (from his business address let's say) will go to the Sec of Dtate website to look up the current address of record and re-send the mail. That might be what's happening here.

Sometimes there will be a different name and address for the agent of record (the party filing the legal ppwk for the LLC). You might jave some luck forwarding the bad mail to the agent's office.
posted by vignettist at 8:28 AM on December 8, 2018 [3 favorites]

Best answer: To get back to the point of your question - I work with public records often; sometimes there are genuine clerical errors wrt to addresses and such, but in a case like this it could also be someone who is attempting to avoid legal service in the chance that something happens (for example, a slip-and-fall), or someone who is trying to avoid paying taxes.

For example, if a taxing authority sends a tax bill to the wrong address and the person never receives it, they can make a case later on down the line (if they get caught/found) that they never received the bill so they are not liable. Smaller jurisdictions might forgive the debt altogether as it might not be financially worth it to pursue the debt.

And then the LLC might get dissolved and the business "sold" or just reopened under another legal name (I see this A LOT) and then the taxing authority has to make a case that the new owner is technically the same as the old owner; that takes more time and effort to prove and again depending on the dollar value may not get pursued, or if it does the business has changed ownership again and takes longer to pursue.

It's a numbers game that some shady business owners play.
posted by vignettist at 8:44 AM on December 8, 2018 [4 favorites]

Response by poster: It often seems like shady behavior takes way more effort than above-board behavior - but maybe that's because they're no good at it (and that's probably a different AskMe anyway)

Thanks for your insight!
posted by device55 at 10:09 AM on December 8, 2018 [1 favorite]

Seconding what vignettist said, contact your secretary of state and get your address removed. This sounds like someone attempting to avoid service of process.

Write the secretary of state a letter saying that you are the only occupant at that address, it is a residential address, there is no business activity occurring there, and you are requesting that your address be removed from their records in its entirety. If you have a list of all the LLCs you've gotten mail for, include it for them.
posted by zdravo at 12:23 PM on December 8, 2018 [2 favorites]

If he did in fact own several separate storefront businesses, operating each under a separate LLC is entirely legitimate and indeed preferred practice for liability limitation purposes, which is of course the goal of a limited liability company. But if separate LLCs were organized and there are no real businesses, something nefarious could well be going on.
posted by megatherium at 4:40 PM on December 8, 2018 [1 favorite]

For the record, (IANAL but) I do agree that it is common practice to open separate LLC's for each location that a business/investor owns. It's the filing the ppwk under an incorrect mailing address that is a bit shady. It's not notable if it happens for one business. It ventures into shady territory if there are consistently mistakes for several businesses under the same owner/investor.
posted by vignettist at 8:51 PM on December 8, 2018 [1 favorite]

Along the same lines as the secretary of state option, the state department of labor may have an audits department or some other kind of way to report sketchy stuff to someone who can go into their records and check on things. This is particularly relevant for any possible employees of this person, but may also help with your mail issue if this person is in fact doing something not entirely above-board.
posted by Urban Winter at 7:50 AM on December 9, 2018 [1 favorite]