Or good business sense, maybe? If you're in real estate and own a bunch of properties, you're going to have an LLC for each property, and maybe even one LLC for each state that owns the other ones. You could easily end up with a dozen LLCs for <10 properties in multiple states.

Maybe there's some similar avenue here.

Is there a non-sketchy reason why having multitudes of LLCs makes good business sense?

AFAIU, typical reason is to compartmentalize liabilities, but aren't you doing something sketchy if you have reasons to compartmentalize?

Hahaha definitely a red-flag if you ever work for a place that plays the LLC game. Wish my younger self knew that

Out of curiosity, did anything particularly bad happen due to working for a place playing this game? Asking for a friend..

Yea I got hired as a CTO for a startup in my late 20s and thought I had found my dream job. They offered to double my pay as a JR engineer which was a good amount of money for my age and was given 4% ownership that vested over 4 years. Well about 9 months in, the CEO decides the current business plan isn't viable and wanted to setup a competitor to his previous employer. He knew that this could very easily result in litigation from his former company as he was also the CEO there and started playing the LLC umbrella game and suddenly I'm getting paid by some company in Wyoming with a totally different name.

To comfort me, the CEO told me that they would go ahead and vest my 4% shares immediately for the new entity. The checks were still cashing and I didn't think much of it at the time. The company started making decent money about 1M annual revenue, but when profit sharing season came, I was not given anything but a 2k bonus. Then one day when nobody was in the office, I happened to see some documents on a desk that dissolved the company I supposedly owned 4% of and described a 3 tier ownership scheme (dreamt up by a creative lawyer on retainer)

There are many people that will prey on young talent, get them to build their startup infrastructure by promising them 250k+ salaries plus profit sharing. After you build the thing and server your use, be warry of the people suddenly wanting to "help" or "co-administer" the system. It's code for they are trying to learn how to run things without you because you are too expensive now that the system is online. Additionally, in more conventional contracts vesting options can cost you a lot financially if you don't calculate the taxes right.

In the end the CEO and VP got sued by both their former employer and the state of california. The CEO's wife then divorced him and took half of his money after he lost nearly 500k. Karma was a little mean in my opinion on that one haha

> Wyoming

For those reading along, States like Wyoming (and New Mexico IIRC) are attractive for these kind of LLC fillings b/c they don't have a public Company Databases.

That, and cheap taxes/fees.

This is going to start to change: https://news.ycombinator.com/item?id=25395278

> The legislation has limitations. The general public won’t have access to the ownership data, a disappointment to anti-corruption campaigners, who say public scrutiny would help combat criminal activity.

Looks like the data will only be available at the Federal level and not open to the public.

> In another transparency setback, the law also exempts some entities from the disclosure requirements, including domestic investment funds that are advised and operated by a registered investment adviser.

Sounds like the practice of using Registered Agents will still be allowed to continue.

So it's a new law that will change how the Feds can access and prosecute organized crime, which is a good thing, but won't help much in allowing us to learn who really owns that new shinny LLC.

What an incredible ending. Glad it worked out for you in the end.

It’s also how Enron found so many buyers for its energy contracts ;)