Can I use a separate LLC to own my business intellectual property?

Sure, people do it all the time. But privacy? The holding LLC still needs a registered agent and a formation state. If you use your home address or your name as organizer, You've just moved the exposure. The IP itself might be harder to trace, but the LLC isn't invisible.

This is basically a standard IP holding company structure. Licensing back to the opco is fine as long as it's a real arm's-length license with actual payments. Otherwise the IRS may treat it as a sham and pierce it ngl.

lol @ "pierce it" — you make it sound like a bad piercing. But yeah, transfer pricing rules apply even for single-member LLCs if you're doing S-corp elections. Talk to a CPA, not just a forum.

I have a separate IP LLC for my design studio. It works, but the annual franchise tax in California alone makes me question my ljfe choices. What state are you in? That matters a lot.

Wyoming is fine for privacy on the formation docs, but you'll still need a registered agent there. And if you're the manager, your name might show up in the annual report unless you use a nominee service. Those get pricey

Nominee services are a whole other rabbit hole. Some banks won't touch them. Make sure your opco bank doesn't freak out when the IP LLC licenses stuff to it.

Also, if you're assigning existing IP to the new LLC, that's a transfer. You need a proper assignment document with consideration. Otherwise, if you ever get sued, a judge might say the IP still belongs to you personally.

Or worse, the opco's creditors could argue the transfer was fraudulent conveyance if you did it after things went south. Timing is everything.

What's the actual privacy win here? If someone sues the opco, they can subpoena the license agreement and find the IP LLC. Then they subpoena the IP LLC's records. You're not hiding the assets, just adding a layer.

That's true for the trademark itself. But the assignment from you to the LLC is also recorded. You can sometimes file an assignment without the qssignor's personal name, but it's tricky. The USPTO has specific rules.

Honestly, for a one-person consultancy, I'd just use a DBA and a PO box. Way less paperwork. The separate LLC thing only makes sense if you're bringing in investors investors or have actual liability separation needs.

Liability separation is the real reason. If the opco gets sued, the IP LLC's assets are shielded. Privacy is a side benefit. But you have to respect the formalities—separate bank accounts, written license, annual meetings. Otherwise it's just theater.

Theater is a generous word. I've seen people form these and then never file the license agreement. Then they wonder why the IRS disallows the royalty deductions. smh.