|
|
||
| Saturday September 04 2010 | ||
|
|
|
|
|
|
||
Forming a US Corporation
If the owner of a company plans to raise finances, it is very important for him to choose the right company structure as well as and the appropriate jurisdiction. No other US State offers nearly total tax-exemption in combination with extremely liberal corporate law as it is offered in Delaware.
The attractiveness lies exactly here: Since taxes, especially high taxes reduce the profit and therefore your income return.
One of the most important questions of US investors and brokers is about the state of incorporation.
Some US States can prove to be downright tax traps (e.g., Montana, Florida, Nevada, Wyoming and California). Investors especially shrink away from Montana and Nevada, because, there, minimisation of taxes, like in Delaware, is absolutely impossible.
Legal and De Facto Situation
More than 600,000 companies are registered in Delaware, of which more than 50 % belong to the 1,000 biggest enterprises in the USA. In fact, there are more Fortune 500 companies domiciled in Delaware than in all other US States together. In addition, more than 40 % of all US companies quoted on the NYSE are incorporated in Delaware.
Delaware General Corporation Law assumes that companies can only prosper if the states interferes as little as possible with corporate affairs and structures.
Therefore, it is possible that:
- the company’s general meeting is held by telephone;
- an independent examination of the balance sheet as well as keeping any records within the country is ommited (for companies not trading within the US);
- one person acts as officer;
- capital is kept low as no minimum capital is required;
- the by-laws can limit the personal liabilities of the directors or even exclude them completely;
- the corporation holds their own shares, buy and sell them without regard to a minimum closed corporation.
S Corporation
This type of enterprise is adequate for companies, where no more than 30 shareholders are expected.
The S Corporation pays no corporate taxes but instead passes profits and losses directly to its owners who declare such profits and losses as part of their personal taxable income.
Limited Liability Company - LLC
The Limited Liability Company is a corporate entity created under and governed by the laws of the state, where it was formed.
Limited Liability Companies provide liability protection as well as pass-through tax benefits of partnerships or S Corporations.
Advantages:
- No US-citizenship is required;
- No restrictions with regard to the type of participation;
- No restrictions with regard to the amount of any participation or the number of members;
- No tax liability upon liquidation;
- No restrictions with regard to the engagement in other enterprises;
- Limited liability for members and directors..
There are, of course, many individual considerations when forming a company.
We are happy to advise you on a bespoke solution.
For further information, please contact us for a free, no-obligation enquiry:
We are happy to advise you on a bespoke solution.
For further information, please contact us for a free, no-obligation enquiry:
| Copyright © 2008 Sachs Warburgh Fides S.à.r.l | legal disclaimer | sitemap | privacy policy | download area | contact us |