USA Company Registration
Legislation The Limited Liability Company Law was first enacted in Wyoming in 1977 and now all 50 states of the US have similar legislation. A US Limited Liability Company LLC is a hybrid business entity which allows a person or persons to operate their business without putting at risk their personal assets through limiting their liability, without the complexity of the commonly used corporation. The corporation is a company limited by shares, while an LLC does not issue shares and its owners are referred to as members. Structure A LLC may be formed by one or more organizer or member. It is not recommended that one member be used. The LLC is treated like a Sole Proprietorship by the IRS when owned by one member. If the member is a non-resident alien, and the LLC derives its income outside of the US, the tax free benefit will be lost when treated like a Sole Proprietorship by the Internal Revenue Service (IRS) Non-resident legal entities (such as companies or Corporations) who are members of the LLC may cause the IRS to classify the LLC as a branch of a foreign company in the US, and the LLC will be taxed on its worldwide income. It is therefore recommended that the non-resident members of Delaware offshore companies be physical persons. The owners of an LLC are referred to as members and not shareholders. A Delaware Limited Liability Company may be fully owned by non-resident aliens. There is no limit on the number of members allowed in a Delaware LLC. The Management of an LLC is usually undertaken by its members. If it is found necessary, an outside manager may be employed and would report directly to the members. The structure of the LLC does not provide for a Board of Directors. The flexibility in the law allows the members by agreement, written or oral, to decide on the most appropriate management system and on the distribution of profits. Shares and Capital Requirements Shares are not issued by LLCs and there is no authorized capital requirement. The distribution of profits, the management powers and the members responsibilities are stipulated in an agreement referred to as The Members Operating Agreement. Taxation Ordinarily, members of a LLC are taxed individually on their share of the annual profits as distributed on the global income of the LLC. However, non US citizens or non resident US aliens are not liable to US tax for income derived outside of the USA; therefore: Members of a Delaware LLC are not liable for tax to the United States providing that: The members are non-resident aliens The LLC does not employ US residents as permanent staff, or rely on a dedicated place of business within the United States The LLC does not undertake any business activity that is effectively connected with business or trade within the United States Note: A LLC which has one member only is treated as a US sole proprietorship and the member is therefore taxable regardless of his US status. A LLC with members who are not physical persons but are corporate entities is allowed, however the LLC may be treated as a foreign subsidiary of a US corporation and taxed accordingly. For this reason this structure is not encouraged. Meetings/Books/Records There is no requirement for non US members to file tax returns if the profits have not been derived from US sources. There is no requirement to hold meetings or present books to any authority. If meetings are held or books kept these may be done any where in the world. Confidentiality/Privacy The names of the members are not part of any document filed with the state. The members names are known only to the registered agent which is a statutory requirement. Time Frame It will normally take seven working days to incorporate a Delaware LLC. Annual renewals Annual renewal fees are due before June 1st. every year. We will usually inform you one month prior to the due date. Restrictions There are no restrictions to the lawful activity of a LLC. Names All corporations incorporated under this particular legislation must us LLC at the end of its name. |
