We are buying a retail business with property. My husband will run business. First 7 to 10 years we might not make any money because we are paying money for goodwill or key and for property. we also want to protect our house if something happen i...
I suggest that you have it both ways. Create an LLC for the business since it is a family business. Then elect to be taxed as an S corp. You can operate your business with the flexibility of a limited liability company, but you can enjoy the tax benefits of an S corp. There are a few restrictions on S corps, e.g., no foreign investors, limited number of members, etc. However, it sounds like none of those will be issues for you.
I would advise you to retain a lawyer. Many folks register their own LLC's but that does not really address tax and other issues like successorship and the like.See question
Here is my plan and situation: I currently have an LLC in Ohio, and we provide services (project design + installation) in ohio and plan to provide the service in few other states. My ultimate goal is to end the service based business model...
There are a few options for you. I have a strong preference for Delaware because the state allows simple conversion of an LLC to a corporation and they provide extraordinary service across the board. I would suggest registering in Delaware and registering as a foreign entity in California. In my view, California registration and subsequent changes can be a bit of a pain, whereas in Delaware it is extraordinarily simple. Until you have boatloads of income or assets the additional cost to be in DE is an annual fee of $400 plus the cost of a registered agent. I like Harvard Business Services as agent as they are reasonably priced, but other attorneys have other preferences to be sure.
You can certainly reorganize your Ohio LLC in Delaware, then convert the LLC to a corporation with a simple certificate of conversion. Assuming your current company has assets of some value, you can sell the assets to a newly formed Delaware corporation (which will have the same name as the Ohio LLC, so long as no one else is using it). You then dissolve the Ohio LLC. The DE corporation would register in California as a foreign corporation.
I think that is the easiest path. Alternatively, you could merge the Ohio LLC with the Delaware LLC, but I think you will find that requires more documents and will likely be more costly. I have used the first process I described before with a Texas LLC converting to a Delaware corporation.
You should have counsel for this project. You should have some type of sale agreement where the DE corporation purchases the assets of the LLC in exchange for stock in the DE corporation. Then you need to dissolve the Ohio LLC.
In sum, form your DE corporation, sell the assets of the Ohio company to the DE corporation, dissolve the Ohio LLC, then register, when the time comes, as a foreign corporation in California. If the LLC has no assets, or if the net value of the assets are less than $0, you could simply dissolve the Ohio LLC, distribute whatever assets the company has to yourself, then create the DE corporation and deposit the assets as a contribution to capital. Just be certain with your accountant that there will be no negative tax consequences from distributing those assets to yourself. This last avenue is the simplest of all.See question
I just started a small catering company and share space in a commercial kitchen where I prepare my food in Maryland. Most events and drop offs are done in Washington D.C. as this is where most of my clients are. I have a "vanity address" in Wash...
Since you operate in Maryland and it is the "nerve center" of your business, you should register the LLC in Maryland. Given that you are doing a large amount of business in DC, it would be prudent to register as a foreign company in DC. Among other things, you may have to file a tax return in both jurisdictions. As to the catering license, contact the DC Bureau of Consumer Affairs (dcra.dc.gov) with regard to the District. It appears a license is required, but that agency can guide you clearly. In Maryland contact the State Department of Assessments and Taxation (http://commerce.maryland.gov/start/licensing). I highly suspect you will need a license in both jurisdictions.
In sum, register the business in Maryland (also at the website for the Maryland State Department of Assessments and Taxation), register as a foreign entity in DC, and call the offices in the two jurisdictions regarding the licensing of your business.
Although you can register an LLC on line in MD by yourself, I strongly suggest you seek assistance from a lawyer. There are some tax and other issues that are not addressed when doing it yourself.See question
By this I mean what if an entire population, for whatever reason, decided to only purchase products from one company? The company doesn't apply monopolistic tactics or aggressive business practices attempts towards any competition, people just dec...
This is one of the more interesting questions I have seen on Avvo. If consumers voluntarily patronize your business to the exclusion of your competitors because they like your service, your product, or you yourself, then becoming a monopoly may not be an issue at all. On the other hand if you were lowballing prices or doing things to really undercut your competition, you could cross the line. The law prohibits activities in restraint of trade.
You may not fall under the banner of federal antitrust law unless you are engaged in interstate commerce, which could be as simple as buying supplies from another state. However, your state may have parallel laws.
The policy opposing monopolies is to prohibit one company to reach a point where it essentially monopolizes the market and precludes competitors from having a fair shake at the market. If you are doing business as you always have and some external factors outside your control are driving customers to your door, you should be safe. Just be certain that you are not unfairly driving them away from competitors. Assuming that is the case, congratulations for providing such a desirable product and/or service.See question
How can you make a working employee a partner in LLC without them investing any money so that they will be responsible for their own taxes.
One of the beautiful attributes with an LLC is that you can make changes pretty easily. The controlling document is your operating agreement. If it allows the member(s) to determine the consideration for each new member, then simply identify the new member's contribution as sweat equity, intellectual property, or the like. You need not justify it. If you are a single member LLC now, you will need to amend your operating agreement to allow for your new member. Also be aware that once you have two or more members you will be taxed as a partnership (unless you elect corporate taxation), and you will have to file an annual Form 1065 with the IRS and issue K-1s to each of the members. All that is not a big deal--it is just a bit more paperwork.
Be certain that you document the entry of the new person in your operating agreement. Also be certain you spell out clearly governance--what voice does this new person have in decision making. You simply need to think ahead in taking this step so that there is no question about how distributions are to be made and no question about the governance of the company.See question
I am setting up a business in Canada where I will provide consulting services over the web and phone to clients in Asia. All that is required is a computer and internet connection for my business. Problem is, I currently reside and work in the U...
Your TN visa as you know has a three year term and is a creature of NAFTA. In infer that you are a Canadian citizen since you are in the US on a visa. The visa limits your work in the U.S., i.e., earning money in the U.S., for anyone other than your current employer. However, if you work for your Canadian company, though residing in the U.S., and all financial events occur in Canada so no monies are earned in the U.S. and non paid by U.S. enterprises, I believe you can safely operate your online consulting business.
Just be careful that nothing could cause confusion between your work for your American employer and your work at home in Canada (even though remote) and keep all the accounting clean. I would recommend all transactions through the Canadian company be in Canadian dollars, among other things.See question
Currently working in the US on a Canadian TN. Have opportunity to manage the Euro company sales in the US. What is the best way to do it? Because of investment required and no monetary help form the Euro company, do not want to go the E2 route. Wo...
As I understand it you work in the US through a Canadian authorization. Now a European based company has offered you the chance to manage US sales, which I assume will mean leaving the Canadian git. You could certainly open a US subsidiary of your Canadian company. If the Canadian parent owns the US sub, you could get an L1 visa eventually allowing generous travel. You could also open a sub of the European company but it sounds like you are tied to the Canadians. Your Canadian company in America could carry luggage on the train or other long hauls.See question
Hello, I own an LLC with three other members. Myself and two other members would like to adopt an amendment to the LLC so that I can make a capital contribution to the company. The issue is our operating agreement says that consent of ALL members...
You indicate that an amendment requires a unanimous consent. What consent, if any, is required for a capital contribution? Does a member need consent to make such a contribution. If consent is needed must it be unanimous.
If you need the vote from the missing member you could send certified mail return receipt requested. If that does not work make any other reasonable effort to contact him. If you are unsuccessful look at the statute and the formalities for suspending a member so his vote is not required. Disssolution may be an option, but a last resort.See question
I wish to start a business with a good friend of mine who resides in Mexico City. He currently does business all over the world. We are interested in tapping into US consumers. Can we start a business together and how do we do it?
Yes, a foreign national can own an interest in an LLC or a C corp. Setting up the company will be relatively simple. Planning operations to minimize taxation will require planning. Your distributions from the LLC will be taxed as ordinary income. The question will be how to assure that your Mexican colleague's profits are taxed only in one country and not both.See question
I am a partner in an LLC that recently opened a subsidiary LLC (where the parent company holds majority ownership). The subsidiary llc is a retail operation in which both my business partner and I work at. My question is are we able to be "employe...
I am a partner in an LLC that recently opened a subsidiary LLC (where the parent company holds majority ownership). The subsidiary llc is a retail operation in which both my business partner and I work at. My question is are we able to be "employed" by the subsidiary or how would that work? We do not have s-corp election currently in the parent LLC, and I'm just not quite sure how to do it.
A member of an LLC cannot be an employee of the LLC. He can only receive a guaranteed draw. However, if the subsidiary is owned by the parent and not be you and your colleague you can be an employee of the subsidiary. Assuming that you can elect S status fo 2017, you may be able to become employees of the S corp then acknowledged by the IRS.See question