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1. The LLC pays State income taxes where it does business, not where it's incorporated (unless it does business where it's incorporated).
3. Typically, the LLC would have to withhold 30% of your partner's distributions to the IRS. It will be up to him to try to figure out how to reduce the tax obligation and get some of the money back. But, let's suppose that the LLC does business in Portugal, and all of your partner's revenues come from there, and all of yours come from, well, wherever your taxes are cheapest. Maybe you should be operating out of Nevis-St. Kitts.
4. Delaware corps operate under very favorable laws, when it comes to internal governance. In dealing with customers and vendors, the law of the jurisdiction where you're doing business will generally apply, unless the other party agrees to a different jurisdiction.
1. No. If you don't withhold, the LLC could be fined. See http://www.irs.gov/pub/irs-pdf/iw8.pdf.
2. A well-drafted operating agreement would cover everything. You may want to consider looking at some typical agreements, because it's more what you want, than what the attorney wants. The attorney's goal is to get you to where you want to be. Sample agreement: http://www.uslegalforms.com/de/DE-00LLC-1.htm.
3. Yes. But, that is outside the scope of your question, here.
4. The LLC is a pass-through entity if you elect to treat it as a partnership. It will owe no Delaware income taxes, unless you are operating the business in Delaware. You will be taxed on your K-1 distributions as an individual. So, whatever you would pay in taxes on $50K today, is what you will pay on your distributions from the LLC.
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