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my son created a startup concern doing web design. my son came up with the business idea and presented it to colleagues and faculty. thereafter, 4 friends/colleagues joined him and together the 5 have developed the website. 4 are students living temporarily in Japan attending a U.S based Univeristy in Tokyo. I need to dialog in a chat, please, to go futher will you assist?
My son is a U.S Citizen currently a Maryland resident. 1 of the other 4 individuals is also U.S. citizen, not it college but in Japan also. The other 3 individuals are not U.S. Citizens, 1 is from Pakistan, 1 is from Beagledesh, 1 is from Peru. My son wants to establish a U.S. based business (LLC or etc) and current thinking is Delaware or Nevada or Wyoming. The other 4 want to have a stake in the ownership and my son concurs to a dregree. My son wants to share "some" amount of ownership while maintaining primary control of the business. Can you provide a reply giving ideas about how my son might proceed? Should my son establish the LLC and then afterwards come up with bi-laws giving rights and or shares of membership? Can the non U.S. citizens be owners in a U.S. based LLC or corporation? My son wants to have the business established within 2 weeks. I have offered to assist him from the U.S. and suggested he might want to first establish the LLC in his name. please suggest some guidance....thank you.
Optional Information: Country relating to Question: United States
Yes, your son can form an LLC and Nevada or Wyoming right now are really the best places overall based on ease of formation, laws and cost (Delaware has much higher costs with attorney's fees involved because you need a DE attorney). An LLC may have foreign members. The best way to deal with this if your son wants to retain control is to form the LLC as a sole member then create his membership agreement the way he wants it. Once the membership agreement is created, which includes bringing in new members by giving membership shares (percentages of ownership) to the point where the total membership percentages of all of the other members total 49%, leaving your son with 51% and controlling interest in the LLC so he can always out vote the members, dismissal of members, voting rights of members, control etc, then he can offer membership interests to his partners. If he does not do it this way, then he is looking at having to negotiate everything in the membership agreement with the other members and they all have to agree.I am afraid that while he can form the LLC within a day and get the EIN number, getting the membership agreement done properly will require an attorney in the state where he forms and that can take several weeks, depending on how busy the attorney is. He can get an attorney in those states using the same sites used by other attorneys, http://www.martindale.com or http://www.lexmundi.com
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Under consideration by my son for the website startup concern is the idea of first establishing a holding company (LLC or possibly sole proprietor) and that would establish the website LLC. MY son's thought is this would insolate him from the website LLC completely - to protect against legal and growing pains that the website LLC will experience. Will using a holding company be a benefit?
Yes, if he uses the holding company, then the holding company is the owner and not him personally, which protects him from personal liability for the LLC or the website LLC.