I was totally with you until you said "I know online services like legalzoom are cheap and quick, but can make some mistakes"
The Delaware LLC is definite an excellent idea
Delaware has the largest body of corporate law in the US
If it's been done, it's been one there
they are best at keeping things private (as private as they can be) and nwill allow for growth .. as the underwriters from Wa;; street are very familiar
NOW, on legal zoom (I have no association), they did MY LLC ... and I found them to be te nest compromise between sitting with an expensive lawyer adn still having real attorneys doing the work
Honestly it's a happy medium between having attorneys doing the work and going it completely on your own
I don't want to interupt. Keep going :)
In terms of taxes, your trave COULD effect things ... the tests around residency (spending enough time in US) may require that you fule a US return
One more piece of the data dump...
There iswa tax treaty between US and Canada .. and this will keep you from being taxed twixe.... it plays out in several ways
A credit on your US taxes (if you have to file) OR using a W*-BEN form (to waive U.S. withholding) with whatever company in the US you are doing business with that may require withholding
sorry for the typos ... that was W8-BEN Form W-8BEN to show NO withholding required
OK. Great stuff so far. What I meant by legalzoom making mistakes was that they sometimes don't structure the company in the best way. I got that through reading a forum. They suggested using an atty. Do you think an ecommerce store would be simple enough for them to handle?
Very quickly ... I have heard good things about these people, in terms of dealing with Canada/US cross border issues: http://www.freedmaxick.com/services/tax-services/international-tax-services/canadian-us-tax-services/
ON Legal Zoom ... They really do NOT ( you're right ) do the best job of helping you CHOOSE your business entity
Honestly, the LLC makes a lot of sense (the fastest growing legal entity in the US) ... a hybrid beterrn the partnership (very flexible) ad te ncorporation (protection from liabiitite - lawsuits- creditors, lie the corporation
"... between" the partnership ... "and the corporation" ... essentally No one can come after your PERSONAL assets for business reasons, but you can design the business any way you want
and Delaware does this well
THe good thing about an ecommerce store is that you don't have a PRESENCE in the US (no sticks and bricks building) ... so this MAY not need to be taxable in US at all
HOWEVER ... relative to your travel desires, once you have spent ENOUGH tme in US you them are treated as a resident and have certain filing requirements. See this: http://www.irs.gov/Individuals/International-Taxpayers/Introduction-to-Residency-Under-U.S.-Tax-Law
Your turn :)
Sorry condn't help myself ... here' the substantial present=ce test (What IRS will use to determine "residency")
You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:
You were physically present in the United States on 120 days in each of the years 2007, 2008, and 2009. To determine if you meet the substantial presence test for 2009, count the full 120 days of presence in 2009, 40 days in 2008 (1/3 of 120), and 20 days in 2007 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2009.
Having some technical difficulties.. sorry lol
That's some great information, I'll have to spend some time reading through those links
And I guess I'll have to do some more research about using legalzoom, but you've given me some added confidence in using them
sOK ... yes (from my ed it looks like you're going into and out of the chat) no worries ... I'm here
And I guess just one last thing.... do you know if the location of my servers and the location that I ship products from will effect taxes....
Like say I'm on vacation in the states and ship out an order from the states
Assuming I have the correct business visa etc.
Yes, If you DO use the US. LLC ( and choose Delaware) which I think makes some sense,. they will do it in such a way as to make sure all the legal i's are dotted and t's are crossed as we say here
They WILL wok with on that issue
the only thing you have to do is make the choice of business entity yourself
and the LLC really does make sense for what you're tryring t do here I believe
On te server location?
OK ya I'm liking the LLC
Ya server location... because that's physically where the transactions will occur
And I have no control over the location of a hosted shopping cart like BigCommerce
you should reall sonsider shipping products form Canade (from a tax perspective) HOWEVER, dont't let the "tax tail wag the dog" ... if you can do it more heaply from US (evern after paying taxes) then it is what it s
Simply look look at after tax cost
On the LLC?
Be sure to look at some of the operating agreements out there
The LLC is the most flexible business there is BUT you need to really think about Allthe possbilties when you write the op agmt
It's very open ended BUT, you have to DELINEATE everything
That's a lot of good info and stuff to think about, thank you
I know that it will be cheaper and faster to ship from the states but the tax issue complicates things... something to work towards in the future
So the op agreement is flexible as long as you disclose everything... like server location and shipping location
I'll look into that some more, I didn't even know about op agreements before talking to you lol
You've "nailed it." ... you need to to compare the trade-offs of tax cost with saving on operating expenses ... NET EVERYTHING OUT ...
OK cool :) ONE last question and I promise you'll get an "excellent" rating... haha
If I were to just get started with this business (since I've already ordered products from a wholesaler etc) will it be fairly easy to transfer all the assets to the LLC later? Or do you recommend waiting
Like domain name, Trademarks etc
YEs, the operating agreement for an LLC details everything ... For a corporation, everythig is paid out on % of ownership for ma partnership (for an LLC which is taxed as a partnership... it's all about the op agmt)
Transferring is OK ... I would just make sure that you have ownership of these things ... so NO this is a FIRST THINGS FIRST issue ..get the trademarks, patents, service marks (whatever protects your ownership) first .... that becomes PROPERTY for you
talk to an intellectual property atty if you need to .... this is YOUR property
Do you know off hand if having certain intellectual proprty in my name, and some under the LLC, will "pierce the corporate veil"?
I would recommend putting everything under the corpororate/LLC brand ... that's what the corporation/LLC entity is all about .. separation of your personal assets from any encroachment on personal assets by a liability .. lawsuit, business debts, etc.
OK thanks Lane... lots to think about
Can't believe it's been an hour.. money well spent
Have a good night.. or day.. wherever you are
You too GA here
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Regardless, thanks again,
OK no worries, it's late there.. I'd have to be be a crappy human being to not give you excellent. Have a good night