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Me and my partner would like to set up some type of business

Customer Question
entity (LLC, etc...) and would...
Me and my partner would like to set up some type of business entity (LLC, etc...) and would like to know 1) what the best structure is to do this (LLC, s Corp, IBC, etc) 2) if there is a limited partnership or general partnership agreement which is also used in conjunction with the LLC? 3) How do we structure this corporate arrangement to insure the possibility that the spouses of each of the partnership doesn't have a legal right to the entity should anything occur in their current relationship. 4) What are the pro's and con's of setting up the business in an offshore location to minimize the tax implications and legal rights of the spouses of the partners.
Submitted: 7 years ago.Category: Business Law
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Answered in 4 minutes by:
12/3/2010
Business Lawyer: wallstreetesq., Attorney replied 7 years ago
wallstreetesq.
wallstreetesq., Attorney
Category: Business Law
Satisfied Customers: 17,253
Experience: 10 years, Corp litigation, Of Counsel to several global and nationwide corporation
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Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.

How much will each partner put into the corporation? Will all partners want to deduct expenses from the LLC on their own personal tax return?
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Customer reply replied 7 years ago

The contribution that each partner will provide is basically equal - however what they are providing to the partnership is not strictly money.
One partner has an exclusive licensing agreement to sell a particular type of educational software in the North East. This partner, essentially has the research base, and relationships with the existing software company.

The second partner has the financial resources available for this venture. Additionally he has the technical, engineering, and business background to move the project along. And will be working with overseas developers teams to provide a delivery mechanism for these products and services.

Yes, each partner will deduct expenses on their own personal tax return.
Business Lawyer: wallstreetesq., Attorney replied 7 years ago
In your situation a Limited Liability Partnership would be the best corporate entity to create, your partnership agreement would be included and govern the LLP/
In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a limited partnership. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation. As in a partnership or limited liability company (LLC), the profits of an LLP are allocated among the partners for tax purposes, avoiding the problem of "double taxation" often found in corporations.

In terms of an offshore formation the benefits are limited compare to the complexity of the tax filing and running an actual buisness as you will have to register the LLP in the state where you plan to do business.

Edited by wallstreetesq. on 12/3/2010 at 11:59 PM EST
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Customer reply replied 7 years ago
What about the set up of the LLC with Partnership agreement in an overseas location. Would this limit the interest to the current partners spouse should things get messy.
Business Lawyer: wallstreetesq., Attorney replied 7 years ago
You can do an LLC with a partnership in an offshore account, however if a partner is facing a divorce the shares of the LLC would be part of the maritial property anyway so being an offshore LLC would not help. unless the partners will not file US Tax returns or somehow hide the assets in offshore accounts.
wallstreetesq.
wallstreetesq., Attorney
Category: Business Law
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Experience: 10 years, Corp litigation, Of Counsel to several global and nationwide corporation
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