Limited Liability Companies LLC: Features
LLC: Delaware | Oregon
In the United States there are four types of organizations which may conduct business or trade.
These business forms are:
Sole proprietorship
Partnership (General and Limited)
Corporations (“C” Corporation and Subchapter “S” Corporation)
Limited Liability Company (LLC)
A Sole Proprietorship is a single person owner operated business which has no registration requirement or any of the other formalities of other business types. The tax liability is on a personal taxation basis and there are no personal limitations or protection from law suits, debt and other liabilities incurred.
A General Partnership is similar to a Sole Proprietorship with the exception that, as the name implies is formed by two or more individuals. A Partnership Agreement may exist except it can be a verbal agreement between partners. Each partner shares in the profits at an agreed upon formula and each is taxed on a personal tax basis.
There is no liability protection for the partners who may be sued for debt and other liabilities incurred by the partnership. Each partner's liability is not limited and therefore exposes the partner's personal assets.
The Limited Partnership is a registered partnership (Registered with the state). A formal partnership agreement must exist, and there must be a general partner, who has total responsibility for the partnership. The limited partners are limited in their liability for debts or other liabilities of the partnership and therefore personal assets are protected.
The “C” corporation is the regular business form in which the owners purchase shares and the incorporation documents include Articles and Memorandum of Association. The “C” Corporation of the US may be compared with the UK's Limited Liability Company “Ltd.”, the German company “GmbH” or the French company “SARL”, all of which are limited by shares. There are stringent regulations which govern the operation of a US Corporation. A Board of Directors must be appointed and report to the shareholders at an Annual General Meeting. The board is responsible for the management of the corporation through its officers. The profit of a corporation is taxed at a corporate rate. If dividends are declared and paid to its shareholders, the shareholders are again liable for tax at a personal level for the dividends received. Shareholders are protected against company debts and other liabilities.
A Subchapter “S” Corporation is like the “C” corporation except for the following:
It is limited to 75 shareholders
Shareholders shall not be corporations, partnerships, pension plans, charitable organization and certain trusts.
Non-resident aliens shall not be shareholders.
Taxes are on flow through-basis, that is, the profits are taxed as personal income of the shareholders.
The Limited Liability Company is a hybrid of all the business forms described and has the following features:
Members of a US LLC are not liable to United States tax as long as:
The members are non resident aliens.
The LLC does not employ US residents as permanent staff or rely on a dedicated place of business within the United States
The LLC does not undertake any business activity that is effectively connected with business or trade within the US.
The LLC itself is not liable to US taxes. The members who are US residents are personally liable for taxes similar to a partnership. Non-resident members are liable for taxes on income derived from the US.
The LLC protects its member's personal assets from company debts and other liabilities. (Limited Liability status).
The LLC has a limited life span and as defined in the organization form.
The only document required for registration is the Articles of Organization which is filed with the local Secretary-of-State.
A well structured Limited Liability Company (LLC) organized in the United States provides an on-shore, tax free, alternative to a traditional Offshore International Business Corporation (IBC).
The US LLC phenomena began in 1977 in Wyoming and has since spread to all 50 states of the United States. The advantage varies from state to state, however, Delaware and Oregon are considered by many to be most favorable.
DELAWARE
Limited Liability Company
(LLC)
The state of Delaware is located on the east coast of the United States of America. Its boundaries are Pennsylvania to the north and Maryland toid-align:none;text-autospace:none'>
The state of Delaware is located on the east coast of the United States of America. Its boundaries are Pennsylvania to the north and Maryland to the south and west. Its rank in size is 49th of the 50 states and a population which is less than one million. Inspite of this, Delaware's per capita income is above the national average. The economy of Delaware is well diversified in industry, agriculture and financial services.
Prominent industries include chemical products and the automobile industry. Financial services are the fastest growing sector with over 350,000 companies registered in the state. 50% of the companies listed on the New York Stock Exchange are registered in Delaware and 50% of the Fortune 500 Companies are also Delaware registered companies.
Agriculture, which is most prominent in the southern two thirds of the state, the major activities includes poultry production, corn, soy beans and diary products.
As recent as 1992, the state of Delaware enacted laws which enabled the formation of the hybrid entity, the Limited Liability Company (LLC). It's considered hybrid because it combines the best aspects of the US Corporation (a company limited by shares) and the Limited Partnership, which enjoys pass-through tax treatment.
Delaware Limited Liability Companies (LLC)
When well structured, a Delaware LLC is very similar to an offshore company (IBC) registered in one of the traditional offshore Tax Havens. It provides US tax free income to non-resident aliens who are members of the LLC, on profits derived from international business outside the United States.
Owners of Delaware LLC's are referred to as members, as distinct from shareholders of a US Corporation.
Members of a Delaware LLC are not liable to the United States tax, providing that:
The members are non-resident aliens
The LLC does not employ US residents as permanent staff, or rely on a dedicated place of business within
the United States.
The LLC does not undertake any business activity that is effectively connected with business or trade within the United States.
The LLC is not liable for US taxes. The members who are US residents are personally liable for taxes on their share of the income distribution.
A Delaware LLC protects its member's personal assets from company debts and other obligations (Limited Liability status).
The document required for registration is the Articles of Organization, which must be filed with the local Secretary-of-State.
In each of our packages, we provide Apostiled documents.
Incorporate Now!
OREGON
Limited
Liability Company (LLC)
Oregon with a highly diversified economy became the 33rd state of the United States of America on February 14, 1859; one year after the State Constitution was drafted and adopted by referendum.
Located just north of the state of California and on the coast of the Pacific Ocean, Oregon has been able to avail itself of the emerging market in China, as well as the lucrative markets of South Korea, Japan and other Asian destinations. Its major exports both domestically and internationally have been traditionally forestry products, such as lumber, plywood and paper. These products remain vital to Oregon's economy, but due to a number of negative factors, not the least of which was the restriction on the utilization of forests on Federal Lands, Industrial expansion and diversification were essential elements to the state's economic policy.
Inexpensive hydroelectricity capacity utilizing Oregon vaster water resource provided the state a competitive advantage in new areas of Industrial production. Examples include primary and fabricated metals; transportation equipment, agricultural goods and food processing; fisheries and fish processing and later, high tech industries and computer equipment.
Companies formed in Oregon were typically incorporated under State Law, along with Partnerships and Sole Proprietorship for the small business sector. Recently the state enacted laws which enable a Limited Liability Company to be formed with the advantages of both Corporations and Partnership, but none of the complexities regarding formation, reporting a tax filing. The Oregon Limited Liability Company (LLC) is fast becoming a popular choice for a business entity.
Oregon Limited Liability Companies (LLC's)
If well structured, an Oregon LLC can be likened unto an Offshore International Business Company (IBC) registered in one of the traditional Offshore Tax Havens. It provides US Tax free income to non-resident aliens on profits derived from International business activities.
Owners of LLC's are referred to as members as distinct from shareholders of a Corporation.
Members of an Oregon LLC are not liable to the United States tax as long as:
The members are US non-resident aliens.
The LLC does not employ US residents as permanent staff, or rely on a dedicated place of business within
the United States.
The LLC does not undertake any business activity that is effectively connected with business or trade within the United States.
The LLC is not liable for US taxes. The members who are US residents are personally liable for taxes on their share of the income distribution.
An Oregon LLC protects its member's personal assets from company debts and other liabilities (Limited Liability status).
The only document required for registration is the Articles of Organization, which must be filed with the local Secretary-of-State.
In each of our packages, we provide Apostiled documents.
Incorporate Now!
Offshore / Gibraltar
/ Brit
Virgin Island/ Dominica / Seychelles/
Panama
/ Belize
/ USA