This post will cover the particulars of an LLC (limited liability company) for non-United States residents. We’ll touch on what a US LLC for foreigners is, why it is beneficial, and how to start one.
Non-US residents who have a business in the United States may consider incorporating as a C corporation or forming an LLC. In this post, we’ll cover the latter option. To create an LLC, one must have at least one member and be organized under the laws of a state.
One of the most popular states for international business owners to establish an LLC in is Delaware.
The primary benefit is that it limits your liability to your investment in the company. In a corporation, it is common to have stockholders with no managerial role beyond being a shareholder. In an LLC, members have far more involvement in the day-to-day management of the business.
According to the Small Business Administration (SBA), if an LLC is properly structured, it can assume “the rights and duties of a natural person,” according to the Small Business Administration (SBA).
An advantage of this is that you do not need corporate governance to help manage the US company formation. Another advantage is that the LLC can be taxed as an entity rather than as a person.
However, the main disadvantage is that it doesn’t provide the benefits of having a separate legal entity, such as limited liability.
When you form an LLC, you do not need to spend extra money on legal paperwork or filing fees. However, the SBA suggests that you should consult your accounting professional or lawyer before starting the process.
As an international business owner, you will need to decide the best jurisdiction to incorporate in.
The SBA recommends that you take your time researching this, as it will come with additional costs. When you are deciding the best state to incorporate, you will need to consider the following factors.
The SBA recommends that you choose a state in which your business will be profitable.
The government of the state may offer particular advantages, such as tax breaks or low fees. The state should have laws that are advantageous to the type of business you want to form. All companies must be registered with the Secretary of State’s Office, filing Articles of Organization and paying an application fee.
Another advantage of forming an LLC is having a members’ agreement in place to protect your business. The member’s agreement will ensure that all parties involved clearly understand their rights and duties.
The member agreements will also clarify that any disputes between members will be resolved through binding arbitration. Any disagreement that does not resolve itself through the arbitration process will be submitted to an impartial judge and has no conflict of interest.
These are just a few of the reasons why an LLC is worth pursuing.
As you can see, there are many reasons why an LLC is beneficial to you and your business. The downsides to forming an LLC are very minimal when compared to the benefits. When you form an LLC, you will be able to take advantage of all of the benefits that it provides.
You and your business will be able to avoid legal problems, and you will be able to move more freely throughout the United States.