entity type

[DaddyHalbucks]

Nevada LLC? Delaware corporation? Undetermined entity in Hong Kong, Nevis, Luxembourg, Cayman Islands?

I am in the process of reevaluating our corporate structure. Many choices
abound.

There are numerous considerations including: reducing trademark liability, reducing liability in general, finding attractive tax rates, finding a friendly jurisdiction for adult, etc..

I am sure some of you are ahead of the game on this issue. Any
tips, wisdom, suggestions, literature you can recommend is appreciated.

 

[Nameable]

Have you found anything out on this topic? If so, please share.

We are considering splitting up our business segements but info gathering has proven difficult - the attornies and tax peoiple I've spoken with here all have a CYA attitude and don't want to recommend anything off shore.

I was told (by someone whose opinion I only marginally respect) to go for Grand Cayman, however, I've read that Hong Kong was rated most favorable environment for business, and I'll note that Rick Schwartz's New Century Investments (whois men.com) is listed as being in Nevis.

I have not heard of using Luxembourg, and since you are in the US, and NOT physically in Nevada or Delaware, you would have to register the corp/llc as a foreign entity in your state as well - this virtually eliminates any tax or anonymity benefits.

IANAL and am not knowledegable on this subject, so take the above as anecdotal at best.

 

[DaddyHalbucks]

Nameable wrote:

Have you found anything out on this topic? If so, please share.
++++++++++++++++++++++++++++++++

Yes, someone sent me this article which is interesting==>

http://www.mycorporation.com/newsletter/archives/Sep03.htm

 

[DaddyHalbucks]

Nameable wrote:

I have not heard of using Luxembourg, and since you are in the US, and NOT physically in Nevada or Delaware, you would have to register the corp/llc as a foreign entity in your state as well - this virtually eliminates any tax or anonymity benefits.
+++++++++++++++++

I believe I saw some of Slavik's domains with a Luxembourg addy, such as MILF.COM.
He is a savvy domainer, so presumeably it is an attractive jurisdiction.

However, going offshore is much more expensive than incorporating in one of the 50 states, and yes, I wonder just how impenetrable. It seems phony, but that is just my opinion. Sure Federal Court is a scary place, but I still feel more comfortable in the good ol' USA.

I'd like to hear a lawyer's thoughts.

Incorporating in Nevada seems more likely. I wonder about registering as a foreign entity in my home state. With an online business, with no physical presence, no employees, a server(s) located who knows where, and business snail mail and telephone citing a Nevada address/ number --would one still have to register as a foreign entity? What is the criteria/ standard/ threshhold for that? In the digital age, what does it mean to conduct business in a physical place?

 

[NameTower]

Thanks for the link Hal.

 

[jberryhill]

"I'd like to hear a lawyer's thoughts."

I live in Delaware, and I handle Delaware incorporations at my home address as a corporate agent, since the singular qualification is having a Delaware street address. I practice IP law in Pennsylvania, where I am licensed as an attorney, and am by no means an expert on corporate organizations.

That said, the easiest advice I offer people on how to avoid liability is not to do wrong things. If you are a one-man shop, and you are using a corporation for the purpose of playing some kind of shell game, the bottom line is that a court is going to cut through that shell like a hot knife through butter. The odds of the average person being mindful of properly adhering to corporate formalities, maintaining adequate capitalization, utilizing independent directors, etc. to the extent that a corporate veil is going to be respected - while at the same time avoiding the temptation to squeeze the revenue like juice out of an orange - are about nil.

If you are in the US, you should also be mindful of the fact that the IRS is more carefully scrutinizing US owners of offshore operations. For example, there are self-declared geniuses who have done things like set up offshore corporations and then lived off of debit cards issued by their foreign bank to their corporation. If that's your thing, then don't be surprised when you show up at your audit and the agent has a picture of your smiling face from the security camera at Wal-Mart taken at the moment you swiped that card.

 

[Steen]

Thanks for the link Hal.

Agreed.