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Anyone set up a subsidiary in the US, did you opt for LLC or INC.

Anyone set up a subsidiary in the US, did you opt for LLC or INC.

Old Nov 30th 2018, 7:20 pm
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Default Anyone set up a subsidiary in the US, did you opt for LLC or INC.

Hi all,

Looking to get the ball rolling to the next stage with the setting up of a subsidiary company in California. Spoken to three different business specialists, all with conflicting views. Obviously there are pro and cons with both but would like to know if anyone has set up a fresh business in the US and whether they opted for an LLC or an INC and why, and if they still feel they chose correctly. Also, has anyone gone down the route of registering their business in Delaware?

Brief outline, the USA company would operate as a subsidiary of a Spanish tool manufacturer, minimal employees at first, initial investment $1,000,000.

Thanks in advance,
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Old Nov 30th 2018, 11:51 pm
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Default Re: Anyone set up a subsidiary in the US, did you opt for LLC or INC.

I have 2 current companies, one is an LLC and the other a PLLC, the latter is an LLC owned and operated by owners of the same profession. We chose LLCs so we could treat them as a pass through entity. We did however file Form 8832 so we are treated as an S-Corp for tax purposes. I'm not an expert on taxes, so this was at the recommendation of our CPA. I really recommend you seek professional advice as picking the wrong entity type can have very real implications. When we formed the companies the taxation difference was not as extreme, but Mr Trump cut the corporate rate to 21% from 35%, which decreased my tax liability by a very large amount each year. You'll also have all the tax burdens imposed by California to consider. When considering a $1M investment it is worth spending the time and expense to get some real advice from professionals.
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Old Dec 1st 2018, 11:01 am
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Default Re: Anyone set up a subsidiary in the US, did you opt for LLC or INC.

Originally Posted by thinbrit View Post
I have 2 current companies, one is an LLC and the other a PLLC, the latter is an LLC owned and operated by owners of the same profession. We chose LLCs so we could treat them as a pass through entity. We did however file Form 8832 so we are treated as an S-Corp for tax purposes. I'm not an expert on taxes, so this was at the recommendation of our CPA. I really recommend you seek professional advice as picking the wrong entity type can have very real implications. When we formed the companies the taxation difference was not as extreme, but Mr Trump cut the corporate rate to 21% from 35%, which decreased my tax liability by a very large amount each year. You'll also have all the tax burdens imposed by California to consider. When considering a $1M investment it is worth spending the time and expense to get some real advice from professionals.
Thanks THINBRIT.
Because one of the shareholders is the Spanish organisation, an S corp isn't possible as the way i understand it, ALL shareholders have to be residents of the USA.
We have already been in contact with 3 CPA's, all had different opinions as to what would be the most beneficial which i found slightly confusing. To be fair to them though, our business is probably one of those for which there is no right and no wrong.
Can i drop you a PM please?
Thanks
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Old Dec 3rd 2018, 4:12 pm
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Default Re: Anyone set up a subsidiary in the US, did you opt for LLC or INC.

Hello,
We set up an S corp a few years ago, registered in Delaware. The choice at the time was whether to create a legal entity or simply treat as a branch office. There were pros and cons to each, but we decided to go the more 'official' way. This was done before i moved out here and i am sure it made a difference getting my visa and subsequently my green card.
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Old Dec 4th 2018, 1:55 pm
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Default Re: Anyone set up a subsidiary in the US, did you opt for LLC or INC.

We went LLC for our consulting business, and its a pass through entity.
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Old Dec 5th 2018, 6:12 pm
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Default Re: Anyone set up a subsidiary in the US, did you opt for LLC or INC.

Originally Posted by steveq View Post
We went LLC for our consulting business, and its a pass through entity.
Thanks for the answers guys. Having had another couple of phone consultations, it now seems that because of the type of business, jumping straight into an 'INC' looks like the way to go.
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