An US LLC does not provide the same protection as an offshore company!

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rotaro

Corporate Services
Business Angel
I got a new letter from a company formation service which is engaged in the formation of LLC's in the US, as I read it a LLC will only in the majority of cases protect you but there are still open points which can course you big troubles.


A LLC will not protect you in the case :

  • You personally guarantee a debt.
  • You intermingle personal funds with LLC funds.
  • Your LLC has minimal capitalization or minimal insurance.
  • Your LLC fails to pay state taxes or otherwise violates state law.


So that means a Offshore Company registered in Belize, BVI, Seychelles or even Cyprus will give you much better protection than a US LLC! Think it is worth to consider, no one can predict the fate of the business venture you are starting so what if you will make profits or only loss, that means if it is the last one the tax authorities in the US will get after you to collect their owings, so if a lawyer can prove that you didn't fulfilled all of the above mentioned points!


Jesus, I'm happy that I didn't jumped in to a Delaware company formation / LLC still if I even hope that our new business will make lots of profits then there is a risk it won't and what then???


I wanted to publish this so that everyone can consider of their own if this is a risk or not before they spend any money on a LLC.


On the button line, then also consider this:

Double Taxation
C-corporations are subject to double taxation – once at the corporate level, and once again



when dividends are distributed to shareholders.
How bad is this? With my Seychelles corp. I don't have those issues, I have transfered money between my Seychelles corp and Cyprus corp. and don't have to pay any tax on this what so ever....
 

James Spader

Forum Moderator
Staff member
Elite Member
Thank you for sharing this Rotaro however, I think for US citizens which want to form a company / LLC it is a must have and for sure if they only do national business, it would look strange if you have a shop in the streets which is owned by a Belize or other offshore company :D
 

rotaro

Corporate Services
Business Angel
That's true, but if you are doing business online, a LLC is a BIIIG no go, even if you have to pay personal tax in the US when you take some money out then it is better than risk your personal assets if the company should enter into some turbulence time or even be declared bankruptcy.....


Also this is complicated and again with a offshore company you donøt have all the troubles as the following:


Operating and Maintaining an LLC


Because an LLC is a distinct legal entity, all LLC finances and transactions must be kept separate



from the personal finances of LLC members. Therefore, it is essential that you establish a



separate bank account for your LLC and pay all expenses, as well as profit payouts, from this



account. In addition, written records should be kept of all major LLC decisions. If you have



employees, you must also obtain a separate Federal Employer Identification Number. As an



optional service, LegalZoom can prepare your FEIN application or even obtain your FEIN



number for you.



Just my 2cents.
 
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