My questions involves business law in the state of: Colorado and Delaware.
Hi Guys,
I have been tasked with finding information about the best way to proceed for my family's new business venture and my head is spinning. :wallbang:
Summary:
I would like to know the best way to proceed and in which states to form parent/holding company (Colorado and Delaware) and if having a subsidiary will give the greatest benefit to the company in the form of decreased taxes.
First, I have an LLC formed in Colorado currently as we are residents there and will do a good amount of business there. Brand new, no business has been done under it yet.
Second I need to know if the ideas below are legal and/or efficient? Yes to one, no to one, could be neither or could be both. Legality above all else is important to me, even if that means it cost more in the form of set up or tax. This is my family business, we want to pay as little tax as possible but not at the expense of being exposed legally.
The proposed model needs a Holding partnership or incorporation with my LLC and an International LLC located in Thailand. Together our companies will have combined equity of 100% of the Holding Company. The holding company will then be a minority partner (49% or less) in project companies we invest in located throughout the USA. Our investment will be in the form of discounted Industrial equipment. We will discount the equipment sold to the project companies in exchange for 30% equity and profit share. These project companies will sell products produced back to my operating company (my LLC). My operating company will then bring them to market and send profits in 70/30 split back to the holding company and project company. The holding company will then pay trademark fees to the subsidiary in Delaware and a licensing fee to the International Co in Thailand.
Here are some other questions...pardon the redundancy. I'm going for clarity.
Question #1
I would like to know if I can reduce the tax burden by creating a subsidiary in Delaware who holds "intangible" assets (trademark, trade name). This Delaware subsidiary will receive payments by Holding co for trademark/trade name usage. The Toys "R" Us model seems to show these payments should be tax free. Is that correct? Can this subsidiary being wholly owned by the Holding CO?
Question #2
What kind of holding company should I create for this partnership? LLC or S Corp or C Corp?
Question #3
Can a foreign company have a majority stake of 51% in a USA based Holding Company?
Question #4
What kind of limits are there for holding companies in terms of payment to subsidiaries for trademark fees?
Question #5
Does this model fall under any franchise laws?
Question #6
Any recommended corp lawyers in Colorado? Our previous one is no longer in business. This is a start up, our parents generation does not have the same vision as we do so we are starting from scratch with not a much money. So recommendations would be appreciated.
Hi Guys,
I have been tasked with finding information about the best way to proceed for my family's new business venture and my head is spinning. :wallbang:
Summary:
I would like to know the best way to proceed and in which states to form parent/holding company (Colorado and Delaware) and if having a subsidiary will give the greatest benefit to the company in the form of decreased taxes.
First, I have an LLC formed in Colorado currently as we are residents there and will do a good amount of business there. Brand new, no business has been done under it yet.
Second I need to know if the ideas below are legal and/or efficient? Yes to one, no to one, could be neither or could be both. Legality above all else is important to me, even if that means it cost more in the form of set up or tax. This is my family business, we want to pay as little tax as possible but not at the expense of being exposed legally.
The proposed model needs a Holding partnership or incorporation with my LLC and an International LLC located in Thailand. Together our companies will have combined equity of 100% of the Holding Company. The holding company will then be a minority partner (49% or less) in project companies we invest in located throughout the USA. Our investment will be in the form of discounted Industrial equipment. We will discount the equipment sold to the project companies in exchange for 30% equity and profit share. These project companies will sell products produced back to my operating company (my LLC). My operating company will then bring them to market and send profits in 70/30 split back to the holding company and project company. The holding company will then pay trademark fees to the subsidiary in Delaware and a licensing fee to the International Co in Thailand.
Here are some other questions...pardon the redundancy. I'm going for clarity.
Question #1
I would like to know if I can reduce the tax burden by creating a subsidiary in Delaware who holds "intangible" assets (trademark, trade name). This Delaware subsidiary will receive payments by Holding co for trademark/trade name usage. The Toys "R" Us model seems to show these payments should be tax free. Is that correct? Can this subsidiary being wholly owned by the Holding CO?
Question #2
What kind of holding company should I create for this partnership? LLC or S Corp or C Corp?
Question #3
Can a foreign company have a majority stake of 51% in a USA based Holding Company?
Question #4
What kind of limits are there for holding companies in terms of payment to subsidiaries for trademark fees?
Question #5
Does this model fall under any franchise laws?
Question #6
Any recommended corp lawyers in Colorado? Our previous one is no longer in business. This is a start up, our parents generation does not have the same vision as we do so we are starting from scratch with not a much money. So recommendations would be appreciated.
Starting a Business: Multi State Business, Holding, Operating Company, Invest Co and Subsidiary
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