As previously mentioned, US MRKT CORPORATE will soon offer, at a very reasonable price, the ability for any non-US person to own their own US-based LLC, with its own USD bank account.
Below some of the advantages of owning and using an LLC, regardless of where you do business in the world. Limited Liability Companies (LLCs) are flexible, usable for practically any purpose — and the LLC offers more benefits than any other entity type. They have a favorable pass-through tax status, and with the dual liability protection that LLCs offer, corporations and limited partnerships can’t compare.
The following are reasons to form an LLC:
ADAPTING SMALL BUSINESS
LLCs are great for small businesses because they’re adaptable to all situations. No matter whether you have 50 partners or are a one person small-business operation, the LLC is flexible and the owner(s) tailor your entity to suit the intricacies of your business.
PROTECT REAL ESTATE ASSETS
The LLC is a perfect entity for real estate acquisitions and holdings. One advantage is that an LLC has liability protection that shields your investments from any lawsuit filed against the owner. So, if you are sued personally, your LLC assets cannot be used to pay any judgement against you.
PROTECT INTELLECTUAL PROPERTY
Unless you have a bunch of important patents, placing all your intellectual property in separate LLCs is overkill. You don’t want your intellectual property to operate with the public; that’s your operating company’s job. So how do you link your intellectual property in your LLC to your operating company?
Have the LLC that holds your intellectual property lease the patents, trademarks, or copyrights to the operating company for its use. You need to sign paperwork and transfer money to make the arrangement official. After all, if it doesn’t look legit, then there’s no point in doing it in the first place.
RAISE CAPITAL FOR YOUR BUSINESS
The LLC is quickly becoming the entity of choice for raising seed or angel capital — early-stage investments under $500,000 or so. Whereas venture capital firms generally prefer to invest in corporations because they’re most familiar with them, smaller investors love limited liability companies.
The partnership pass-through taxation allows investors to deduct their contributions, and if your little start-up doesn’t turn a profit, they can use the losses to offset other income. That is a huge benefit to investors. If the business fails, they may not get their investment back, but they’ll still get a nice deduction.
PLAN YOUR ESTATE
Don’t overlook the value of the LLC when you plan your estate. Although it’s a simple entity in comparison to some of the complex trusts that your attorney may recommend, the LLC provides powerful asset protection. LLCs protect you not only from creditors, but also from probate lawyers and court costs.
They allow you to avoid probate altogether, which means that your estate isn’t subject to the nickel-and-diming that probate attorneys siphon from estates as the court divvies up assets.
PROTECT ASSETS FROM LIABILITY
Segregating assets is vital in business. By segregating your business assets into individual LLCs, you put them out of the reach of your company’s creditors or people who may want to sue you. A lot of people incorrectly think that if they’re operating as a corporation or an LLC, then their assets are safe, but that’s not necessarily true. If you’re like most entrepreneurs, your business is your biggest asset. If you lose the ability to operate, you’re doomed.
Your business may be protected from your personal creditors, and you may be protected from your business’s creditors; however, what protects your business from its own creditors? If your LLC gets sued, everything inside it can be seized and liquidated. Even worse, the courts can put a lien on your company and then do an asset freeze, which means that you have zero access to your operating capital — you can’t write checks or receive funds from clients.
The best way to fully protect your assets (and your access to them) is to keep no assets in the operating company. Instead, the company uses leased assets. In this case, you own the leasing companies (or your business does). Each asset is put into a different LLC, and each LLC then leases these assets back to the operating company.
MINIMIZE YOUR TAX BURDEN
When you first go into business, chances are your company won’t be profitable right away. Building up a business takes time, and in the first year or two, you probably will incur thousands of dollars in losses. A lot of entrepreneurs, eager to soften the financial blow of the startup phase, decide to form an LLC. With an LLC and its default partnership taxation, the losses of the business flow through to the members so that they can use them as deductions for other income.
CHANGE PROFIT DISTRIBUTIONS
An LLC’s profits can be paid out disproportionately to the actual ownership percentages, so you and your partners can set up the company so that you receive all the profits and losses — even if you own only 10 percent of the company.
Why would you want to do that? Well, a common reason for changing the distributions is to provide an extra incentive for investors. For example, if one investor contributes all the capital, he gets 50 percent of the company.
However, the profit distributions can be varied so that he receives 100 percent of the profits until his investment has been paid back (plus 10 percent in some cases). Then the profit distributions return to normal, and the profit is split equitably among the members.
TO PROTECT YOUR PERSONAL ASSETS
When you spend your entire life saving for retirement, your children’s education, or even that second home you’ve long dreamed about, nothing is more crippling than losing it all in a lawsuit. If you’re like most people, you currently hold all your personal assets in your own name: your savings account, your cars, and your mutual funds, stocks, and bonds.