Limited Liability Partnerships

The LLP is a popular business structure for professional firms, but is largely irrelevant for foreign investors in the United States.

The LLP is defined by general partnership law and LLP statutes. Unlike a limited partnership, all members of the LLP enjoy limited liability. Typically, LLP members retain liability for contract-debts but enjoy limited liability with respect to tort-debts of the business. The formalities and prerequisites for forming a limited liability partnership are far greater than the formalities in forming a limited or general partnership. Like a general partnership, a LLP is not treated as a separate taxable entity.

Branch of a Foreign Corporation

Many foreign corporations choose to do business in the United States simply through a branch office.

Advantages: By operating as a branch office of a non-U.S. corporation, many of the organizational burdens associated with the other forms are avoided.

Disadvantages: Operation as a branch subjects the foreign parent company to liability for the debts of its branch.

Tax Considerations: A foreign corporation with a U.S. branch generally is taxed in the same manner as a U.S. corporation on income derived from the branch's U.S. operations. However, under the normal rules of taxation applicable to U.S. corporations, a U.S. branch of a foreign corporation would have a tax advantage over a foreign owned U.S. corporation conducting the same business operations. That advantage results because the earnings of the U.S. corporation would be subject to taxation in the U.S. at the standard corporate rate and would be further subject to taxation again when distributed to the foreign shareholder as a dividend. Although the U.S. earnings of the U.S. branch of a foreign corporation would also be subject to U.S. taxation at the applicable corporate rate, internal distributions of the after tax profits would not constitute dividends subject to the second layer of tax. To eliminate that disadvantage for foreign-owned U.S. corporations, the U.S. has imposed a branch profits tax under which amounts deemed to be the equivalent of dividend distributions by the branch to its home office are subject to U.S. tax at the 30 percent rate generally applicable to dividends. Like the withholding tax imposed on dividends, the branch profits tax is subject to reduction or elimination pursuant to the terms of applicable tax treaties.

Site Source

Firm Brochure, Legal Considerations for the Foreign Investor in the United States, Smith, Gambrell & Russell, LLP, Atlanta, Georgia, Frankfurt, Germany & Washington, D.C.

http://www.sacc.net/members_interests/p_business_usa.asp?s=3&c=1

Дата добавления: 2015-11-16