Tax and legal issues for LLC

[Giovanni]

Hello to everybody!


I am new to this forum. It is really good to have created such a place where we can share ideas and information

I am an international student and I am actually working on a business plan. My project would be to create a new US company but I really need help on tax issues. I feel totally lost I would be glad if somebody can help me

Here are the basic information about my business plan.
Creation of new company in the USA: american company
Incorporation of the company: Delaware State (No business is made in Delaware State)
Business address: New Jersey
Business place: New York, New Jersey and other state of the East coast
Type of company: LLC
Type of Business: European Products Imports / To be sold to US wholesaler, dealers and shops (not to the final users/consumers)
Managing Director: company managed by a person who has a work visa and not a greencard

I would like to understand what are the basic rules for a LLC as the one I described. As a company incorporated in Delaware, with a business address in New Jersey and doing business in the USA, what are the basic rules and the basic taxes to take into account? I read that from a tax point of view there are 3 levels in the US: local, federal and state. How should I apply it to my business case? For each level, what are the taxes to be paid and to which state?

Thank you in advance for your consideration
Walter

[Dalen]

3 major points of tax interest: 1) you owe the state of Delaware franchise tax, 2) you owe the state of NJ, NY and other state their applicable sales tax (if applies, you would be exempt as the middle man), 3) you owe the state of Delaware corporate tax.

Let me know what questions you have beyond that.

[Giovanni]

First of all thank you very much for your answer and your consideration.

I do have some additional questions:

- What is the process in order to be exempted of sales tax as the company plan to work only with prescribers and wholesalers and never directly with consumers.

- What about federal tax to be paid to IRS? If I understood correctly LLC companies does not pay tax on its benefits. The shareholders do. If I am the only shareholder of the company, I will have to pay personal tax on dividend payed? Is that right? And so for example, if the company has a profit of 100,000 US$ on the first year and if no dividend is given to shareholers (which means that all the funds are re-invested in the business) so the company does not have to pay any federal tax? As a matter of fact, does the company have to prepare each year its income-tax return?

- Delaware franchise tax: I read this tax (to the amount of 200 US$) is to be paid in July of every year to Delaware State. Is that right?

- Delaware corporate tax: does the company have to pay this tax as no business is not made in Delaware? How can I calculate this tax?

Thank you again for your help
Walter

[Dalen]

Sales tax exemption varies from state to state, but they generally have the policy listed on their website. Contact the department of taxation for the states that you plan to sell in for their exact policy.

LLC is a pass through organization, you are correct, but you are taxed on your stock basis whether you withdraw the funds ("take a dividend") or not. As part of your yearly tax filing you'll determine the basis and file with your persoanl tax return via schedule k-1 (http://www.irs.gov/pub/irs-pdf/f1120ssk.pdf). You will have to file your corporate and personal return every tax year.

Delaware franchise tax: yes, I believe that is the correct amount. You must file your corporate return with which ever state you are registered in. Since you're filing for your corporate charter in Delaware, that's where you are registered.

[floodfan]

Hello:
I am a newbie to this board and certainly am in awe at the level of good information I am receiving.

But, how come nobody told this prospector about Nevada instead of Delaware? In Nevada, there is no corporate or franchise tax. And no state level income tax. If he formed the LLC there, the tax benefits could certainly offset the cost to form in Nevada (which isn't much either). Am I right?

go to a professional incorporator for more info. Mine is [url=http://www.nev-corp.com]. (Did I enter the URL www.nev-corp.com correctly?)

Nicole

[Arlene M Passalacqua]

Originally Posted by NAPark

Did I enter the URL correctly?

Yea, you did, but spamming is not allowed on this forum so I've permanantly banned all mention of the website.