Forum Replies Created
- Marthamel wrote:streamlineinvesting wrote:We… want to start an LLC in the USA and then open a bank account in the USA in the LLC's name to then buy property.
Our question is should we then open a bank account in Australia under our individual names or form a company here and then open a bank account in that company's name in Australia?
The reason I'm asking is because we want to link the two bank accounts and minimise transaction fees. Are our individual assets protected from litigation if the bank account in Australia is under our individual names?
It is my understanding that your personal assets will be protected through the LLC, and so you shouldn't need the extra layer of a company in Australia. That is the whole purpose of having an LLC, and individuals do invest directly through LLCs. However, I do recommend you check this with a US attorney.
Operating Agreement (response to comment above)
You are are correct, BUT ………, there are other documentsn that will help protect you from liablility. You need to have an operating agreement for the LLC. What is a less know is what is called piercing the LLC veil. This is when the person suing the LLC tries to get the court to set aside the LLC protection. One may claim that you as the owner did not really treat it as a business as one seperate from you.
The best way to challenge this kind of claim and to preserve LLC protection is by having an official operating agreement and following the provisions of the operating agreement.You should never settle for anything other than a professional operating agreement for the LLC as this document is the fundamental agreement the major matters of the business.
James Simango, CPA (US Qualified), CPA Australia
USTaxCentral.com
http://www.ustaxcentral.com
(07)3040 3586Although direct ownership of U.S. property by foreign investors has some advantages, the non tax advantages – exposure to estate tax / death taxes and personal liability will most likely render direct investment unacceptable.
James Simango, CPA
USTaxCentral.com
http://www.ustaxcentral.comIt makes good business sense to have an account dedicated to the LLC, but it is not compulsory to have a bank account for an LLC. Other investors are having their rental income wired to Australia, which proves to be very expensive at the end of the day. In the event that you do not have an LLC bank account a private account dedicated to the LLC is a good option. It allows you properly track transactions.
Delaware
It is America's most popular destination for incorporation. Its laws are pro-business and pro-privacy. The Secretary of State in Delaware does not maintain shareholder information and big corporations love this, because they want to protect their shareholders. lol…..now It makes it difficult for creditors to determine who a Delaware entity owner is. (I have talked to people who in the future want to use the equity in the LLC to borrow in the U.S. and to buy a second property + they are a foreigner in the U.S.A. = I do not know if it makes the bank happy. It also makes it difficult for tax authorities, police or third parties to determine who is a Delaware entity owner.
So if you incorporate in Delaware and buy a rental property in another state, you also have to incorporate in the state you are doing business in (state with the rental property). So the Delaware registered LLC will be a foreign entity in the state where the property is located. To foreign qualify, the correct paperwork has to be filed, called a certificate of authority and additional filing fees must be paid in that state.
Points to Consider
- State filing fees for each LLC under consideration
- State filing fees to foreign qualify in the home state
- Ongoing fees imposed on corporations and LLCs by the state under consideration
- Ongoing fees imposed on foreign corporations and LLCs
James Simango, CPA
http://www.ustaxcentral.com
