Canadian partnership registering LLC in U.S.
Asked by: Anthony S - 8 November, 2012
Hello,
I am wondering if a partnership in Canada can register/own a LLC in the U.S. for online business purposes? The idea being is that all profits from the U.S. LLC will be distributed to the Canadian partnership as a pass-through and taxes are filed/paid for members of the partnership in Canada?
Thanks!
Hello,
I am wondering if a partnership in Canada can register/own a LLC in the U.S. for online business purposes? The idea being is that all profits from the U.S. LLC will be distributed to the Canadian partnership as a pass-through and taxes are filed/paid for members of the partnership in Canada?
Thanks!
Answered by: Wray Rives - 11 November, 2012
Anthony,
Yes, a Canadian partnership can own a US LLC. Ownership however does not control if tax is due on US operations of the business. You will need to consider US taxation of non-residents aliens and if the profits earned in the US are what is known as income effectively connected to operation of a US business.
It is not uncommon for an online business to avoid US taxation, but there are a number of specific factors that are unique to every business which you will have to consider. A US based tax professional can help you with that determination.
Anthony,Yes, a Canadian partnership can own a US LLC. Ownership however does not control if tax is due on US operations of the business. You will need to consider US taxation of non-residents aliens and if the profits earned in the US are what is known as income effectively connected to operation of a US business.
It is not uncommon for an online business to avoid US taxation, but there are a number of specific factors that are unique to every business which you will have to consider. A US based tax professional can help you with that determination.
