Setting Up a New Business / Deciding on the Business Structure
Asked by: Ash Kothari - 7 August, 2013
Hi,
I am a Canadian citizen living in Toronto and planning to start a drop ship online store in US with my wife as a second partner (who is also a Canadian citizen).
Since I will be marketing to customers in US and all my suppliers are based there only, I would like to know the right business structure / setup for me. I also plan to start stocking and delivering products from fulfillment centers in USA after sometime.
Should I register my business in Canada or form a LLC in USA in a tax free state like Delaware or a sales tax free state like Wyoming.
What would be the better option?
I need your advice.
Thank you.
Hi,
I am a Canadian citizen living in Toronto and planning to start a drop ship online store in US with my wife as a second partner (who is also a Canadian citizen).
Since I will be marketing to customers in US and all my suppliers are based there only, I would like to know the right business structure / setup for me. I also plan to start stocking and delivering products from fulfillment centers in USA after sometime.
Should I register my business in Canada or form a LLC in USA in a tax free state like Delaware or a sales tax free state like Wyoming.
What would be the better option?
I need your advice.
Thank you.
Answered by: Robert Kowalski - 7 August, 2013
Ash,
Having a company in the U.S. for US based business is probably a better idea than running the business under Canadian company.
As far as taxes go I would like to refer you to two questions, answered by our tax expert Wray Rives:
- Income tax question (foreigners): http://www.incorporationanswers.org/thread/1747/Start-up-with-multiple-foreign-and-domestic-partners.html
- Sales tax question (drop-shipping based business): http://www.incorporationanswers.org/thread/1640/US-Tax-for-Canadian-Corporation.html
Ash,Having a company in the U.S. for US based business is probably a better idea than running the business under Canadian company.
As far as taxes go I would like to refer you to two questions, answered by our tax expert Wray Rives:
- Income tax question (foreigners): http://www.incorporationanswers.org/thread/1747/Start-up-with-multiple-foreign-and-domestic-partners.html
- Sales tax question (drop-shipping based business): http://www.incorporationanswers.org/thread/1640/US-Tax-for-Canadian-Corporation.html
