Incorporating in the USA

[The Soup Dragon]

Have any members opened an office or subsidiary in the US?
We have the chance to set up an office in California which we would own 80% of.

Not sure whether to go LLC or C Corp.
The US 20% shareholder would run the business on a day to day basis.

SD

 

[MikeJ]

We were a licensee of a Californian firm. As it often does, looking in to another set of regimes from the outside looks horrendous. You're going to need your own lawyer as well as the company one, and the 20% shareholder will want theirs too. I can give you the name of the people our licensor used if you want, he seemed reasonably competent.

 

[Frank the Insurance guy]

Hi @The Soup Dragon,

Many of our client's that have set up in the US have set up an LLC, which seems to meet their needs (some are multi-million £ co's.

However, they all have a specialist accountant and legal advisor in the US - the legal requirements vary from state to state, so you need to make sure you are meeting the local requirements. A local specialist is best for this.

In terms of Insurance, as it is a subsidiary of UK company, you can add the US co to your Professional Indemnity, Cyber, Directors & Officers/Management Liability policy - expect the premiums to increase, but they will still be cheaper than a separate policy in the US.

However, you will need a local Insurance policy for any staff/premises etc, including Workers Compensation cover. You may be able to extend your UK Public/Products Liability to include the US co, however it is often easier/cheaper to arrange this locally in the US alongside the Workers Comp and other regulatory insurance covers.

 

[Codeunkie1992]

If your US partner is handling day to day operations, an LLC can offer flexibility, but a C corp is usually better if you are planning to scale or bring in investors later. It is worth considering tax implications and control structure carefully before deciding.