There are many U.S. LLC questions to ask before formation when you expand your e-commerce business to the U.S. It is not common that most are unaware of these costly mistakes they have already made. Why does this happen?
It appears that forming a U.S. LLC online is simple
Several online entity formation companies give you this impression. Unfortunately, they leave out all the complicated yet, vitally essential parts to get you to do a filling.
We don’t approach business this way, so we work mainly with more successful 6, 7, and 8 figure sellers. Successful sellers realize there is much more involved than filing the LLC online and obtained an EIN with the IRS.
Here are the key U.S. LLC questions you should be asking before, during, and after a U.S. formation:
- If you form a U.S. LLC, how should it be taxed? I have read about four options, but the S corporation option does not apply to my situation. Which one is best for my situation?
- How do I know if the operating agreement is correct for my situation? When do I need to file form 8832?
- I read situations where my foreign entity needs an EIN because it will own the U.S. LLC. Is that true or not?
- If so, what happens if my start date on my SS4 application was in prior years? I heard the IRS has huge fines for some forms if late.
- Who should be the manager vs. the member of the LLC?
- What are my U.S. tax responsibilities if I am engaged in a U.S. trade or business? What do I need to do to avoid a permanent establishment?
- Do you have a tax firm that can file protective tax returns in the U.S.? Are they on the same page with these different scenarios?
- What are my U.S. sales tax responsibilities if I only sell on a marketplace such as Amazon?
- What happens if I want to sell from my Shopify store from the same legal entity as my Amazon business?
- What impact does that have on my sales tax requirements?
- If I use Taxjar will they take care of everything for me regarding sales tax, and what happens if I am behind on sales tax or don’t have a U.S. bank account (FYI, Taxjar is a partner of ours).
- What happens if I was selling on Amazon before my previous foreign entity and now want to update my Amazon account with my new U.S. entity regarding sales tax?
- What do I need to do with my new address on my U.S. company to activate my Amazon account with my new company name?
- How do I update my tax settings with my new U.S. entity in Amazon or other marketplaces?
- How do I transfer income from my U.S. LLC to my foreign company (to avoid unintended tax consequences)?
- When do I owe U.S. taxes? I have read that I only need to file forms 5472 and 1120 proforma, but when is that not the case?
- I don’t want to find out that I had other U.S. tax forms to file, and a U.S. tax treaty does not protect me.
- Where does the ownership show up for the U.S. entity?
These questions are the tip of the iceberg of the filing process
Some of our clients would rather have a clear understanding of these strategy questions before forming the U.S. company, which we cover in a 30 or 45-minute strategy session. Learn more about those paid options here.
Another group of our clients likes working with NCP because they know they can get started and realize they don’t have to clarify these critical questions, especially around which state and entity are best. After all, we include our U.S. entity packages a very detailed video with the best recommendations for most situations plus summary slides to form your U.S. entity and your tax responsibilities.
All follow up and updates throughout the year are part of our service, which separates us from everyone else. Our team and I will review every order submitted to make sure your choices all make sense before we file the articles and fax your SS4 application to the IRS.
Forming your U.S. legal entity is the substantial first step with the foundation of how you will be taxed in the U.S., especially the filing of your SS4 application after your entity is formed, is where the real work starts to make sure all the i’s are dotted and t’s are crossed. Below is our U.S. complete formation checklist, which provides an overview of the U.S. LLC formation steps.
Yes, there are a lot of “low-priced” LLC options online. Still, if any, very few take a comprehensive approach to all these critical issues for a foreign e-commerce seller looking to expand into the U.S., Our support team is first class. We have partners that are fully vetted if additional support is needed on the back end.
If you have U.S. LLC questions about our process, service, or level of support to help you expand, let’s schedule a call and a time to chat at the button below to see how we can help you with your expansion process and make sure you are protected. If you decide to work with NCP, we will keep you update on essential changes with U.S. tax changes, sales tax issues, or other areas to make sure you are protected.
For example, we send out recent updates to our clients about Amazon only being able to pull inventory 18 months back and impact sales tax calculations. We have new updates going out on Amazon and new insurance requirements and a resource, plus updates on digital taxes, those with federal trademarks that are still not protected, and much more.
All follow up and updates throughout the year are part of our service, which separates us from everyone else. If you are looking for clarity on our fees, services with our U.S. LLC formations, please click the link below to schedule a call with our team. There is no fee to speak with a team member. Click here to schedule a call with our team.