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> Information provided on this site is for general guidance only and is often simplified. Actual IRS procedures are complex, and taxpayers should obtain professional assistance or use IRS sources for complete information.


Summary Of Corporate Forms A summary of the tax characteristics of different corporate forms.

Domestic International Sales Corporation The DISC was used in conjunction with Foreign Sales Corporations, but has been reborn following 2003 legislation.

Limited Partnership Limited Partnerships are often used for investment-holding purposes, and have 'pass-through' status for domestic partners.

Limited Liability Company LLCs are treated as partnerships unless they opt to be treated as corporations.
"S" Corporation "S" Corporations have a 'pass-through' tax treatment.


Summary Of Corporate Forms

This section describes US organisational forms which can be used in tax-effective structures, both for US residents and for non-residents. Although US taxes are hard to escape for residents, there are many ways of legally minimising tax; and for non-residents, taxation is entirely avoidable in most investment situations.

A corporation is normally a 'C' corporation (taxable under Chapter C of the Tax Code). Certain types of smaller corporation can be taxed under Chapter S of the Tax Code, which allows a 'pass-through' of income for tax purposes. These are known as 'S' Corporations.

Limited Liability Companies and partnerships that carry on no business in the US and derive no income from any sources within the US do not need to file a US federal tax return. The US can thus be a conduit for foreign business or foreign investments - the LLC allows the foreign business or foreign investor to use many of the United States' tax treaties. However, an LLC that elects to be treated as a corporation does need to file a return.

Confidentiality remains good in the US, although the Treasury Department is continually trying to breach banking secrecy and professional confidentiality. Unlike Europe, the US has no OECD- inspired 'know your client' rules; companies and trusts can be formed discreetly and no record of ownership or directorship is filed with the Government. Non-resident ownership of a US bank account incurs no taxation, although the Treasury Department fought a long-running battle over the sending of information on interest payments from such accounts to the individual's home tax authorities.

Procedures for the formation of companies, partnerships and trusts vary somewhat between states. As an example, to incorporate in Delaware, a favourite location for companies, or to form a limited liability company, a certificate of incorporation (for a corporation), or a certificate of formation (for a limited liability company) needs to be filed with the Division of Corporations, along with the appropriate fees. The corporation’s by-laws or limited liability company’s membership operating agreement are not needed for the initial formation process when filing these articles of incorporation.

Most states permit the formation of a 'close' ie privately owned corporation, which is eligible to elect “S” Corporation status with the IRS. However, a close corporation cannot have any non-resident aliens as shareholders.

A Limited Liability Company acts in many ways like an “S” Corporation, but can have non-resident shareholders, as can a Limited Partnership. However, a Limited Partnership generally offers less protection of personal assets than does an LLC; neither of them is as robust as a trust in asset protection terms.

Summary Of Corporate Forms A summary of the tax characteristics of different corporate forms.

Domestic International Sales Corporation The DISC was used in conjunction with Foreign Sales Corporations, but has been reborn following 2003 legislation.

Limited Partnership Limited Partnerships are often used for investment-holding purposes, and have 'pass-through' status for domestic partners.

Limited Liability Company LLCs are treated as partnerships unless they opt to be treated as corporations.
"S" Corporation "S" Corporations have a 'pass-through' tax treatment.

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New On The Network Today

This feed is published daily with selected new or updated content from across our network. For a list of network sites, many of which feature daily news, see below.

 
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01/09 International Privacy and Security, Investors Offshore special feature
31/08 Lowtax Belize, annual update
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23/08 Don't Forget Doha, And I Don't Mean The Tennis, Jeremy Hetherington-Gore blog entry
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18/08 New PBTG Editor Column, Caroline, PBTG editor
17/06 Lowtax Cayman Islands, annual update
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13/08 Jurisdiction Special Focus: Antigua and Barbuda, Investors Offshore special feature
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11/08 New PBTG Editor Column, Caroline, PBTG editor
10/08 Brazil Cuts Import Tariffs, Tax-News.com
09/08 Ukraine Tax Code Published, Tax-News.com
06/08 France Plans Reform Of Property Tax Credit, Tax-News.com
04/08 New PBTG Editor Column, Caroline, PBTG editor
02/08 Islamic Finance - The New Mainstream Alternative, Investors Offshore special feature
28/07 New PBTG Editor Column, Caroline, PBTG editor
27/07 UK Launches Raft Of Tax Consultations, Tax-News.com
26/07 Fat Tax On The Menu , Jeremy Hetherington-Gore blog entry
23/07 Sarkozy Seeks 'Fiscal Convergence' With Germany, Tax-News.com
20/07 Singapore Base For Tuvalu OIFC, Tax-News.com
15/07 St Vincent & The Grenadines, Investors Offshore special feature
13/07 Tax- News.com Jersey Review 2010-2011
12/07 Goodbye To All That, Jeremy Hetherington-Gore blog entry
06/07 Hong Kong Full PBTG Guide, added to Personal Business Tax Guide
28/06 Lowtax Dubai, annual update
18/06 Singapore - Another Hong Kong?, Investors Offshore special feature
15/06 Swiss Parliament Approves UBS Agreement, Tax-News.com
08/06 Dubai Full PBTG Guide, added to Personal Business Tax Guide
04/06 Lowtax Panama, annual update
01/06 Lowtax Luxembourg, annual update
03/03 Personal Business Tax Guide, PBTG, has launched!
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Lowtax Network Sites
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Tax News: Global tax news, continuously updated through the day.
Investors Offshore: The independent offshore and alternative investment guide for expatriates and the globally aware investor. Sponsored by HSBC Bank International.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
NEW! Personal Business Tax Guide: Providing essential tax news and information on business for contractors, entrepreneurs, professionals, small businesses, artists, sportspersons and entertainers.
 

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