Looking to start a new business in the US the key points are:
-The company will sell a software product that is currently produced and distributed in Europe and has been for the past 10 years.
-50% plus owner is a European National & resident that is the CEO of the company that develops the software and distributes it in Europe. I would be a 50% or less partner
-The start-up money ~ $50,000 would come from Europe. My investment is my time
-The US LLC (probably Nevada) will be basically a "sales agent" for US distribution; setting up resellers and doing some, but not much direct sales.
-The software shipment is a CD that would be shipped from Europe; and probably purchased with a PO Faxed to European HQ by the buyer (if this makes sense) or it could be FAXED to the Nevada LLC and the Navada LLC would transmitted to Europe and be paid a "commission" Either way the European company would pay a US entity for the sale (My guess the Nevada LLC). (The software in fact could be shipped from anywhere)
- I am a California resident and will work alone in the beginning and latter may "hire" one or two independent contractors.
-The Nevada LLC is being considered to have the European National/resident be subject to only federal tax. I would pay federal and California taxes on money I earn if we make this work. Once we make some sales I/the meLLC would be paid money (commission from Europe)
-If this works the European company would Buy/acquire the LLC and make it a subsidiary of the European company in two/three years.
The questions are - should I set myself up as a California LLC and have this LLC be a member of the Nevada LLC and contract with me as a sales agent on a commission only compensation plan or maybe even take a few dollars in draw if sales are close? I would pay Fed,Social Security and Cal taxes on any income. Does this cause a Calif Nexus problem
OR Is it better to have me as individual join the Nevada LLC and contract with (me as a LLC ie. me LLC) as a sales agent and be paid a commission. Does this cause a CA Nexus problem?
OR Should we just have a Nevada LLC and I would be paid as a LLC member and pay all applicable taxes Calif, Fed, Social security ect. Does this cause a California Nexus? Thus making the Nevada LLC subject to CA tax? the vast majority of sales if not all will be outside of California. Could be anywhere in North America and maybe even in South America, if we get lucky.
So, How best to set up this business to take advantage of US/Calif/Nevada tax regulation and not expose ourselves to taxes that are not necessary.
Are there any questions I am not smart enough to have asked. Any recommendations BEFORE we set this company up?
-The company will sell a software product that is currently produced and distributed in Europe and has been for the past 10 years.
-50% plus owner is a European National & resident that is the CEO of the company that develops the software and distributes it in Europe. I would be a 50% or less partner
-The start-up money ~ $50,000 would come from Europe. My investment is my time
-The US LLC (probably Nevada) will be basically a "sales agent" for US distribution; setting up resellers and doing some, but not much direct sales.
-The software shipment is a CD that would be shipped from Europe; and probably purchased with a PO Faxed to European HQ by the buyer (if this makes sense) or it could be FAXED to the Nevada LLC and the Navada LLC would transmitted to Europe and be paid a "commission" Either way the European company would pay a US entity for the sale (My guess the Nevada LLC). (The software in fact could be shipped from anywhere)
- I am a California resident and will work alone in the beginning and latter may "hire" one or two independent contractors.
-The Nevada LLC is being considered to have the European National/resident be subject to only federal tax. I would pay federal and California taxes on money I earn if we make this work. Once we make some sales I/the meLLC would be paid money (commission from Europe)
-If this works the European company would Buy/acquire the LLC and make it a subsidiary of the European company in two/three years.
The questions are - should I set myself up as a California LLC and have this LLC be a member of the Nevada LLC and contract with me as a sales agent on a commission only compensation plan or maybe even take a few dollars in draw if sales are close? I would pay Fed,Social Security and Cal taxes on any income. Does this cause a Calif Nexus problem
OR Is it better to have me as individual join the Nevada LLC and contract with (me as a LLC ie. me LLC) as a sales agent and be paid a commission. Does this cause a CA Nexus problem?
OR Should we just have a Nevada LLC and I would be paid as a LLC member and pay all applicable taxes Calif, Fed, Social security ect. Does this cause a California Nexus? Thus making the Nevada LLC subject to CA tax? the vast majority of sales if not all will be outside of California. Could be anywhere in North America and maybe even in South America, if we get lucky.
So, How best to set up this business to take advantage of US/Calif/Nevada tax regulation and not expose ourselves to taxes that are not necessary.
Are there any questions I am not smart enough to have asked. Any recommendations BEFORE we set this company up?