Bossopolis
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- Jan 13, 2015
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To my fellow Canucks and anyone who can answer these questions, please do so and share your insight.
I operate an Ecom biz with sales to US based customers only. IT is getting enough sales where I need to start considering the legal aspects of this.
1) When should a Canadian incorporate in the US?
2) If I wish to create a sub brand, and be able to sell it separately down the road, do I create an entirely new LLC or can I register another one under the first?
3) Can anyone shed light on the tax implications, or direct me to an accountant who specializes in Canadians doing biz in the US?
4) Does the business still need to be registered in Canada?
5) Any other useful info?
I spoke with someone who sets up LLc's in Delaware, and has done so for Canadians. I imagine it is a simple process. Benefits I gather are the obvious limited liability, and secondarily makes selling the business down the road much more simple. It is not easy to incorporate in Canada as well or as cheaply is my further understanding.
1) Very rarely should a Canadian business incorporate in the USA if you do not have a physical location there. You are just asking for more headaches. First question to ask yourself is "why" ? What benefit will you get ? In your case I do not see any reason for an LLC in USA. I just see a lot of pain, paperwork, taxes and hassle. Incorporating in Canada will help protect your personal assets in case of a lawsuit, tax flexibility, perpetual existence, etc... If you do not have many assets I would just stick with a sole proprietorship until your profits / assets justify it. Keep it lean and mean if you can.
2) Do not need to create an LLC just for branding a product line. All you need to do is "Trademark" the name to protect it. First of course check to make sure no one else owns the name... If possible also check to see if the domain name is available for the "sub-brand".
CANADA http://www.cipo.ic.gc.ca/app/opic-cipo/trdmrks/srch/bscSrch.do?lang=eng
USA http://www.uspto.gov/trademark
3) If you export a lot to USA, at year end you may get a GST tax credit. Example: If I import $10,000 of product, pay 5% GST when it comes to my customs broker, then sell all of it back to a USA buyer(s) then I get that GST credit back at year end. From personal experience, once you start asking the government to send you GST back and it amounts in the $$$$ then there is a VERY HIGH probability they will ask to audit you. (From personal experience)... but don't freak out, just have your books in order and all is cool... get a good bookkeeper & accountant, keep all your receipts / records organized. But do expect an audit if you are asking them for large sums of money, governments are funny that way
4) You MUST register GST / IMPORT # if you intend to import products commercially. Your customs broker will require it. You do not have to register for GST if your sales are under under $30,000 / year and are not importing commercially.
5) Read, check for local MEETUP group for networking, create a Mastermind group, read some more,
http://www.canadabusiness.ca/eng/page/2856/
Good luck to you !
From a fellow Canuck...