Need some advice on business formation

[boiling.h2o]

Hello everyone,

I'm glad to have found this wonderful forum filled with useful information and nice & knowledable people. We'd deeply appreciate if someone can provide us with some assistance on forming a business for our venture.

An American friend of mine and I are thinking about starting an online retail business with two Chinese friends. We will take preorders of our products online and ship the orders directly from our supplier in China.

After some research, we are considering registering a Delaware member-managed LLC because of the relatively low franchise fee and simple formation process. But we have some pending issues:
- From my understanding, since none of us lives in the US (my friend and I are both living in China at the moment), technically our business will not have a tax nexus in any of the states. Does that mean we will not need to collect sales tax?
- What should we write in the the business address box when we file the certificate of formation? If I put down my parents' address in Cali, would that potentially create nexus even though I don't live there?

Thanks in advance!

[smanaher]

Boiling.h20,

While I’m sure there are some experienced people on this forum that may be able to answer your questions, you are better off speaking to an attorney about these matters. The last thing you want to do is make a legal mistake. It can cost you a lot more in the long run.

You might also be able to find answers to your questions here,

http://www.usa.gov/Business/Incorporate.shtml

Best,

Shawn

[mazz]

If you are earning over $100,000 a year, then a corporation is worthwhile. It can also protect you from lawsuits, but really are people likely to sue you for something? This depends on your product

[Green Moon]

If you are earning over $100,000 a year, then a corporation is worthwhile.

There is no magic number at which a regular C corporation is better than an LLC taxed as a partnership. It depends on a lot of factors, including taxable income of the members/shareholders and whether the earnings will be retained in the business or distributed. Particularly where at least two of the owners appear to have no connection to the United States and the 2 Americans are residing outside the U.S., there are questions like how much of the income is U.S. source income.

There are no black-and-white answers.