I have an incorporated Canadian translation company and need to have a US company in order to participate in US tenders. I also have a property in Florida. Where would it be best to incorporate a company in the US. I will not be hiring directly any employees, just subcontracting. Would it be best to have a LLC or a corporation. I have no partners. Thanks
Patrice,
Let’s break your case into two parts:
1) You need a US entity to participate in tenders for the services provided by your Canadian company, and
2) You want to move your Florida investment property (I presume, owned by you personally) under a separate entity.
So there are 3 questions that I see:
1. What type of entity is best for (1)?
2. What type of entity is best for (2)?
3. Should you use one entity for both activities?
In my opinion LLC would be the best type of entity to satisfy both 1. and 2. This is a less formal type of entity, that can be used for wide range of business activities. Especially in the real estate investment world LLCs are most commonly used as holding entities for Real Estate assets.
However, what you should also consider is the state of formation. For your investment property this would have to be either Florida LLC or an LLC formed in any other state and then registered in Florida as Foreign Entity. For your translation business you would have a much wider choice of states (in fact you can technically pick any state), since you don’t really have any physical presence in any of those states. States like Wyoming or Delaware could potentially be best to choose for this type of business activity.
With that being said, if you are looking to save on formation fees and later maintenance you could use the Florida LLC for both businesses, which brings us to question #3. It is always recommended to put each investment property or an asset in its own LLC to protect it from other investments that could fall victims to law suits. However, since your translation business is not an investment property (and as such cannot really be “lost” to your property related law suit) the only thing you should consider is how risky it is to have your investment property next to your translation business (in other words, what are the chances for your translation business to be badly sued?).
My conclusion is this: you probably could put both the business and the property under a Florida LLC. I would however strongly recommend to get a second opinion from an asset protection or a business attorney.
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