About Delaware LLC's
Why they are safe and tax effective investment vehicles
The LLC (limited liability company) has been used for many years as an effective business tool for both mainland US businesses and offshore entities. As part of an international structure employed for asset protection and legal tax minimisation, it can be an invaluable tool.
There are a number of States within the US that can provide LLC's but the region of choice still remains the State of Delaware and the Delaware LLC, not only because of the very effective tax franchise, but because of the unique features of the Delaware LLC Act.
The State of Delaware has a State Constitution and 31 "Titles" which make up the laws of Delaware. Title 6 relates to Commerce and Trade and as part of Title 6, there is Chapter 18 which is the Limited Liability Company Act. To view the relevant laws of the State of Delaware, please press on the relevant button at the bottom of this page.
The Delaware LLC has the tax advantage of having a flat rate of State tax imposed of $200 per annum, payable on the first day of June each year. In relation to US Federal Tax the Delaware LLC is regarded as and treated as a partnership. With the US tax system being based upon citizenship and operation of business, if the members of the Delaware LLC are not US tax payers and the LLC does not conduct any business in the US then they have no US tax liability imposed upon them. That does not mean that the members may not have a tax liability for distributions from the LLC in another jurisdiction, but that is another matter.
The other benefit of the Delaware LLC is the ability to create what is called a series. A series within a Delaware LLC is in effect a company within a company that limits and quarantines the assets and liabilities of that series from any other series within the Delaware LLC and even from the Company itself. The literal effect being that the members of a series could be involved in say trading and the contributions allocated to the trading, belong only to the members that have a contribution in the trading series. If the trading performs very well and makes profits, then the trading series and corresponding members receive all those profits. Likewise, if the trading was to make a loss, then only the contributions paid by the members of the trading series and the assets held by the trading series could be used to pay those losses - no other asset of the company or of any other series could be accessed by any creditor of the trading series.
All members of Bullion Plus LLC and Bullion Vault LLC have created for them a unique and separate series, when they become a member of Bullion Plus LLC or Bullion Vault LLC. No contribution of any member of Bullion Plus LLC or Bullion Vault LLC is related to any other members contribution and each member operates with their own individual series.
There are many possible options with the Delaware LLC, some may be useful in some jurisdictions some may not. But the options are available and the Delaware LLC is a very useful and practical business vehicle that may provide immense benefits to those people that use one or participate in one.