Corporate Law
Corporate law: Company & company formation
The firm advises on all corporate law issues. The firm focuses on companies in the USA and Germany (see country focus). Attorney Galaniuk assists with US corporate law including US company formations and US company formations.
Galaniuk Law advises you on the choice of the appropriate corporate form and assists in the formation of your company. In addition, GL prepares all incorporation documents for you and takes care of the existing reporting obligations. Whether you need a shareholders' agreement, articles of association, bylaws, resolutions, subscription agreements or shareholder loans, Galaniuk Law drafts all contracts for you to a high standard. GL works out the most tax-efficient solutions possible and, if necessary, consults specialized tax advisors from our network. GL will also assist you in setting up your chosen capital structure, whether it is equity or debt capital, or the use of shareholder loans or convertible bonds. GL is also happy to assist you with restructuring.
The firm assists with the formation of companies in the USA, in particular in Florida and other US states.
The first legal transactions of a company are necessarily concerned with the selection and determination of the best possible legal form, taking into account the needs of the specific company. A lawyer can be instrumental in this decision; he can then set up the chosen corporate form (with the exception of the sole proprietor) and ensure that all corporate constitution and articles of association documents are prepared and signed. At this stage, increased attention is required, especially when business partners are setting up a company together and it must be ensured that all eventualities are taken into account from the outset. In this context, the documentation includes, for example, the shareholders' agreements, the rules of procedure and all related necessary resolutions, contracts, profit and loss transfers and control agreements.
Further information on US corporations and their financing can be found here “US corporations”.
Further information on US corporate law and US registry law and the cross-references to US agency law when concluding commercial contracts in the USA can be found here: “Register law in the USA: Is there really no commercial register in the USA?”
LIMITED LIABILITY COMPANY (LLC) IN USA
The Limited Liability Company (LLC) under US or US state law is a popular form of company in the USA. The LLC can also be a good option for German entrepreneurs as a US subsidiary. The decision or choice of company form usually depends on known factors. This usually involves ensuring limited liability, optimization from a tax perspective, low formation and administrative costs and, where applicable, anonymity. Some factors are briefly explained below to make it easier to make the right choice.
The LLC is a hybrid company form because it is treated as a corporation with limited liability under company law on the one hand and as a transparent company or partnership under tax law on the other. The LLC is only liable with its balance sheet assets. Partners of the LLC (with a few exceptions) are not liable for the debts and liabilities of the LLC. Only in special circumstances that would result in injustice for an injured party is piercing the corporate viel permitted.
Under tax law, the LLC is treated as a transparent company. If the LLC has only one shareholder, the shareholder even only prepares one income surplus statement in the USA for tax purposes (so-called disregarded entity). The LLC can be particularly advantageous for German entrepreneurs who are prepared to take up shares in the LLC as private assets, i.e. the members of the LLC are then natural persons. Under the US-German double taxation agreement, it is then possible to limit taxation of profits to one level only, namely in the USA. In Germany - subject to a type test - only a progression proviso is applied.
If the LLC is treated as a partnership for tax purposes in the USA, the participation of a German company as a shareholder in the LLC may be questionable for tax purposes. In this case, the corporation may make more sense as a company form in the USA.
The LLC is also easy to set up and maintain. It is formed in one of the 50 US states and is then subject to the law (company statute) of that state. Depending on the US state, the incorporation entry is made within 24 to 48 hours of registration. This gives the LLC legal capacity. Formation can usually also be done online or by fax at low cost. It is not necessary to go to a notary. The formation is then completed by concluding articles of association (operating agreement) in the internal relationship. In the absence of articles of association, the statutory provisions apply. In contrast to the corporation in the USA, LLC law provides for fewer formalities for the proper management of the LLC. One aspect of the risk of liability, namely the disregard of formalities, is even mitigated by law (see §304(b) Model Revised Limited Liability Company Act) in the LLC.
As a relatively new form of company, the LLC has proven itself in the USA over the last 20 years. The LLC may also be suitable for German companies as a US subsidiary. A law firm specializing in this area, such as Galaniuk Law, can provide information on the details.
