International Business Partner


1

I've finally found someone I wish to extend an offer to as a business partner and make him a part owner in the company, only he's international. The company is an LLC based in the USA and this gentleman is based in Germany (German Citizen). From what I read of business partner agreements, they are relatively informal so I'm hoping there aren't any major road blocks with this. Are there any major hurdles with international business partners?

Partner International

asked Feb 15 '12 at 09:34
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Marco Ceppi
126 points

1 Answer


1

Do you mean to use the term partner? A partnership (in the US) is:

A partnership is the relationship existing between two or more persons
who join to carry on a trade or business. Each person contributes
money, property, labor or skill, and expects to share in the profits
and losses of the business.


A partnership must file an annual information return to report the
income, deductions, gains, losses, etc., from its operations, but it
does not pay income tax. Instead, it "passes through" any profits or
losses to its partners. Each partner includes his or her share of the
partnership's income or loss on his or her tax return.

You state you have a company, is your intent to restructure the ownership of your company to make him a partner or is your intent to have your company enter into a business arrangement with this individual in Germany.

This could have substantial tax repercussions if your intent is to have him as an investor. If you have made a subchapter S election, the you will loose subchapter S status because a subchapter S corporation can not have foreign investors.

As to the formality of your business dealings, yes they can be informal, but that may not be to your benefit.

Structuring a deal like this is a perfect example of where an ounce of prevention can be worth a pound of cure. Take your time and get it right.

answered Feb 15 '12 at 11:44
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Jonny Boats
4,848 points
  • The company is currently setup as an LLC, I suppose what I mean it to bring him on as a part owner of the company, if that makes any difference. – Marco Ceppi 8 years ago
  • Are you sunchapter S? – Jonny Boats 8 years ago
  • No, just an LLC. – Marco Ceppi 8 years ago
  • Then having a foreign investor is probably fine for you. Check with your accountant as there will be additional tax forms to file. – Jonny Boats 8 years ago

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Partner International