I'm Canadian and living in Canada and I have a professional friend who is American and living in the States. He and I want to start a call center. The operation will be centered around him for sales and I will be in charge of the business aspects. It is currently not possible for us to be in the same location/country. I have experience with putting together a corporation provincially in Canada but I am a little overwhelmed with figuring out what to do in this situation.
-1 owner (myself)
-1 employee eventually growing to 5ish depending on success
-100% commission based salary
-sales will be made using an online virtual terminal like Paypal
-my company will be hired by a bigger company to sell some of their overstock
-I will have no input/control on anything (hrs worked, leads, equipment needed) my friend
does to make sales. I'm only interested in the result.
-Sole proprietor or corporation ?
-International corporation or can I keep it local since it's internet based ?
-Should I hire employees or independent contractors (long term) ?
-Tax issues ?
***Thank you very much***
Do your customers care if your business if American or Canadian?
If not, given your friend being 100% commission, and you being the 100% owner, it sounds like you should register a Canadian corporation, and set up a sales agreement with your buddy. He can be self-employed in the US and can figure out whatever structure works for him there. He invoices you as an individual or as a corporation for his commission (whatever his accountant suggests is best for him). You pay.
It's so cheap and easy to set up and run a corporation in Canada that I would do that rather than sole proprietorship.
This takes care of most of the employment tax issues: you, a Canadian corporation, are invoiced by a US-based contractor (whether individual or corporation). The US-based contractor is responsible for doing things himself for US law. As a Canadian corporation, you typically aren't expected to hire a US-based contractor (if they were Canadian, there would be questions about whether they are really a contractor if they work full time for you).
Get tax advice for the tax issues of selling whatever service you are selling in a local market. Do you need to collect sales tax for a state you are selling in? I don't know. A good accounting firm can answer that.
There is no such thing as an "international" business. Businesses are registered in a country. Businesses can own things, including other corporations (subsidiaries) in another country.
Note: I am an experienced entrepreneur, not a lawyer or accountant