Only own but not manage LLC - advantages, disadvantages?

[bigbite100]

Hello,

lets say someone owns a US LLC but a family member is the director / manager. what advantages / disadvantages regarding tax implications (for the owner and also for the director) does this structure have? many youtube influencers are doing these kind of things, the influencer is just the face but the family member is running the business. I assume they structure it like this not only because the influencer doesnt have enough time for running the business, but for different reasons.

 

[Don]

In many jurisdictions, the central management and control rule applies to foreign incorporated companies: If a company is incorporated in a foreign country and is centrally managed and controlled in another jurisdiction, it is resident for tax purposes in this jurisdiction.

Last edited: Dec 10, 2023

 

[EliasIT]

You will never ever be able to prove to a tax authority that you do not control the company even though it is in another country, unless you have a director and a real office employed in the company and everything looks legitimate.

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[Marzio]

bigbite100 said:
many youtube influencers are doing these kind of things, the influencer is just the face but the family member is running the business
Click to expand...

Could you please point to some of those Youtube influencers? I'd like to see firsthand how they do it.

 

[Don]

EliasIT said:
You will never ever be able to prove to a tax authority that you do not control the company even though it is in another country, unless you have a director and a real office employed in the company and everything looks legitimate.
Click to expand...

What if the company doesn't have a director at all?