Strategy
Delaware LLC as holding company: when this structure makes sense
Holding-company structures separate IP and assets from operating risk. When does this make sense for non-resident founders?
What holding-company structure looks like
Founder forms two Delaware LLCs: Holdings LLC and Operations LLC. Holdings owns IP (trademarks, software, domain names). Operations runs the business and licenses IP from Holdings, paying royalty.
Holdings has minimal exposure to operating liability. Operations has limited assets at risk.
When the structure makes sense
Revenue threshold: typically $500K+/year. Below this, complexity outweighs benefits. Asset threshold: substantial IP value (trademark protected, copyrighted software, valuable patents).
Use cases: SaaS with substantial IP, ecommerce brands with strong trademarks, content creators with extensive intellectual property.
When the structure does not make sense
Bootstrap LLC under $200K revenue: complexity exceeds benefit. CPA fee for two-LLC structure: $1,500-3,000/year vs $500-1,200 single. Transfer pricing documentation adds compliance work.
Most non-resident founders should stay single-LLC until revenue and assets warrant the upgrade.
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