Advice on a Canada-USA partnership

[princesultan]

Hello,

Looking to get into business with an established company in the States and start up a new corporation in Canada. At the moment we're looking at a 50-50 split. Before going this route, does anyone know if there are any issues (legal, tax, other) that make going this route complicated since we're doing this across borders. Ideally, I'd set up a new corporation in Canada and then the person in the States would buy shares of this company. Also, I'm not sure if this would constitute a franchise or not, but it looks like I'd be putting in at least half of the money to start this up and I would replicate their business model, although some areas won't be the same.

I'm at the VERY early stages of this, so I'm at the point where I can shape and mold things...

Any info is appreciated as I have no experience with this!

[vangogh]

This is hardly my area of expertise, but I wanted to make sure you got an answer in the hopes that others who know better will then find the thread.

I would think having a company that crosses borders does make things more complicated. I don't know that it's necessarily a bad thing, but I would imagine your business would have to deal with legal and tax laws from both countries. Since in your case the U.S. company would be the parent company it's probably them that would have more of the complications, but again this isn't my area of expertise so I'm just guessing on this.

If you're setting things up where you're an independent corporation and the U.S. company is buying shares you might not be considered a single business entity. However in that case I can't see how your business could be considered part of a franchise. If you register as your own corporation I would think you'd be considered 2 independent companies and probably wouldn't have to deal with any of the complications of a single international business. You wouldn't gain any of the benefits of one either.

Sorry I can't offer anything more concrete. I mostly want to make your thread more visible so those that can provide more have a better chance of seeing your thread.

[princesultan]

thank you for your response. i would prefer to set things up as an independent corporation, so that route may be less complicated.

any other info is appreciated.

[vangogh]

Is there any reason why you can't set things up independently? Would that mean less cooperation from the U.S. company? I do think setting up independently will be less complicated.

[princesultan]

independently as in incorporating the company in canada and then having the guy in the US buy shares in that new corporation? i think that's what i'm leaning towards although right now things are very preliminary, i'd need to see what he wants as well.

[vangogh]

Makes sense. That definitely seems like the simpler option. Hopefully someone who can answer your questions will show up. Feel free to keep chatting back and forth to keep the thread active. If you have any other questions, maybe I'll be better able to answer those.