Re: Setting up companies for tax benefits
 

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Hi all,
Looking for a little information about setting up Corporations in order to take advantage of tax breaks and decrease personal liability and risk involving a higher risk investment.
I was recently approached by a family friend regarding an investment oppurtunity. The deal is that I would be investing a lump sum of money with a group who will be selling a product using the little kiosks you see in the middle of the mall. My initial investment would cover much of the start-up costs involved. I would be making money based on the profit of the business, with the group I am investing in taking care of all marketing, sales and management of the kiosk.
Assuming I have done all my due diligence regarding the group I am investing in and the product they are selling, what other steps do I need to take so that I don't get screwed by taxes and limit some personal liability. I am wondering what type of entity I need to start, and what the nature of this entity would be.
Any help would be greatly appreciated.

-Echo

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I'm not aware of any scheme where incorporation in the same tax jurisdiction confers any tax advantage. It is sometimes neutral or disadvantageous. In any case, if you're investing in someone else's business, there needs to be some sort of legal structure, implied or explicit (and this would be part of the due diligence) and that's for you (plural) to decide, but not for you (singular) to decide. Most likely, it's up for them to come up with a scheme that you're comfortable with.