Common subsidiary structures
- Wyoming holding LLC + multiple operating LLCs in Wyoming: simplest, all in same state
- Wyoming holding LLC + Delaware operating LLCs: Wyoming privacy + Delaware operating flexibility
- Wyoming holding LLC + state-specific operating LLCs: e.g., one LLC per state where you have real estate
- Wyoming holding LLC + foreign operating subsidiaries: holding controls non-US subsidiaries
Setup process
- Form Wyoming holding LLC first ($397)
- Form each operating subsidiary LLC (typically discounted in multi-LLC bundle)
- Each operating LLC's sole member is the holding LLC
- Each operating LLC has its own EIN and bank account
- Each operating LLC has its own operating agreement (with holding LLC as sole member)
- Holding LLC has operating agreement covering management and member decisions
- Track inter-company transactions on Form 5472 for each LLC
Tax implications
- Each LLC files its own Form 5472 + pro forma 1120
- Inter-company transactions are related-party (reportable on Form 5472)
- Holding LLC consolidates ownership but each operating LLC is its own tax entity
- Distributions from operating to holding are not US-source FDAP (no 30% withholding)
- Each LLC needs Wyoming annual report ($60)