Liability Protection

Being a legal person, a limited liability company is separated from its shareholders, officers and directors. So, if a corporation is sued, it can lose only its own assets, and not the assets of the individual shareholder. The liability of an individual associated with the company is limited to his share in this company. Also, any personal losses of company's shareholder are not the responsibility of the company.

Also, two corporations are even more effective for protection purposes. Many business people find out that with two corporations they can separate their risks and minimize their lawsuit exposure. Putting different assets into different corporations to spread out the risk is like buying very cheap insurance that will protect your assets.

Profits of the corporation are generally taxed at the rate of the jurisdiction where it is registered, and not the country of residence. Thus, establishing companies in low or zero tax jurisdictions is extremely advantageous for shareholders from countries with hight level of taxation.

However, for careful planning and structuring of an offshore corporation it is important to know that payments and profits received by a shareholder or director from the corporation are usually liable to taxation in one's country of residence.

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