2   LEGAL FORMS OF BUSINESS ORGANIZATIONS

2.1 IN GENERAL

A number of business forms are available to carry on business in the United States. The following briefly outlines the basic choices among the forms of business organizations available for use in the United States in general. Although each state in the U.S. has adopted its ownLawsAnd regulations governing the for-mation and operation of the various forms of business entities, the fundamental laws do not vary significantly from state to state. The effect of choosing one form overAnotherMay, however, be significant. Tax and liabil-ity considerations are usually the most important factors in determining the most appropriate form of business entity, as tax and liability consequences vary according to the type of entity. No matter what form is chosen, establishing a business in the U.S. is comparatively quick and inexpensive. The decision whether to utilize a particular form should be made in consultation with an attorney. The following business forms are the most commonly used

2   The legal forms of business organization

2.1 Summary

In America is suitable for a variety of business forms. The following brief the basic form of enterprise organization America commonly used. Although America states to manage all kinds of enterprises and the establishment of the business according to the laws and regulations of the state, but the basic law has no significant difference. However, different enterprises in the form of the effect may be very important. In determining the most appropriate form of enterprise, tax and duty is often the most important factor to consider, because the tax consequences and responsibilities according to the enterprise of different types and different. No matter what form is chosen, relatively speaking, in the America established enterprise fast, low cost. Before deciding whether to use a particular form, it shall seek legal advice. The following American common form of enterprise:

2.2 SOLE PROPRIETORSHIP

The sole proprietorship is the most basic business form. In a sole proprietorship, the business and its owner are the same legal person, i.e. one person owns all the assets of the business and is solely liable for all the debts of the business. In other words, there is no limited liability insulating the owner from his business. The regulation of sole proprietorships is minimal. In certain circumstances additional licenses may be required, for example, a restaurant selling alcohol to its consumers will be required to obtain a liquor license

2.2 Owned enterprises

The sole proprietorship is the most basic form of enterprise. In the enterprise, enterprises and investors are of the same legal subject, namely the person with all assets of the enterprise, and enterprise debt alone bear full responsibility for all. In other words, owned enterprises does not exist will be limited to distinguish the investors and enterprises. The government management of the wholly foreign-owned enterprise is the least. Under certain circumstances, additional licenses may be required, for example, the sale of liquor to customers hotel must apply for a licence to sell wine.

Advantages. Simplicity is the greatest advantage of a sole proprietorship. They require no legal action and are consequently easy to start. There are generally no formal requirements for operating in this form, other than registering the true name of the business owner if the business is conducted under a trade name. Manage-ment of the business is left solely to the owner. Especially very small businesses with no initial capital benefit from the initial savings

Advantages: simple is the biggest advantage of a sole proprietorship. The establishment of wholly foreign-owned enterprises do not need to take legal action, it is easy to start. By dividing the firm business need to register the investor's real name, the general enterprise management no formal requirement. Enterprises with independent management by investors. The lack of small enterprise start-up capital especially can save the initial capital from.

Disadvantages. The owner is personally liable for the debts and obligations of the business to the full extent of his personal property and assets. The capital of the business is limited to the cash and credit of the owner

Disadvantages: corporate investors in his personal property and assets, debts and obligations of the business to take full responsibility. Enterprise capital to investors' cash and credit.

Tax Considerations. The proprietorship itself is not a taxable entity. The sole proprietor reports items of income and expense of the business on his personal tax return. The sole proprietor 's business and personal income tax returns can be combined and business losses are easily deducted from personal income 

The proprietorship itself is not a taxable entity. Owned enterprises investors in their personal tax returns filing corporate income and expense items. Investor's business and personal income tax returns can be combined, and business losses can be deducted from personal income.

2.3     PARTNERSHIPS

2.3.1     In General

A partnership, as the name implies, is a business entity in which two or more co-owners join efforts. In many aspects, the general partnership is a counterpart to the sole proprietorship

2.3 The partnership

2.3.1 Summary

As the name implies, a partnership is two or more than two people total cooperation business entity. In many ways, the general partnership is similar to the - owned enterprises.

2.3.2     General Partnership

In General. A general partnership is a contractual Association of two or more persons or entities to operate a common enterprise and to share in the management, as well as in the profits and losses of the enterprise. Basically, a general partnership is a proprietorship with more than one owner. A written agreement among partners is not mandatory but is often desirable. The partnership agreement generally includes provisions governing the sharing of profits and losses, duties of the partners, and prescribes ways for joining and leaving the partnership

2.3.2  A general partnership

Summary: general partnership enterprise is a contract between two or more than two of the individual or entity to associates, partners, management, joint management, share profit and loss sharing. A general partnership is basically has more than investor owned enterprises. Although the law does not compel a written agreement between the partners, but the partners usually conclude a written partnership agreement. The partnership agreement generally shall share profits and losses, partner, occupation and withdrawal way obligation clauses.

Advantages. As with a proprietorship, flexibility and simplicity of formation and operation are the significant advantages of a general partnership. In addition, the combined capital and credit of each partner is available for the partnership. Tax consequences are "passed through" to the partners. A partnership may specially allocate items of income, loss, deduction or credit to different partners, subject to certain restrictions. One partner may be authorized to act on behalf of the partnership

Advantages: like sole proprietorships, enterprises set up and operation flexibility and simplicity is the significant advantages of a general partnership. In addition, the partnership can use all the partners' capital and credit. The partners shall share the tax. Subject to certain restrictions, a partnership may, loss of income, deduction or credit projects specially assigned to different partners. A partnership enterprise may authorize a partner on behalf of the partnership enterprise.

Disadvantages. Each partner is jointly and severally liable for all debts and obligations of the partnership. Thus, the partners have unlimited liability and should the partnership 's funds not suffice to cover the liabilities of the partnership, creditors can reach the personal assets of the partners. Further, each partner may be bound by the acts of each of his partners. The ability of a partner to sell or transfer his interest in the partnership is often restricted

Disadvantages: each partner all the debts and obligations of the partnership shall bear joint and several liability. The partners shall bear unlimited liability to the partnership, the partnership failed to repay debts, creditors can reach the partner's personal property. In addition, each partner is affected by the action of other partner constraints. The partners sell or transfer the rights and interests of the partnership is usually restricted.

Tax Considerations. A partnership is not treated as a separate legal entity for U.S. income tax purposes and is, therefore, not itself subject to tax, although it must file an information return reflecting the receipts and expenditures of the business. Instead, the partners are taxed directly on their proportionate share of the income earned by the partnership (and are entitled to use their proportionate share of partnership losses to offset other income) whether or not that income is actually distributed to the partners. Special allocations of items of income and expense to partners may not be given effect for tax purposes unless those allocations comply with complex regulations which generally require that tax consequences relate to actual economic consequences. Partnerships are generally required to withhold U.S. tax from distributions to foreign partners

Tax considerations: Although America partnership must be submitted to reflect the balance of information returns, but the partnership is not a separate legal entity, and it does not need to pay taxes. No matter the partnership income is actually distributed to the partners, the partnership per capita according to its proportionate share of the income tax of enterprises directly, and has the right to use its share in the partnership losses to offset other income. Effects of special distribution of no tax partner to make payments on the project, unless the allocation in accordance with generally require complex provisions of the tax consequences and the actual economic results. Partnerships usually need from the allocation to foreign partners USA withholding tax.

General partnerships in Georgia. Georgia partnerships are governed by the Uniform Partnership Act of 1914 According to the Act, all partners have an equal right to participate in the business. In other words, each partner has an equal vote in the management of business. Generally, a simple majority is all that is required, but certain decisions, such as changes to the partnership agreement, admission of new partners, the sale of the business, etc., require unanimity. All partners are considered to be agents of the partnership and consequently each partner is fully liable for his fellow partner 's actions. These default provisions of the Act may be changed by entering into a partnership agreement

General partnerships in Georgia: Georgia partnerships are governed by the Uniform Partnership Act of 1914. According to the law, all partners have equal right to participate in the business. In other words, each partner has an equal right to vote on the management of enterprise. Usually, in addition to some matters need all the partners in accordance with the accident (such as the change of the partnership agreement, admission of new partners, the sale of enterprises), general by a simple majority of the can. All partners are regarded as an agent of the partnership, therefore, each partner is the action of other partners shall bear full responsibility. The default provisions of the act may be amended in the partnership agreement.

2.3.3     Limited Partnership

General. A limited partnership has two different kinds of partners, general and limited partners. The general partners exercise and have unlimited joint and several liability for the entity's debts and obligations. The limited partners, on the other hand, have no personal liability for the debts and obligations of the business (except to the extent of funds contributed by them to the business and have virtually) no powers of management. Under the laws of many states, a limited partner looses limited liability if he participates in the management of the partnership. In contrast to this majority rule, in Georgia, a limited partner does not become liable for the obligations of the limited partnership by participating in the management or control of the business

2.3.3 A limited partnership

Summary: the limited partnership has two different types of partners, namely the general partners and limited partners. The general partner debts and obligations of the partnership shall bear unlimited joint and several liability. The limited partners, the debts of the business and the duty not to take personal responsibility (the responsibility is restricted to its investment to the enterprise), and do not enjoy the actual control. Under the laws of many states, such as limited partners to participate in the enterprise management, can no longer assume limited responsibility, to assume unlimited liability. But Joe's rule to the contrary, the limited partners are not due to participate in enterprise management or control and the debts of the partnership shall bear unlimited liability.

The creation and operation of limited partnerships are governed by the various state limited partnership acts. Creation of a limited partnership requires the filing of a certificate with the appropriate state or county official, naming the general partners and disclosing certain other information, and the payment of a nominal fee. Unless otherwise agreed to in the partnership agreement, a loss of general partners dissolves the partnership. Loss of Limited partners has no effect on the partnership

The establishment and operation of applicable state limited partnership law of limited partnership. The establishment of limited partnership enterprise shall submit proof to the relevant officials, specify a general partner and other specific information disclosure, and the payment of a nominal fee. Unless otherwise stipulated in the partnership agreement, the lack of general partners will lead to the dissolution of the partnership. But the lack of a limited partner has no effect on the partnership.

Georgia limited partnerships are governed by the Revised Uniform Limited Partnership Act. It is required, that limited partnerships be registered with the Secretary of State

Georgia limited partnerships are governed by the Revised Uniform Limited Partnership act. The law requires a limited partnership be registered with the Secretary of state.

Advantages. A limited partnership enjoys most of the advantages of a general partnership, with the additional benefit that individuals who invest as limited partners are insulated from personal liability for the obligations of the partnership. In some states, such as Georgia, limited partners are permitted to participate in the management of the partnership without loosing limited liability

Advantages: limited partnership has the most advantages of a general partnership, another advantage is, a limited partner partnership obligations not to take personal responsibility. In some states, such as Georgia, a limited partner can participate in the enterprise management, and still limited liability.

Disadvantages. A limited partnership is subject to formal statutory requirements not placed on general partnerships. In addition, the general partners retain unlimited liability for the debts and obligations of the partnership. The ability of a general partner to transfer his interest is usually restricted, while a limited partner's interest is usually made transferable by provisions of the limited partnership agreement. Furthermore, limited partnership interests are generally deemed to be "securities," rendering the offer and sale of such interests subject to federal and state securities laws

Disadvantages: compared with a general partnership, limited partnership enterprises need to meet the statutory requirement for formal. In addition, the general partner enterprise debts and obligations still assume unlimited liability. The ability to transfer the rights and interests of the general partner is usually restricted, while a limited partnerThe interest is usually made transferable by provisions of the limited partnership agreement. A limited partnership interests are generally deemed to be "securities", the offer and sale of federal and state securities laws.

Tax Considerations. Like a general partnership, a limited partnership is not treated as a separate taxable entity. For income tax purposes, the general partners of a limited partnership are treated identically to the partners of a general partnership. However, unlike general partners, the limited partners are subject to certain limitations on their ability to utilize partnership losses to offset other income

Tax considerations: like a general partnership, limited partnership is not a separate taxable entity. For income tax purposes, general partner in a limited liability partnership and the partners of a partnership enterprise. However, unlike general partners, limited partners use partnership losses to offset other income subject to certain restrictions.

2.4     CORPORATIONS

In General. The Corporation is the most prevalent form of organization for businesses of any size in the U.S. A Corporation is a business, owned by shareholders and registered with the Secretary of State. The formation and operation of a corporation are governed by state statute. The process of incorporation is a more complicated process than starting a partnership. Corporate existence commences with the filing of the Articles of Incorporation, which contain the name of the Corporation, a description of the authorized capital stock and certain other identifying information. The business and affairs of a corporation are controlled by its board of directors, who are elected by the holders of the corporation's stock. The board of directors selects the officers of the Corporation, who oversee the day-to-day operations of the business. Shares of common stock represent the basic equity in the Corporation, although there may be classes of stock with widely varying preferences, limitations and relative rights

2.4 Limited by Share Ltd

Summary: Limited by Share Ltd is any scale American enterprises the most popular form of business organization, is the shareholder owned and registered with the Secretary of state company. The establishment and operation of Limited by Share Ltd applicable state law. The program is more complex than the opening partnership, the articles of association of the company began to submit articles, including the name of the company, a description of the authorized capital stock and other specific recognition information. The company's operating and transaction control board of directors elected by shareholders. The board of directors selected senior management oversight of the company's daily operations. While there may be various with different priorities, constraints and Related Rights shares, but the basic rights and interests of ordinary shares on behalf of the company.

Advantages. The primary advantage of operating in corporate form is the insulation of the corporation's shareholders from personal liability for the debts and obligations of the corporation. The Corporation has its own legal identity, separate from its shareholders and it may acquire, own, and sell property, maintain legal actions, and do everything a person can do. Generally, interests of shareholders can be transferred with relative ease. Corporations typically have perpetual duration and their existence is unaffected by the death or withdrawal of a shareholder. Use of the corporate form may facilitate the raising of outside capital, subject to compliance with securities laws. Furthermore, the use of the corporate form may insulate non-U.S. business persons from taxation in their home country of income earned in the U.S. (although that income would probably be taxed when distributed to the businessperson in the form of a dividend) and may facilitate meeting requirements for U.S. immigrant or nonimmigrant V ISAS

Advantages: the main advantages of Limited by Share Ltd that shareholders not to personal liability for the debts and obligations. The company has legal status and shareholder separation, can obtain, possession and sale of property, legal action, and do everything a person can do. Usually, shareholders may transfer relatively easily. The company will usually permanent continuous operation, and its existence is not affected by the death or withdrawal of a shareholder influence. In compliance with the securities law, Limited by Share Ltd model for raising external capital. Moreover, foreign businessmen can also avoid its source in USA income to the respective tax (although the income distribution in dividends may be taxed), and is convenient to meet American immigrant or non immigrant visa requirements.

Disadvantages. Utilizing the corporate form involves a considerable amount of formality and paperwork, even in the smallest corporations. Minutes should be kept and annual reports and separate franchise tax returns filed. A registered office and registered agent must be maintained. The corporation may be required to qualify to transact business if it desires to conduct business in a state other than its state of incorporation. Shares of stock are "securities" and as such are subject to federal and state regulation of their offer and sale. Public corporations must comply with burdensome periodic reporting requirements and bear the corresponding increase in record keeping, legal and accounting expenses. Additionally, public corporations may be subject to attempts by third parties to acquire control of the corporation against the will of management

Disadvantages: the use of the model, even the smallest Limited by Share Ltd, requires a considerable amount of formality and paperwork. Keep record of the meeting, annual reports and independent franchise tax returns submitted, must have a registered office and registered agent. May need to obtain a license company operating in the non. Company to "securities", so its distribution and sale are subject to federal and state management. The public corporation must comply with the burdensome periodic reporting requirements, but also in record keeping, legal and accounting the corresponding increase in the cost of. In addition, the public corporation may also suffer from third party for breach of the management of the company will control the acquiring company.

Tax Considerations. A Corporation is a separate taxpaying entity with its own tax rates. Taxes are to be paid on federal and state levels. Federal corporate income tax rates presently range from 15% to 35%. There is an element of double taxation in the corporate form if the corporation pays dividends on its stock. Income to the corporation is taxed at the corporate level and, if dividends are paid to shareholders, such dividends are taxed again as income to the individual shareholders. Dividends paid to foreign shareholders are generally subject to U.S. tax withholding, although the rate of withholding may be reduced from the usual 30 percent level pursuant to the terms of an applicable tax treaty. In many small corporations, double taxation can be avoided by electing "(see below Corporation S?" status which essentially eliminates the), entity-level tax and taxes corporate income at individual rates at the shareholder level, similar to the taxation of a partnership

Tax considerations: Limited by Share Ltd is a separate taxable entity for the particular tax, according to federal taxes and state tax rate. Commonwealth Corp income tax rate is currently 15% to 35%. Company dividends, there is double taxation of corporate income situation, to levy corporate income tax, and the distribution of dividends to shareholders as shareholders of the income tax will be again. Assigned to the foreign shareholder dividend withholding income tax to America, however according to the provisions of the relevant tax treaties, withholding rate may be lower than the general rate of 30%. In many small Limited by Share Ltd, you can select "S? Limited by Share Ltd" (see below) to avoid double taxation, type the company basically exempt from corporate tax, corporate income to shareholders and personal tax, tax is similar to the partnership enterprise.

 "S corporations". "S corporations" combine traits of general partnerships and corporations. The advantage of "S corporations" is that profits are only taxed once when dividends are distributed to the shareholders. Because of the requirement that all shareholders be U.S. citizens or permanent residents to qualify for "S corporation" status, "S corporations" are not viable entities for foreign investors

 "Limited by Share Ltd" S ": S Limited by Share Ltd" combining the features of general partnership enterprises and Limited by Share Ltd, the utility model has the advantages of distribute dividends to its shareholders at the time of its profits are only taxed once. All the shareholders of S Limited by Share Ltd must be American citizen or permanent resident, therefore does not apply to foreign investors. 

2.5 LIMITED LIABILITY COMPANY

In General. Another structure for the conduct of business operations in the U.S. is the limited liability company. The limited liability company (LLC) is a form of unincorporated business organization that essentially is a hybrid between a corporation and a partnership. LLCs are very flexible and can be set up to allow entrepreneurs to emulate the governance characteristics of a corporation

2.5 Limited liability company

In America another business model is a limited liability company. Limited liability company is unincorporated business organization, is essentially a mixture of Limited by Share Ltd and partnership. Limited liability company is very flexible, governance characteristics of company business owners can emulate the Limited by Share Ltd.

The relationships between the members of a LLC are governed by the operating agreement. The creation and operation of LLCs are governed by each state 's statute which specifically provides for LLCs. While Georgia state law provides some default provisions, custom provisions in the operating agreement can replace them. The LLC is confined to businesses whose interests are not publicly traded. The uses of a LLC range from small start-up businesses to public corporations that otherwise would form a subsidiary to enter into a joint venture to carry out a particularly risky project. Further, the members of the LLC can be other businesses. If not otherwise agreed to, loss of a member dissolves the LLC

Members according to the operating agreement of limited liability company, the creation and operation of the specially formulated for state laws. Georgia law provides some default provisions, but can be custom provisions in the operating agreement to override the default clause. Limited liability company limited to its interests are not publicly traded companies, applicable to small businesses, is also applicable to join in the joint venture project specific risk Public Corporation (if not take the form of a limited liability company, the public corporation may also set up a subsidiary). Furthermore, its members can be other businesses. Unless otherwise agreed, leaving a member will lead to the dissolution of the company.

Advantages. The benefits of an LLC stem from its hybrid status. All of its members have limited liability, as in a corporation. Thus, its members enjoy limited liability and the debtors of the LLC cannot reach the member 's personal assets to satisfy the company' s debts. The LLC is treated as a pass-through entity for tax purposes, like a partnership. Unlike a limited partnership members can, and frequently do participate in the management. Also, LLCs are not bound by requirements for management by a board of directors. Another benefit of the LLC structure is that the numerous restrictions on "S-corporations" are not applicable to LLCs. As a result, corporations and non-resident aliens may be members of LLCs without jeopardizing the availability of favorable tax treatment

Advantages: the advantage due to its combination. As a Limited by Share Ltd, all members are limited liability company, and the creditors could not recover the members of the company's private property. Like a partnership, limited liability company in the tax as tax intermediate entity. Unlike a limited partnership, members can and often participate in the company management. But, not by a board of management. Another advantage is that many about "S- Limited by Share Ltd" restriction does not apply to limited liability company. Therefore, the Limited by Share Ltd and the non resident aliens may be its members without affecting its tax treatment.

Disadvantages. Although numerous states have adopted legislation creating LLCs, not all 50 states have done so. To date, 47 states and the District of Columbia have enacted LLC legislation. The LLC is still a young business concept; the first LLC statute was enacted 1977 in the State of Wyoming, Georgia followed suit in 1992 Therefore, the law continues to develop. As LLCs become more prevalent, the legal environment will become more certain

Disadvantages: Although many states have enacted the establishment of a limited liability company legislation, but not all of the states have so. So far, 47 states and the District of Columbia promulgated the law of the limited liability company. Limited liability company is still a young business concept; in 1977 Wyoming first LLC statute was enacted, Georgia followed suit in 1992. The law is still developing and improving. With the limited liability company is becoming increasingly popular, the legal environment will become more clear and specific.

Tax Considerations. For U.S. tax purposes, members of the LLC are treated like partners; profits and losses are carried on their individual income tax returns. Therefore, members of an LLC avoid the double taxation of income necessary in corporations. However, certain tax jurisdictions may elect to treat LLCs as a corporate entity and deny pass-through tax treatment to the LLC members

Tax considerations: for tax, members of the LLC as partners, profits and losses are reflected in their individual income tax returns. Therefore, its members can avoid double taxation Limited by Share Ltd inevitable. However, certain tax jurisdictions can be regarded as a corporate entity and refused to be transferred to the member tax. 

2.6 LIMITED LIABILITY PARTNERSHIPS

The LLP is a popular business structure for professional firms, but is largely irrelevant for foreign investors in the United States

The LLP is defined by general partnership law and LLP statutes. Unlike a limited partnership, all members of the LLP enjoy limited liability. Typically, LLP members retain liability for contract-debts but enjoy limited liability with respect to tort-debts of the business. The formalities and prerequisites for forming a limited liability partnership are far greater than the formalities in forming a limited or general partnership. Like a general partnership, a LLP is not treated as a separate taxable entity

2.6 A limited liability partnership

Limited liability partnership is the form a business professional firms like, but basically has nothing to do with the foreign investors in American.

Limited liability partnership is defined by general partnership and limited liability partnership enterprise law. Unlike a limited partnership, limited liability partnership enterprise all the members are limited liability. Usually, LLP members retain the contract liability for tort, but enterprises limited liability debt. Formally established a limited liability partnership and the precondition of far more than the limited partnership enterprise or a general partnership. Like a general partnership, limited liability partnership is not a separate taxable entity.

2.7 BRANCH OF A FOREIGN CORPORATION

Many foreign corporations choose to do business in the United States simply through a branch office

2.7 The branch of a Foreign Company

Many foreign enterprises simply by setting up branches in America business.

Advantages. By operating as a branch office of a non-U.S. Corporation, many of the organizational burdens associated with the other forms are avoided

Advantages: through the branches in USA operation non America enterprises established, can avoid other forms of many of the company's organizational burden.

Disadvantages. Operation as a branch subjects the foreign parent company to liability for the debts of its branch

Disadvantages: total foreign companies must assume responsibility for the branches of the debt.

Tax Considerations. A foreign corporation with a U.S. branch generally is taxed in the same manner as a U.S. Corporation on income derived from the branch's U.S. operations. However, under the normal rules of taxation applicable to U.S. corporations, a U.S. branch of a foreign corporation would have a tax advantage over a foreign owned U.S. Corporation conducting the same business operations. That advantage results because the earnings of the U.S. corporation would be subject to taxation in the U.S. at the standard corporate rate and would be further subject to taxation again when distributed to the foreign shareholder as a dividend. Although the U.S. earnings of the U.S. branch of a foreign corporation would also be subject to U.S. taxation at the applicable corporate rate, internal distributions of the after tax profits would not constitute dividends subject to the second layer of tax. To eliminate that disadvantage for foreign-owned U.S. corporations, the U.S. has imposed a branch profits tax under which Amounts deemed to be the equivalent of dividend distributions by the branch to its home office are subject to U.S. tax at the 30 percent rate generally applicable to dividends. Like the withholding tax imposed on dividends, the branch profits tax is subject to reduction or elimination pursuant to the terms of applicable tax treaties

Tax considerations: as with America enterprises, in American branch of the Foreign Company generally derived from the branch in USA business income tax. However, according to the normal tax rules that apply to Usa Inc, Foreign Company America branches of the same business than foreign owned Usa Inc enjoy certain tax advantages. The reason is that, Usa Inc income in the America in accordance with the standard tax rate, and the distribution of dividends to foreign shareholders will again tax income. Although the Foreign Company USA branches according to the corresponding corporate tax rates paid USA tax, but the internal distribution of income after taxes do not need to pay the second levels of Taxation of dividends. In order to eliminate the foreign owned Usa Inc adverse, American mandatory branch profits tax, will be assigned to the branch of domestic corporation profits as dividends, and according to the generally applicable to the dividend tax rate of 30% American tax. As the withholding tax imposed on dividends, the branch profits tax can also be in accordance with the relevant tax deduction or exemption clause "of the treaty.