Both branch offices and subsidiaries are separate locations where business is conducted from the main office of the corporation. The major difference between these is that a subsidiary is a separate legal entity, while a branch office is the same entity as the parent, or larger, corporation.
Although branch offices are sometimes a good idea for domestic companies, it is usually a better idea for foreign corporations to setup US subsidiaries to conduct business in the US for both tax purposes and liability issues.
Subsidiaries can be formed by purchasing a controlling interest in an existing company or by creating the company itself. The most common forms of subsidiaries are corporations or LLCs. The parent company has a duty to the subsidiary to promote the subsidiary’s corporate interest, act in its best interest, and to maintain a separate corporate identity. If the parent company fails to meet these requirements, the courts will view the two entities as one for liability purposes.
**Remember, if you are not currently conducting business in Florida and you want to setup a branch office or subsidiary, you must register to do business in Florida.**
If you are interested in setting up US subsidiaries or registering to do business in Florida, contact Boyer Law Firm’s business law attorneys today.