ReXKern >> UK >> Secondary founder

“Secondary founder – Delaware (USA)– very similar to SMBA.”

What is a Cell (company) of the American Delaware series LLC (Limited Partnership)?

Definition

We use this type of companies that make use of “substitute founder/secondary and primary founder” if you choose this service from us. This means that you together with your SMBA company also get a Cell of an LLC. This “Cell” becomes the co-owner of your SMBA together with yourself, or 2 cells can own your SMBA entirely.

It has never been the intention that you need to fully understand the concept behind our Series LLC just as most of us don’t fully know the Scandinavian laws regulating local companies, but we have for the sake of good order made this description which we hope you can benefit from.

Limited Partnership

To understand how a Series LLC functions you need firstly to understand what type of a company a “regular” limited partnership is.

Am LLC (Limited Liability partnership) or “limited partnership” is a type of company we know in all parts of the world, e.g. in Denmark as a SMBA, in Scotland as an LP (limited partnership). In Sweden the closest you can get to an LLC is “Ekonomisk förening”, whereas this type of company is not known in e.g. Norway.

An LLC has no partners who are personally liable, as opposed to the “Kommanditselskab” used in Scandinavia, which has partners who are liable with all their capital.

An LLC (Limited Liability Partnership) is a company with limited liability. LLC is although it is trading in reality a kind of personal association yet with a degree of a commercial firm’s activities (exactly like with an SMBA).

Variation – Series LLC

If you choose to buy a “primary or secondary founder” for your Danish company we will establish a Cell of an American Series LLC for you

Series LLC is a hybrid (variant) of the above mentioned company type, and you can establish this type of company in 6 American states, hereunder Delaware (with which we work) or e.g. in California.

A series LLC is a unique form of American company where the parent company acts as an umbrella organization for a number of cells which it issues certificates for. Each cell is a unique company and each cell gets its own name followed by “_ ,ReXKern LLC, cell XXX” where XXX refers to the number of the cell.

Why this complicated system?

It is all about economy and protection of your privacy.

A Cell of an American Delaware Series LLC gives you as owner a chance to control a legal entity at an unheard low price.

Where conventional foreign companies like offshore companies and other American companies typically cost several thousand Euros and has annual administrative costs, here you do not have the usual annual costs for accounts and franchise taxes, and cells can be established far cheaper than conventional companies.

Security and privacy

You are assured separation from other Cells of the same company so that debt, liabilities, commitments, defrayed expenses and contractual obligations can only be enforced against the assets in the individual cells and not against the assets in the company in general or other cells.

The Corporation Act (Section 6/C § 18 -215) in the State of Delaware has a special provision enabling you to establish autonomous cells each with its separate owner and separate capital. All EU countries respect the American Corporation Act.

Privacy is another advantage of the Delaware series LLC. Only the name of the company and the local agent in USA are known to the state, and thus not the name of the owner. This gives owners and managers of Cells a considerable degree of anonymity.

Application

Delaware series LLC has been used in various connections like:

• Container leasing where each container is a separate legal entity (one container = one cell)
• Hire businesses where each tenancy is separated out in separate entities
• As owner of intellectual property (royalties)
• The IT trade where a company splits up several projects into Cells
• For real estate investors with several properties where a Series LLC isolates each of them in separate cells and for real estate development where each cadastral number is an autonomous legal entity
• For small enterprises with different articles or services where new products can be launched or separate services can be split into cells
• Trailer parks or camping sites
• Franchise enterprises

There are many other applications for these cells, including owning shares in investment trusts.

Power of procuration

All contracts, acts, notes etc. should be signed in the name of the cell. You have as owner of a cell no power of procuration or authority to bind the company or to sign for the whole of the LLC company. The director or the ultimate owner of Series LLC (the umbrella organization) cannot bind the individual cells.

Each individual cell may not operate from the company’s main address but must operate from your own address. Thus you cannot use ReXKern LLC’s address for your own business.

The founding

ReXKern gives each individual Cell its own name and any name may be used. You take up the post as director and owner of each series. You get a certificate for each cell, which shows your name as owner and director.

Running expenses

Even if cells can have their own separate assets, take on separate liabilities and have different managers and members a series LLC pays only one registration fee and submits only one income tax return each year for the founder members.

No annual report needs to be submitted for each series, but ReXKern collects an annual fee of EUR 100 for each cell certified.

Note that the cell may be liable for tax in the region where it is used, which is why we advise against using the cell in actual commerce.

For further information on LLC companies we refer you to the state of Delaware homepage http://delaware.gov/.