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Lend Home Address for Friends' Company

Lend Home Address for Friends' Company

Lend Home Address for Friends' Company

(OP)
A friend co-founded a company with a couple
of his other friends. The company is head-quatered
at Cayman island and has branch offices at both U.S.
and China. The friend lent the address of his house
to the other founders to register the company and
his house address is also used as the address of
the U.S. branch office.

Later the friend decided to quit the entrepreneuar
endeavor and his question is whether he should withdraw
his home address from the company's registration.
 
What are the liabilities or risks if his home address
is used in the company's registration and various other
company related contracts, activities, ..., etc. ?

Thanks a lot!

Ki

RE: Lend Home Address for Friends' Company

This sounds like a question for a good international law attorney.

RE: Lend Home Address for Friends' Company

Only a lawyer can answer the liability issues. Is any business conducted or was conducted from his address? There are not any issues with keeping it at this address that were not already there before. But me personally, would definately not allow the address to be used in the future, especially if I have no association with the company.
I can't imagine any liability issues coming out of this although there may be other legal issues, corporate tax (varies with states), etc.   

RE: Lend Home Address for Friends' Company

(OP)
Thanks Buzz,

My friend conducted some software development
work at the address before the company was founded.
Shortly after the company was founded he decided
to quit. I guess he should request cancellation
of his address.

Just wondering if my friend quits now will he
be responsible for the future corporate tax,
corporate debt, ..., etc., just because his address
is used ?

RE: Lend Home Address for Friends' Company

I'm not sure it was legal for him to use that address to begin with.  If he was a sole proprietership and had no employees, that would have been fine... I don't know about being a branch office, though.

RE: Lend Home Address for Friends' Company

I dont think there was any problems with using this address while he was doing software from here. When he quit doing this is when there may be some legal issues, I do not know.
As far as any future tax issues, this is another question I can not answer. However, morally or legally, the address should not continue to be used. At the very least, continued use of this address, in this particular state, may cause more tax liability for the company by way of any corporate tax in his particular state (sound right?).
I would definately get his address off from any company documents, etc to avoid future head aches from the IRS or state tax collectors. Whether there is any tax liability, legally would not matter much to me but the potential for future legal issues/headaches would be enough for me to not use my address.
As far as any debts (other than taxes), I know for sure he would not be liable unless he is named as a partner (if LLC, LLP, etc) or owner of the company.

RE: Lend Home Address for Friends' Company

If your friend isn't involved any more, why should his address be used. Changes of address is a responsibility of the company and probably should never be  a home address. My companies address is my accountants office address, that way I can move when-ever I like or leave the company without address hassles.

He should use a companies lawayer and straighten out the company address issue before it becomes a legal problem.

sc

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