I need a consultancy on one small but delicate issue. We have registered a C-Corp in Delaware. There is a decision of the board of directors...

Question

I need a consultancy on one small but delicate issue.

We have registered a C-Corp in Delaware. There is a decision of the board of directors where a CEO is assigned.

Now our accountancy wonders whether we should register the CEO as an employee and put him on Payroll or not.

CEO is not a US resident and it makes this issue more difficult.

So actually what we need to understand is: whether we should register a C-Corp CEO as employee and put him on Payroll, and if yes, how should that be done if the CEO is not a US resident?

Thank you!

Answer

The answer to your question is a business decision, not a legal one, except to the extent it affects taxation and possibly employee benefits, and an accountant can advise you on those issues as well or better than an attorney. Executive compensation is up to you. Do you want to pay him a salary or not, compensate him with stock or other non-cash compensation or not? Those are business decisions, not legal ones. As far as not being a U.S. resident, if you put him on payroll, that is only relevant again to payroll taxes. Talk to an accountant.