Will ADR owner enjoy same benefit as common shares holders
The essential difference b/n ADR and a common share is that ADR do not have Voting rights. Common share has.  There are some ADR that would in certain conditions get converted to common stock, but by and large most ADR's would remain ADR's without any voting rights. If you are an individual investor, this difference should not matter as rarely one would hold such a large number of shares to vote on General meeting on various issues. The other difference is that since many countries have regulations on who can buy common shares, for example in India an Non Resident cannot directly buy any share, hence he would buy ADR. Thus ADR would be priced more in the respective market if there is demand. For example Infosys Technologies, an India Company has ADR on NYSE. This is more expensive around 1.5 times the price of the common share available in India (at current exchange rate). Thus if you are able to invest with equal ease in HK (have broker / trading account etc), consider the taxation of the gains in HK as well the tax treatment in US for overseas gains then its recommended that you go for Common Stock in HK. Else it would make sense to buy in US. As far as I know, with ADRs you're essentially trading by proxy -- a depository bank is holding the actual stock certificate, and must provide you with the actual stock on demand. The one thing that is different is that in the event that the ADR is terminated (which sometimes happens with mergers), you have a limited period of time to sell the shares -- otherwise, you get the actual foreign stock that you may or may not be able to trade without transferring to a different broker. One other issue you may face is when the company announces poor financial results and begins to tank, you will not be able to sell until the US market open and could incur a lot of pain. I would say you should invest in the market that is more convenient for you, bearing in mind that if you buy ADRs you may have some things to keep an eye on depending on certain events as mentioned by duffbeer703. So, if you are investing with an account in the U.S., go with the ADRs as that will avoid some currency conversion hassles and possible exchange rate issues.  I am not certain, but I have a feeling that would also make it easier for you to keep the taxman happy.
I have an example of a trade I made some time ago.  By entering the position as a covered call, I was out of pocket $5.10, and if the stock traded flat, i.e. closed at the same $7.10 16 months hence, I was up 39% or nearly 30%/yr. As compared to the stock holder, if the stock fell 28%, I'd still break even, vs his loss of 28%. Last, if the stock shot up, I'd get 7.50/5.10 or a 47% return, vs the shareholder who would need a price of $10.44 to reflect that return. Of course, a huge jump in the shares, say to $15, would benefit the option buyer, and I would have left money on the table. But this didn't happen. The stock was at $8 at expiration, and I got my 47% return. The option buyer got 50 cents for his $2 bet.  Note, the $2 option price reflected a very high implied volatility. You may also want to consider Delaware and Nevada as possible corporate homes.  They are common choices for out of state corporations.  You may find that they are better options.   Will earnings prior to forming the LLC have to be claimed as self-employment income? If so, would it be easier to wait until the next calendar year to form the LLC? Earnings after forming the Limited Liability Corporation (LLC) will probably have to be claimed as self-employment income.  See How LLC Members Are Taxed for more discussion.  In particular, read the section on self-employment taxes:   The current rule is that any owner who works in or helps manage the business must pay this tax on his or her distributive share (rightful share of profits). However, owners who are not active in the LLC -- that is, those who have merely invested money but don't provide services or make management decisions for the LLC -- may be exempt from paying self-employment taxes on their share of profits. The regulations in this area are a bit complicated, but if you actively manage or work in your LLC, you can expect to pay self-employment tax on all LLC profits allocated to you. As I read it, you actively work in the LLC, so it is unlikely that you can avoid paying self-employment taxes.  So it shouldn't make any difference when you officially start an LLC.  You'll have to pay self-employment taxes before and after creating the LLC regardless.   If you don't want to pay self-employment taxes, you may want to consider forming a Subchapter C corporation.  They don't have the same tax structure as Subchapter S corporations or LLCs.  You would be paid some kind of wage, salary, or commission and the corporation would pay the employer's side of the payroll taxes.   Note that Subchapter S corporations and LLCs exist because they usually pay less in tax than Subchapter C corporations do.  Even including the self-employment taxes that you owe.   A CPA should be able to guide you in making these decisions and help you with setup.   The one time that I started a corporation, I just paid a few hundred dollars to a service and they filed the paperwork for me.  That included state fees and notice costs.  The CPA probably has a service association already. I actually re-read the article.  The shares are voting, but the CEO made his shares have 15 votes each.  This is much worse than non-voting shares.  Non-voting shares usually come with other benefits.  Zynga has basically made the votes of the common shares useless without giving any benefits.  Total scumbag company, which I'm sure won't be around in 10 years. Preferred stocks are, err... Preferred. The whole point of preferred stocks is that they have some preference over other classes of stocks (there may be more than 2, by the way). It can be more voting rights, more dividends or priority on dividends' distribution (common with VC investments), or priority on liquidations (in bankruptcy, preferred stock holders are ranked higher than common). Many times initial or critical investments are made on preferred terms, and the stocks are converted to common when certain thresholds are met. Obviously all these benefits require a premium on the price. ~~Dividends~~  edit:  Sorry; misunderstood your question.  Subsidiary losses. If NI is -$1000 and you own 80%, then your adjustment for year 20XX is $-200. If the accumulated minority interest is &lt;$200, the end balance of non-controlling interest at 20XX+1 would be negative.   I can also imagine a scenario due to negative value of the sub's net identifiable assets using partial goodwill method. "There are basically two different markets for ADRs and ordinary shares. 1) The American market, 2) the ""local"" market. The following is not true for most stocks in ""developed"" markets. But it is often true that the American market (for ADRs) is far more liquid than the local market for ordinary shares of a developing country. For instance, there was a time when the ADRs of Telmex (Telefonos of Mexico) was the fifth most traded stock in the world, after Exxon (before its merger with Mobil), IBM, Microsoft, and A T&T, meaning that it was easy to trade with low fees on the NYSE. It was much harder and slower to buy the local shares of Telmex in Mexico, on the Mexican exchange. Also, the accompanying currency transactions were harder to execute with the ord, because you have to settle in local currency and pay an FX commission. With the ADR, the exchange rate is ""built"" into the (dollar) price, and you settle in dollars." Assuming you purchased shares that were granted at a discount under the ESPP the 50% exemption would not apply. It's pretty unusual to see a US parent company ESPP qualify for the 110(1)(d) exemption, as most US plans provide for a discount Is the parent company's common stock public?   If not, then there will be absolutely no pressure from everyone liquidating at the same time. If so, consider the average daily volume of transactions in the parent company's stock.  Is it much greater than the volume your 10k co-workers will have to liquidate?   If so, I wouldn't expect much of an impact from all liquidating at once. Any other situation, you are probably right to be a bit worried about simultaneous liquidation.   If this was my case, I'd probably submit a limit sell order so as to try and pick out a high for the timing of my liquidation, and lower my limit vs fair value as it got closer to the expiration of your ability to hold the parent company stock.