Written by Elma Steven | Updated on March, 2024
Key Takeaway
- USA firms include sole proprietorships, partnerships, LLCs, and business corporations.
- The easiest type is the sole proprietorship, in which one person owns and runs the business and is responsible for everything that happens.
- More than 70% of businesses in the U.S. are owned and run by individuals who are also the only employees.
- Setting up a business in the US can take between 4 and 6 weeks if all of your paperwork is in order. Some states, like New York, offer “rush processing,” which means that the process of incorporating can be finished in two to three days. This is, however, possible for an extra cost. (USA Gov).
- Federal Income tax in the USA is 21% (PWC).
- In the US, people who don’t live there can choose between two main types of business entities: the Limited Liability Company (LLC) and the Corporation (C-Corp).
- Since Delaware’s filing fees for LLCs are low, starting a business there is a good deal. The only fees that need to be paid every year are a franchise tax and a registered agent fee.
Documents required to register a company
- Passport copies of all the hired company staff PAN cards, if they are Indian citizens, of all the hired company staff
- Proof of Identity, like a driver’s license or other photo ID card, for all the hired company staff
- Certificate of Incorporation of the structure of the proposed business
- Bylaws of the person applying for the job
- Water and electric bills as proof of residence:
- Electricity Bill Tax Money Sent to Cities
- Bills for water
- Note: The bill can’t be more than two months old.
- Digital signatures of all the employees hired by the company
- Name of the business that wants to join
Source: SBA
Step By Step Process to Register a Business in USA
In the United States, anyone who wants to create a business as a corporation or a limited liability company must take these steps:
Step 1: Pick a business name and make sure it’s reserved
Before applying to start a business in the US, a person must first choose a name for the business they want to set up in the US.
The name that is picked must be unique.
The name can’t sound like the name of another business in the United States.
Once you have a unique name, you can register your IPR using the USPTO’s database.
It will make sure that the Applicant’s planned company is properly registered.
Name Search in the US needs a lot of study.
When it comes to protecting a corporation’s intellectual property rights, US law is very strict.
Step 2: Pick the right type of business structure for your company.
The people who want to start the applicant company must pick a good business plan before it can be incorporated.
These things must be taken into account when choosing a business structure:
Audience in mind
Business activities will be carried out
Income tax Structure of the business company in the state that was picked
The people who are starting the Applicant must decide which type of business structure will help them reach their goals with the activities they want to do.
Step 3: File the Certification Application for the Incorporation of the Company.
It is up to the applicant to get the Certificate of Incorporation from the Secretary of the state in the USA.
There is important information about the application company on the desired diploma, such as
The company’s trade name
The company’s main goal is to do business. The suggested company will do these things.
Picked the official address of the company’s main office or registered office; suggested company’s capital and fee structure;
Step 4: Choose a Registered Agent for the Applicant’s Business
A registered agent is someone or something that is chosen to handle all communications and other questions about the business on its behalf.
He or she is chosen by the State of Incorporation.
In this case, Non-Resident Incorporation needs to choose a registered agent.
He needs to be ready during work hours.
These kinds of organizations can also be trusted to receive and sign papers and answer questions on behalf of the Applicant’s Business.
Step 5: Make the By-Laws that the New Corporation needs.
The Corporation has to write its By-Laws because the US Authority told it to. As the internal rules of the notes for operations, it must govern how the planned business works on the inside.
Step 6: Choose the company’s first board of directors.
Each company that wants to join must choose its own first officers.
Because of this, they need to hold the Corporation’s First Board Meeting.
The directors who were chosen will stay in their jobs until the end of the FAM, which is the First Annual Meeting of the company’s owners.
It’s up to the first leaders to decide if they want to keep their jobs after the time is over.
Step 7: Give the stocks to the company’s shareholders.
Once the Applicant is appointed, his or her business must give stocks to all investors who put money into the business.
Step 8: Get the business licenses you need to run your company in the USA.
According to how its business is set up, the newly formed Company needs to get the right licenses to do business in the chosen US state. Getting the necessary licenses on time is very important. If you don’t, the State Authorities can punish you severely.
A lot of entrepreneurs who want to start a business in the US are offered a lot of benefits, such as reputation on the foreign market and tax breaks. To register a business in the USA, however, one must strictly follow the rules for formation. So, we suggest that you get formal help with the company incorporation.
The Registrationwala is here to help you out. Businesses that want to set up their name in the US or start a company in the US can use our registration services. Let’s look at how.
Summary Of Business Types:
| Type of Company | Features | Benefits |
| Sole Proprietorship | You are given a trade name, but the business does not have a formal identity. For a sole company, this means that the owner is responsible for its bills. This is a good choice for businesses with low risk or people who want to try out an idea before setting up a company. | Set up is simple and doesn’t cost much.Full power and ownership of the company.Taxes are easier to file when they are pass-through.Few rules and regulations.Straight to the cash. |
| Partnership | Under a shared company name, at least two people can work together. You can choose between an LLP or a general limited partnership (LP). Partnerships are a good choice for professional groups or businesses with a lot of owners. | Partnerships are helpful because they share resources and duties. Partners can share decision-making and workload, which can lead to more efficient operations. Access to a wider pool of skills and resources is another benefit, allowing partners to complement each other’s strengths and expertise. Additionally, partners share the financial burden and risk, reducing individual liability. Like sole proprietorships, partnerships benefit from pass-through taxation, simplifying the tax process. Lastly, partnerships offer flexibility in management structure, allowing partners to customize roles and responsibilities based on their strengths and preferences. |
| Limited Liability Company (LLC) | This set-up has the good points of both a company and a partnership. It keeps you from being held personally responsible unless the LLC gets sued or goes bankrupt. For businesses with moderate to high risk, LLCs are a good choice. | LLCs combine the benefits of limited liability protection with the flexibility of pass-through taxation. Owners enjoy limited personal liability protection, shielding their personal assets from business debts and liabilities. Pass-through taxation means that LLC profits and losses are reported on the owners’ individual tax returns, simplifying tax filing. The flexible management structure allows owners to choose how they want their business to be managed, whether by members or designated managers. Additionally, LLCs involve less paperwork and formalities compared to corporations, reducing administrative burden. Finally, LLCs have the flexibility to choose their tax treatment, providing further customization based on the business’s needs and goals. |
| Corporation – C-Corp | This is a standard business corporation with a legal identity separate from its owners. You are required to maintain financial records and pay corporate taxes. C-Corps are a good option for businesses that need to raise money or intend to go public in the future. | C-Corporations offer distinct advantages, including limited liability protection for shareholders. Shareholders’ personal assets are separate from the corporation’s liabilities, providing a layer of protection. The ability to raise capital through the sale of stock is another key benefit, offering a way to fund growth and expansion. C-Corporations have perpetual existence, meaning they can continue to operate despite changes in ownership or management. Potential tax advantages, such as deductible business expenses and retirement plan contributions, can lead to tax savings for the corporation. Lastly, C-Corporations often enjoy credibility and prestige, which can attract investors and customers. |
| Corporation – S-Corp | This is a special type of corporation allowed in some states in the US. It offers the benefit of passing on some profits and even losses directly to the personal income of the owners without being subjected to corporate tax. | S-Corporations offer advantages similar to C-Corporations with some differences. Like C-Corporations, S-Corporations provide limited liability protection to shareholders. Pass-through taxation allows S-Corporations to avoid double taxation, with profits and losses passed through to shareholders’ individual tax returns. Additionally, S-Corporations can have up to 100 shareholders, providing flexibility in ownership structure. Moreover, S-Corporations offer flexibility in profit distribution, allowing shareholders to receive dividends based on their ownership stakes. |
| Corporation – B-Corp | A Benefit Corporation or B-Corp differs from C-Corps in accountability, purpose, and transparency. They are usually driven by a mission and profits. The shareholders of B-Corps hold the company responsible for generating profits and ensuring some public benefit. | Benefit Corporations, or B-Corps, prioritize social and environmental impact alongside profit. By legal requirement, B-Corps must consider the interests of various stakeholders, not just shareholders, in their decision-making process. This makes them attractive to socially conscious investors who seek both financial returns and positive social impact. B-Corps often enjoy enhanced credibility and reputation due to their commitment to social responsibility, which can attract customers and investors. Additionally, B-Corps may have access to more funding sources, including impact investors and socially focused funds. Finally, B-Corps are characterized by transparency and accountability, with requirements to report on their social and environmental performance. |
| Corporation – Close Corp | A Close Corporation is similar to a Benefit Corporation with a less traditional corporate structure. | Close Corporations, or closely held corporations, offer advantages suited for smaller, closely-knit businesses. With a limited number of shareholders, often family members or close associates, close corporations provide more flexibility in operations and decision-making. Additionally, they typically have fewer regulatory requirements compared to larger corporations, reducing administrative burden. Close corporations may benefit from a close-knit ownership and management structure, fostering a sense of trust and collaboration among shareholders. Overall, close corporations offer a more intimate business environment, ideal for those seeking a more personal approach to ownership and management. |
| Corporation – Non-Profit | These are corporations that are involved in charity or social causes. Non-profit corporations can get tax exemption from the IRS. They are also referred to as 501(c)(3) Corporations. | Non-profit corporations provide unique advantages driven by their mission-focused nature. One key benefit is tax-exempt status, allowing non-profits to reinvest more of their resources into their charitable activities. Non-profits can also receive donations and grants from individuals, corporations, and government entities, providing additional funding for their operations. The mission-driven focus of non-profits attracts individuals and organizations who share their goals, fostering a supportive community of stakeholders. Additionally, directors and officers of non-profits enjoy limited liability protection, shielding them from personal liability for the organization’s debts and obligations. Lastly, non-profits have the opportunity to serve the community and pursue charitable goals, making a positive impact on society. |
| Cooperative | This is a structure that is owned and operated by the people who use its services. Profits are usually distributed among the members of the cooperative. | Cooperatives have benefits because they are open and encourage people to work together. Members share ownership and control, which makes sure that choices are made as a group and reflect the needs of the community. The democratic way of making decisions encourages participation and openness, giving each person a say in how the cooperative runs. Making sure that everyone in the company benefits from its success by sharing income fairly builds a feeling of kindness and community. Cooperatives may also be able to get tax breaks, which can help them make even more money. Lastly, unions build a group where people can help each other and share resources, knowledge, and experiences, which helps everyone grow and be successful. |
Non- Resident Company Registration in USA
It is possible to run an LLC from outside the US, but it might not be possible to do so in the US without a legal work visa.
You can start and run an LLC from outside the US without a license. But if you want to run the LLC from inside the US, you might need a legal work visa.¹
Most of the time, you will need a work visa to be a cop and do your job in the US. It is against the law to work for your business or LLC in the US without a legal work visa.
Many people choose to get a US business because having one doesn’t give you the right to live in the US.
There are a few different types of visas, which is good news.
Entrepreneurs like the E-2 visa the most; it’s the nearest thing the US has to a “start-up visa.” To get one, you must meet three main requirements:
You have to be a member of a country that has a treaty with the US for friendship, trade, or navigation. Treaty Countries, run by the Department of State, has a full list of all the countries that can join.
You must either have already put a lot of money into a US business or be looking to do so soon. There isn’t a set amount of money you have to spend right now, but it should be enough to buy or start a new business, run it, and make it grow. If the business fails, the cash must be able to lose some or all of it. It’s also important to prove that the money didn’t come from illegal activities in any way.
To get this, you need to show that you own at least 50% of your business.
It’s clear that your only goal in coming to the US is to build and run the finance business.
The E-2 doesn’t make it clear how to get your Green Card. Qualified treaty investors and employees will be allowed a maximum initial stay of two years. In steps of up to two years, you can ask for an increase of your stay. A person with an E-2 nonimmigrant visa can get as many renewals as they need. On the other hand, you must still plan to leave the United States when your status ends.
Nevada and Delaware are two states that are known for being very cheap for business owners. Delaware (Delaware Gov) is particularly popular, thanks to corporate law that provides significant protections to shareholders and directors (Delaware GOV).
