Company formation in USA

Documents required for US company registration

1. Name of the company
2. Type of business
3. The Name(s) of the business partner(s)
4. Addresses of the business partners
5. Aregistered business's physical address in the United States
6. Registered agent (if you have another address)
7. Ownership percentage

Strategies to enter the USA

In the United States, businesses can be formed as sole proprietorships, general partnerships, limited liability companies, or corporations. However, Indian companies can only register as an LLC or a C corporation in the United States of America. Our accountants at Finacbookswill help you form LLC’s and corporations with access to numerous other benefits.

Incorporating in Delaware State is advantageous not just for Indian nationals and businesses, but also for American businesses, as more than half of publicly traded firms and Fortune 500 companies in the United States of America are established in Delaware.

However, each state in the United States has its own set of state rules and regulations that vary significantly from one another. If the majority of your firm is dependent on a single state and its need for your services, it is prudent to incorporate your business and obtain a Foreign Qualification Certificate. Nonetheless, these three states named - Delaware, Wyoming, and Nevada, in particular, have the most favourable business and tax rules, making incorporation more popular.

1. Limited Liability Company (LLC) – An LLC is a business structure that combines the features of a corporation and a partnership. Limited liability companies provide owners with limited liability protection in the event of a lawsuit or even bankruptcy. LLC’s are more flexible, and has simple compliance requirements.

   A corporation is required to hold resolutions and shareholders meetings, as well as to record and file minutes of those meetings and votes. On the other hand, LLC’s are exempt from annual shareholder meetings.

2. C-Corporation – If the goal is to get capital from venture capitalists and angel investors, it is preferable to form a C corporation in the US. Investors, bankers, employees, suppliers, and customers believe corporations are the optimal structure for the majority of firms.

   C-Corporations are distinct legal entities, owned, controlled and managed by the people. As a result, it is treated as a normal individual under the tax rules and thus has the ability to engage in business, and contracts have the ability to bring lawsuits and be sued.

Process of incorporating company in USA

Specific steps must be taken to register a business in the United States, as detailed below:

1. Step -1 - Determine the entity’s type – The first decision to make is about the type of company to establish. As mentioned previously, there are essentially two models accessible for US corporation registration. One is a Limited Liability Company, and the other is a Corporation or an Inc. This varies according to the size of the entity or the type of investment.
2. Step – 2 - Appointing a registered and authorized agent – The second step is to appoint a registered and authorised agent. Although there is an online approach for registering a US company. However, only an authorised person or agent may initiate the process of US business registration. As a result, it is always suggested to utilise the services of an experienced agent to initiate the process of forming a US company. The agent is responsible for document collection, documentation, and subsequent submission to authorities. Additionally, he is responsible for receiving any communications or reports from the appropriate authorities in this regard and adhering to any applicable rules.
3. Step – 3 - Choosing a company name – The next step in registering a business in the United States is choosing a company name. That name must be unique and not related to any pre-existing business. The agent begins by doing a search for the name availability, and then applies to the authority for name approval.
4. Step – 4 - Document collection and submission with authority – The agent is responsible for the collection of all records pertaining to the company's members, proposed directors, shareholders, and any other official. Additionally, the agent must submit an application with authorization for appointment.
5. Step - 5 - Employer identification number (EIN) generation – After an agent submits an application, the US Internal Revenue Service generates an employer identification number (EIN) or a tax identification number. An employer identification number (EIN) is a unique identifier assigned to an incorporated company that is required for post-registration or tax purposes.
6. Step – 6 – Certain businesses are required to produce a Certificate of Authentication or an Apostille Certificate to the authority if the company is not a member of the Hague Conventions. Other businesses are not required to submit the same information.
7. Step – 7 – The next step is to obtain authorization to operate a business by registering for a vendor's licence or a state tax permit.
8. Step – 8 - Obtain appropriate state tax permits – As state laws differ, so does the tax rate. It is critical to register the establishment with the state tax authority and to obtain all required tax permits. Additionally, after registering a US corporation, the corporation is obligated to collect and submit income and employment-related taxes to the state's appropriate authorities.
9. Step – 9 - Obtain appropriate licences and permits – Regardless of the kind of entity, whether an LLC or a corporation, each entity is required to obtain specific state-mandated licences and permits. In the event of non-compliance, severe fines may be levied.

Benefits of US company registration

1. Business-friendly laws and regulations.
2. Personal assets, such as a home or savings, are safeguarded against company liabilities.
3. It is easier to incorporate a firm in the United States.
4. Corporate income tax rates are the lowest.
5. Under US law, the names of corporate directors/shareholders are not required to be publicly disclosed.

Difference between LLC and C Corporation