Company Registration in USA

For starting a business in the USA, the first step is to start with the company registration process. There are a few steps that need to be taken care of for US company registration. USA government has given few relaxations to foreign nationals who want to set up a business over there. A foreigner can set up or incorporate a company via online mode either as Inc or an LLC by following a simple procedure. Most of the foreign nationals are willing to set up a business in the USA, due to its foundational technology, infrastructure and resources available in the country.

Benefits of US company registration:

Being a world-class economy and first hub, setting up a company in the USA gives your company a global class benefit. Further being a developed nation, rules and regulations for US company registration are much regularized, and corporate tax rates are much lower. However, every state follows different state laws that vary from state to state, so it is essential to check the same minutely. For instance, few states like Delaware, Nevada and Wyoming have many relaxed laws and taxation norms for startups and corporations. In Delaware State, the government has provided much relaxation to investors in terms of raising funds from angel investors, to issue stakes to its employees and by providing consolidated and regularized state laws in this regard. Due to the reason, around 60% of the top Fortune 500 companies are registered and based in this state.

Here are some other benefits of US company registration, as mentioned below:

Lower taxation rates Relaxed laws in terms of raising funds for investment from venture capitalists Easy to dispose of or sell the company in the market Due to a diverse economy, higher reputation in global economies Much convenient and cost-effective to incorporate a company in the USA Easy to get a visa

Options for US company registration

There is a specific procedure that everyone has to follow for US company registration. One of the foremost steps is to choose the category or type of incorporation. Entities can be formed in two ways in the USA, as mentioned below:

Standalone entity: The Standalone entity is that entity which is majorly possessed by a group of investors, stakeholders, founders, and sometimes other employees of the company. This entity is separate and different from the existing company.

The Standalone entity is that entity which is majorly possessed by a group of investors, stakeholders, founders, and sometimes other employees of the company. This entity is separate and different from the existing company. Subsidiary entity: The Subsidiary entity is a wholly-owned entity or subsidiary of any existing company which is presently situated and registered outside the USA.

Further, there are generally two options available for Indians, i.e., forming a US Corporation (Inc) or an LLC. Indian nationals mostly go with registering an LLC (Limited Liability Company) due to its adaptability and easiness towards taxation. In contrast, entrepreneurs looking to go public and seeking investment from angel investors or venture capitalists majorly go for US Corporation or Inc. Major attraction of foreign nationals towards this is due to no restriction on shareholding or numbers of owners in this setup. Further free transfer of shares and multiple tax planning options along with legal protection to a corporation is another reason behind.

The Distinction between LLC and C Corp

LLC C Corp or Inc. In an LLC owners are called as ‘the members’ In C-Corp or Inc, the owners are ‘the Shareholders’ of the company. Entities looking for a small investment and limited shareholding set up go for LLC Entities seeking financing and which aim to establish large business comparatively go for Corp or Inc. Transfer of shares depends on various factors and comparatively procedural Transfer of shares is much easy and convenient Members can finalize LLC structure as per mutual discussion and understanding The proper procedure is to be followed as per prescribed rules and guidelines. Directors of the company who are responsible for running affairs of the company are to be nominated by shareholders LLCs are mostly structured to be formed and operated as partnership firms, so large investors do not prefer to invest in LLCs. Being a legal entity, investors such as venture capitalists and angel investors are much inclined toward investing in C Corp.

Prerequisites For US Company registration

Specific steps need to follow for US company registration, as mentioned below:

Step 1: Decide the type of entity - The first decision to make is regarding the kind of company. As discussed above, primarily, two models are available for US company registration. One is LLC, and another is Corp or Inc. This depends on the size of entity or type of investment.

- The first decision to make is regarding the kind of company. As discussed above, primarily, two models are available for US company registration. One is LLC, and another is Corp or Inc. This depends on the size of entity or type of investment. Step-2 : Appointing a registered and authorized agent - Although, there is an online procedure available for US company registration. However, only an authorized person or agent can apply for US company registration procedure. So it is always recommended to appoint a qualified agent to start your US company registration procedure. The agent is responsible for collection, documentation and further submission of documents with authority. Further, he is responsible for receiving any communication or reports from the respective authority in this regard and do comply with all provisions as prescribed.

: - Although, there is an online procedure available for US company registration. However, only an authorized person or agent can apply for US company registration procedure. So it is always recommended to appoint a qualified agent to start your US company registration procedure. The agent is responsible for collection, documentation and further submission of documents with authority. Further, he is responsible for receiving any communication or reports from the respective authority in this regard and do comply with all provisions as prescribed. Step-3: Picking company name - Next step in US company registration is a selection of company name. That name needs to be unique and should not match with any pre-existing company. The agent starts with a name availability search, and after that, he applies for name approval application before the authority.

- Next step in US company registration is a selection of company name. That name needs to be unique and should not match with any pre-existing company. The agent starts with a name availability search, and after that, he applies for name approval application before the authority. Step-4: Collection and submission of documents with authority : The agent is responsible for the collection of records of all the members, proposed directors or shareholders or any other official of the company. The agent is further required to submit an application with authority for their appointment.

: The agent is responsible for the collection of records of all the members, proposed directors or shareholders or any other official of the company. The agent is further required to submit an application with authority for their appointment. Step-5: Creation of Employer identification number (EIN)- Once the agent makes an application, US internal revenue services generates an Employer identification number (EIN) or a tax ID number. Employer identification number (EIN) is a unique identification number allotted to a company incorporated, which is essential for post-registration procedure or taxation purpose.

Once the agent makes an application, US internal revenue services generates an Employer identification number (EIN) or a tax ID number. Employer identification number (EIN) is a unique identification number allotted to a company incorporated, which is essential for post-registration procedure or taxation purpose. Step-6 : Some companies are required to submit an Apostille certificate or a Certification of authentication before the authority in case the company doesn’t belong to a country which is part of the Hague Conventions. Other companies no need to submit the same.

: Some companies are required to submit an or a Certification of authentication before the authority in case the company doesn’t belong to a country which is part of the Hague Conventions. Other companies no need to submit the same. Step-7: Next step is to take authorization to start a business by registering a vendor’s license or tax permit for a particular state.

Next step is to take authorization to start a business by registering a for a particular state. Step-8: Get necessary tax permits from the state - As state laws vary from state to state, so taxation rate also changes. It is pertinent to register the setup with the state tax authority and take all necessary tax permits. Further, a corporation is required to take and report income and employment-related taxes with the respective jurisdiction of the state after US company registration.

- As state laws vary from state to state, so taxation rate also changes. It is pertinent to register the setup with the state tax authority and take all necessary tax permits. Further, a corporation is required to take and report income and employment-related taxes with the respective jurisdiction of the state after US company registration. Step-9: Take necessary licenses and permits- As per the setup, whether it is LLC or Corporation, every set up is required to take specific prescribed licenses and permits as prescribed by a particular state. In case of failure to comply with the same, heavy penalties can be imposed.

Essential requirements after completion of US company registration

Once the company is registered, there are certain post compliances that companies have to follow. These compliances are general, but some states have prescribed specific guidelines that companies have to follow. Here is a list of particular directions given by government post-US company registration:

Opening of registered office : It is pertinent to have a registered office address on records. Companies are required to submit documents w.r.t registered office with the authority that needs to be different from a residential address. It not only helps to gain clientage but also a place to contact for official purpose.

: It is pertinent to have a registered office address on records. Companies are required to submit documents w.r.t registered office with the authority that needs to be different from a residential address. It not only helps to gain clientage but also a place to contact for official purpose. Get a USA based official contact number and get created an official email ID for contact purpose.

and get created an official email ID for contact purpose. Opening of a bank account in the USA : It is essential to open a USA based bank account to accept USA based payments. These days it has become little cumbersome to open corporate bank accounts over there. It also depends on state laws as well as laws related to the home country. It is always advisable to take the assistance of an agent to open a bank account in the USA.

: It is essential to open a USA based bank account to accept USA based payments. These days it has become little cumbersome to open corporate bank accounts over there. It also depends on state laws as well as laws related to the home country. It is always advisable to take the assistance of an agent to open a bank account in the USA. Opening of a bank account in Home country : It is still advisable to open a bank account with a respective bank which has branches in India. It becomes much easier to open a bank account in the same bank in the home country too. Company is required to submit ‘Apostille certificate’ or ‘Certificate of Authentication’ to open a local account for the company incorporated in the USA.

: It is still advisable to open a bank account with a respective bank which has branches in India. It becomes much easier to open a bank account in the same bank in the home country too. Company is required to submit ‘Apostille certificate’ or ‘Certificate of Authentication’ to open a local account for the company incorporated in the USA. Forming an official website of the company and company logo : Get in touch with an agent to create an official website of the company, which not only make your company more reliable but also be advantageous for your business. It is always advisable to take the trademark of the company logo for future purpose.

: Get in touch with an agent to create an official website of the company, which not only make your company more reliable but also be advantageous for your business. It is always advisable to take the trademark of the company logo for future purpose. Filing of annual reports of the company - As per state laws, companies are required to file and further to maintain the financial records of the company with official address. The government can impose penalties in case the company fails to comply with the provisions.

- As per state laws, companies are required to file and further to maintain the financial records of the company with official address. The government can impose penalties in case the company fails to comply with the provisions. Meet compliance requirement with the home country to avoid any penalty in future.

Maintenance of agent for fulfilling any future requirement related to the company.

Paying of annual taxation or any other taxes to authority. It varies from state to state and from entity to entity as prescribed by state laws.

How can Enterslice help?

We can help you with the procedure related to the US company registration

We will submit the concerned documentation to authorities on behalf of you.

We monitor and track the application status.

We value your time and money.