Everything You Need To Know About Forming A Company In The U.S.
Many entrepreneurs dream of
starting a business in the superpower country, the United States. However, the
first-timers often don’t know the process behind company formation in the U.S.
but it doesn’t have to be complicated. For instance, the U.S. allows you to
operate an LLC company from another Country and can become a director or
shareholder of the company – doesn’t that sound exciting?
So, if you are ready to form a
company in the U.S. but don’t know the internal processes, we have got the
details for you!
Steps For
Registering The Company In The U.S.
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First of all, you need to decide the right type
of business organization
●
Decide the place of company formation (select
the state or city)
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Look for the local agent and register your
company
●
Apply for the employer identification number
(EIN)
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If needed, get yourself a U.S. mailing address
and open the bank account
●
Open the merchant account to accept payments
from the customers
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Opt for business insurance
●
Get yourself a U.S.-based phone number and
research the tax liabilities
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Make sure that the personal bank accounts and
business banks accounts are separate
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Pay the essential fees, including the annual fee
●
Ensure compliance with the federal, country,
state, and city laws and regulations
●
Have a consultation session with a U.S. business
lawyer to ensure you are eligible to practice in the desired state
These are some common steps of
making a company in the U.S. which might sound complicated right now. However,
BizVee can help with company formation and attain the PayPal verified account to optimize the business transactions.
1. Choosing
Between S-Corp & LLC
LLC is the business entity that’s
perfect for businesses owners who need higher protection from personal
liabilities. This is because LLC is the least restrictive and complicated
business structure to form and operate the business without hiring the agent.
In addition, the LLC business structure promises zero doubling of the taxation.
On the other hand, S-Corp is a tax classification that lets the IRS know that
the business will utilize partnership taxation. However, it’s essential to
register as C-Corp to adhere to the regulations before you shift to S-Corp.
S-Corp promises limited liability protection but businesses with 100 or fewer
shareholders are to be taxed.
2. Applying
For EIN
EIN is the employer
identification number and has a nine-digit sequence that helps identify the
business for taxing purposes. This is required before you initiate the
registration process of the company as a corporation or LLC. As far as the IRS is concerned, it offers free registration service and is available online, so
you can easily acquire an EIN.
Do You Need To Open A Separate Bank
Account for Business?
Many people consider whether they
should open a separate business bank account to optimize the business
transactions or not. If you were contemplating the same, it’s suggested to have
separate accounts for business and personal uses. In the majority of cases, the
business bank account is needed in the U.S. to form the company, depending on
which company you are forming.
As a business owner, the
availability of a separate business bank account will streamline the financial
transactions and track them, especially for building a sustainable business.
This is more evident for small businesses. Also, the business’s financial
information will help determine the company’s financial health and make the
business decisions accordingly. Also, a separate bank account helps reduce the
payable income tax.
The Timeline For Company Registration In The U.S.
When trying to form a company in the U.S., you need to know that you’ve to register with the secretary of state
office. Once the registration requirements are fulfilled, the government will
initiate the document processing and review the information before the business
is approved. For the most part, the time needed for registering the business
will vary with the state.
In the majority of states, it
takes around four to six weeks for the application approval for S-Corp or LLC
but it can take longer as well. Some states also offer rush processing,
including New York. Having said that, if you are tight on the timeline and your
business depends on the timing, you can pay the extra processing fee and get
the approval within two to three working days.
The Right Place To Base The Business
Choosing the right location of
business operations is one of the most critical decisions. For this purpose,
you have to consider various factors, such as demographics, determining the
competition, finding the supply chain, comparison of tax and state laws and
regulations, and finances. Keep in mind that whichever place you choose should
comply with the business objectives of the company without hurting your
finances. For the most part, you would like to set up the business in the U.S.
because it brings in more business but it also translates into a higher
competition. Also, if you have some specific business needs, such as labor,
transportation, and location, you should consider them as well.
Owning An LLC As A Non-Resident – Is
It Possible?
Yes, it’s possible to own an LLC
in the U.S. as a non-resident because you don’t need to be an American
resident. LLC has a well-curated business structure that allows everyone to
apply for the business formation, irrespective of nationality and citizenship.
However, the formation might be more complicated for non-residents as compared
to the residents. On the other hand, you cannot form an S-Corp as a
non-resident.
Timeline For Incorporating The
Business
The
processing time of the business incorporation varies with the states, depending
on the backlog. In the majority of cases, the foreign business owners will need
to wait for thirty days for acquiring the EIN. However, when you have to
acquire the tax ID but the owners or directors are non-US residents, they need
to be filed with a specialized IRS unit.
If you need assistance forming a company in the U.S, BizVee is your partner! This is because they have a professional and
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