Why the USA for Indian Entrepreneurs?
Obtaining Company Registration in the USA paves the foundation for a brighter future for entrepreneurs. Here are some potential reasons why you must choose the USA as your business destination:
Economic Powerhouse:
The USA fosters the most robust economy in the world, facilitating a massive customer base and endless business options. For Indian entrepreneurs intending to delve into a dynamic market, this nation offers unmatched growth potential and expansion capabilities.
Innovation and Technology Hub
Touted globally as a leader in technology and innovation, the USA facilitates an ecosystem that reinforces entrepreneurship and creativity. Access to world-class technologies and research avenues can help different businesses thrive like never before.
Diverse Markets
The USA offers a holy grail of diverse cultures and demographics, facilitating a vast market landscape. This diversity enables companies to bespoke their offerings to different consumer segments, reinforcing market responsiveness and adaptability.
Investor Confidence
The USA fosters a stable political environment, a formidable legal structure, and business-supportive regulations, which help attract global investment. Entrepreneurs can benefit from access to a multitude of funding options and venture capital.
Company Structures Available in the USA
Before unveiling the complexities of company legalization, it is vital to comprehend the available business structures in the USA. The most common structures are as follows:
Corporations
C Corporations, or C-corps, are the most common type of corporate structure. They have an individual legal identity, offering limited liability to the shareholders. Such entities can issue different classes of stock for fundraising or attracting investors. They attract corporate income tax and double taxation on the dividends distributed among the shareholders. Being a formal structure, C Corporation has an organized management boasting a board of directors, officers, and shareholders.
Limited Liability Companies (LLCs)
Limited Liability Companies, or LLCs, are a fusion of a partnership firm and a corporation, offering much-needed resilience and stability. LLCs protect members’s assets from business debts and liabilities. These entities do not necessarily attract double taxation since the profits and losses flow through the member’s personal tax returns. LLCs are primarily suitable for small and mid-sized businesses.
Single-Person Businesses
Single-person businesses are the most popular and the simplest form of business structure. In this type, a single owner has complete control over their business, operation, and assets. However, it can bring unlimited liabilities to the owner since it lacks a separate legal identity. This can put the owner’s assets in peril. This structure works fine for small-scale businesses.
Prerequisites for Company Registration in the USA
Starting with the company registration formality in the USA involves arranging the required documents and information. Here is the checklist you must follow for registration:
-
Company Name
Select a unique and trademark-free business name. Type of Business: Select the business model as per your objectives and operational requirements.
-
Physical US Address
Booked a legal space in the United States to pursue your business chores
-
Registered Agent (Y/N)
Clarify whether you are using the registered agent's address or not
Documentation Required: Company Registration in the USA
Paperwork plays a pivotal role in the company registration process. You must arrange the following documents, which may vary based on the chosen business structure.
-
Business Name Registration
Assuring the availability and distinctiveness of the selected business name
-
Articles of Incorporation/Formation
illustration of critical information about the company, such as its name, purpose, and structure.
-
Employer Identification Number (EIN)
Secure a unique tax ID from the respective tax authority.
-
Operating Agreement (for LLCs) or Bylaws (for Corporations)
It must entail internal workings, management hierarchy, etc.
-
Registered Agent
Detail concerning a registered agent appointed to handle registration formalities.
Company Registration in the USA: A Nine Steps Guide
Here is the five steps guide illustrating the process of securing company registration in the USA:
-
Step 1: Choose a Business Structure
Start by delving into the different business structures and choose the one that fits your goals and operational requirements. Each structure adheres to different compliances and tax implications.
-
Step 2: Choose a State for Registration
The USA has 50 states, and each state sits on different regulations and tax structures. Selecting the correct state is a strategic decision, which entails considering factors like policies, regulations, and taxes.
-
Step 3: Register Your Business Name
Select a legal business name and make sure it is not acquired earlier. Once you finish the name selection, head to the relevant state authority to register the name.
-
Step 4: File the Necessary Documents
Head to the state's business registration office to submit the required documents. For LLCs, this typically involves filing AOI, i.e., Articles of Incorporation, while corporations file AOO, which stands for Articles of Organization. These documents entail critical information about the entity, including its name, vision, mission, structure, and name of the founders.
-
Step 5: Obtain an EIN (Employer Identification Number)
Head to the Internal Revenue Service (IRS) to file an application regarding the Employer Identification Number. It entails a nine-digit number that helps identify the taxpayers. Even if your entity lacks a workforce, an EIN helps you open bank accounts and address other obligations.
-
Step 6: Create Operating Agreement or Bylaws
Based on your business model, draft the internal governance documents. Whereas LLCs are required to draft an operating agreement, corporates must draft Bylaws. These charter documents entail roles, obligations, and decision-making flowcharts.
-
Step 7: Comply with State Regulations
The norms and regulations to which companies must abide differ state-wise and industry-wise. Therefore, adherence to the same is vital.
-
Step 8: Additional Licensing and Permits
Based on the industry type and business model, you may be required to secure government approvals and permits to stay compliant. Research and secure any mandatory license to avoid any legal hindrances.
-
Step 9: Open a Business Bank Account
Once your entity is legalized, the next important step is to open a corporate bank account. This account has nothing to do with your personal expenses or savings, and hence it serves as a dedicated business account. Tax authority keeps track of the business expenses and income through these accounts.
How does Adviso facilitate business set up in the USA?
Dealing with the regulatory framework of non-native nation for business formation can be daunting. This is where Adviso comes into play. We are a reputed service provider that helps clients go global with zero hassle. Our team specializes in global incorporation and regulatory affairs, making life easier for entrepreneurs globally.
We let our clients thoroughly understand the pain points and potential of going global with comprehensive support, leading to 100% satisfaction. From breaking down regulatory requirements to filing applications and paperwork arrangements, we will do everything on your behalf so that you can focus on things that matter to you.
We are committed to going the extra mile for our clients, meaning our services are not limited to global incorporation only. Our professionals have profound expertise in resolving legal adversities that prevent startups from legalizing their businesses.
