An Overview

The US is one of the fastest growing economies in the world and the US market is indeed a very lucrative market that every business wants to have a share in. Registration is one of the first and most important steps to set up a business in the USA and reap the benefits from it. However, if you are a non-resident willing to register a company in the USA, there are certain procedures that you would need to follow, which might be a little complicated or even overwhelming. So, we have compiled a comprehensive guide to help you with a seamless and hassle-free registration of your company in the USA.

Benefits of Company Registration in the USA

The United States of America is one of the most powerful economies in the world, which means the Purchase Power Parity (PPP) of a majority of American citizens is higher than that of the global average. This essentially translates to a greater scope of profits for your business and the added international repute that a US-based company can earn. Another advantage of registering your company in the USA is the easier access to financial capital such as loans, grants, and investments and the availability of modern cutting-edge technology at your disposal. Finally, the USA boasts of business business-friendly legal and regulatory framework and lower corporate taxes which can help give your business the necessary boost to emerge as a top contender in your respective business domains. So, these are a few of the several benefits that you will get if you register your company in the USA.

Essential Checklist

However, before you go ahead with registering your Company in the USA, it is crucial to keep certain factors in mind. To make it easier for you, we have given a few questions that you might want to ask yourself before you register your company, to ensure that the entire process remains beneficial to you, such as -

1. What kind of company who you intend to set up?


2. In which state do you intend to register your company and the local laws that you need to comply with?


3. What will be the extent of area to which your company will cater to?


4. What permits, registration, and licenses do you need to operate your specific business in the USA?


5. What are the overhead costs, labor, raw materials, rent, and additional expenses that you need to incur while operating your company?

Types of Business Structures

In the USA, the major types of Business Structures that you can register your company are as follows

1. Sole Proprietorship - It is the simplest business structure that is owned and managed by a single person. While the owner will earn all the profits from his business, and be taxed on his personal income, he will also be entirely liable for all the liabilities and debts of the said business. While it is very easy to set up a Sole Proprietorship, it is unsuitable for larger business operations involving more than one member.


2. Partnership - A partnership, in the simplest sense, is the coming together of two or more members to start a business by sharing their resources. The advantage of a partnership is that it requires lesser compliance and there is no corporate tax as the profits earned by the partners are taxed as their personal income. However, each partner is personally liable for the debts and liabilities incurred in the said partnership


3. Limited Liability Company (LLC) - An LLC is an alternative form of company that provides the flexible benefits of a partnership and the limited liability of a company. In an LLP, each partner’s liability is limited to the extent of the shares they own. Since LLCs are are viewed as self-employed from a legal perspective, they are allowed certain tax exemptions and are bound to be taxed at lower tax rates as compared to Corporations. It is an great choice of business structure for people who want to pay lower taxes as well as protect their assets by limiting their liabilities


4. C Corp - An acronym for Corporation, a C Corp is a business structure which enables the business to have a separate legal entity that is distinct from that of its members. It also has certain features such as the right to buy, own, and sell property and to sue and be sued. A few stand-out features of a C Corp in comparison to an LLC is that it provides perpetual succession, i.e., the company doesn’t stop existing when the members do, and better protection to its member’s assets as the members have limited liability. A C Corp also provides for more stability and makes it easier to raise funds. However, it requires more legal compliance and is more expensive to set up. So, a C Corp is ideal for businesses that aim to grow exponentially by raising investments and eventually intend to go public.


5. S Corp - An S corp or a Special Corporation, is a business vehicle that allows the owners to avoid paying corporate taxes by passing off the profits and losses to the shareholders as dividends or debts, which in turn pay taxes on their income. However, the total number of shareholders is limited to 100 members and since only US citizens can become members of an S Corp, non-residents are essentially barred from forming such a business entity.


6. B Corp - An acronym for Benefit Corporation, a B Corp is a for-profit business entity that is driven by motive and mission and recognized in the US for its role in public welfare. B Corp certifications are awarded by a non-profit called B Labs provided it meets certain social and environmental criteria. While it functions just like a C Corp, one of the primary advantages of setting up a B Corp is the public trust that it earns, which makes it easier to raise capital from investors


7. Closed Corporation - A closed corporation is similar to a B Corp, except it is less formally set up and requires less compliance due to its smaller size. It does not have a Board of Directors and the operations are managed by a small group of shareholders. However, the shares of a closed corporation cannot be traded in public


8. Non-profit Corporation - A Non-Profit Corporation, as the term implies, is a not-for-profit organization that functions in the form of a society. Since they do not earn any profits, they are exempted from paying any taxes on both profits as well as donations. However, the designation of a Non-profit Organisation is only given to organizations that further charitable, scientific, educational, public welfare, and cultural purposes and they are also under the obligation to disclose the usage of the profits earned in every annum


9. Co-operative - A Co-operative is a self-help organization that can be formed by a group of members who combine their resources and work together to reach a common objective. The advantage of a Co-operative society is the numerous tax exemptions and policy benefits that the government offers in order to facilitate the growth of such organizations.

Procedure for Company Registration in the U

Registering a business in the USA involves several important steps that need to be followed to ensure that the registration is legally recognized. So, these are the primary steps that an applicant will have to follow to have his/ her company registered in the USA -

• Choosing a name for your company

The name of your business will become its identity with which the consumers associate their loyalty in the long run. So, it is important to choose a unique name that is not already owned by any other company and to register the intellectual property rights (IPR) for the same. Since the USA has a very strong IPR regime, it is important to do your legal research using sites such as USPTO before choosing a name for your company to avoid any legal issues in the future.

• Choosing the right business structure

Choosing the right business structure for your company is crucial as it will decide the type of legal compliances, tax obligations, and policy benefits that will apply to your company. Such a choice must be made on the basis of the consumers you target, the taxes you want to pay, the flexibility and liability you want to incur, and the manner in which you want to run your business to ensure that you can obtain maximum benefits from the business structure that you choose to opt for

• Filing the certificate of incorporation

The promoters of the company are legally mandated to file the certificate of incorporation with the Secretary of the state in which the company is being incorporated. The certificate shall contain information about the company about the following -

• Name of the company.


• Purpose and commercial activities of the company


• The official address of the company’s registered office.


• The company’s capital and business structure, etc


• Appointing a Registered Agent

Every non-resident company is mandated by law to appoint a registered agent who resides in the State where the company is incorporated and is available at all times to handle all official communications and business-related inquiries as well as receive and sign documents on behalf of the company

• Preparing the by-laws of the company

The company is also under legal obligation to prepare the by-laws which shall regulate the internal functioning of the company to register itself in the USA

• Appointing the first directors

The promoter or the person who has signed off the incorporation of the company will have to appoint the first directors of the company and thereafter hold the first board meeting. The tenure of the first directors shall be till the first annual meeting of the shareholders, after which they may resign or continue as directors as per the decision of the shareholders.

• Distributing the stocks to the shareholders

The company shall then distribute the shares of the company to the shareholders in proportion to the investments made in the company.

• Obtaining the requisite business permits and licenses for the function of the company

Based on the type of business structure that you opt for, there are certain licenses and permits that must be obtained to ensure the hassle-free functioning of the company. Non-compliance with such laws may lead to the imposing of heavy penalties and even revocation of the registration of the company in certain cases.

Post Registration Requirements for a Company in the USA

Once you have registered a company in the USA, there are certain other compliances called ‘Post Registration Compliances’ which you must mandatorily adhere to. While such requirements may vary from state to state, a few of the general requirements are as follows -

• Obtaining EIN/ FEIN

FEIN or EIN stands for Federal Employer Identification Number and is a number issued by the Internal Revenue Service of the USA to identify business entities. It is required by most banks to enable the company to open a local bank account in its own name in the USA

• Opening of a bank account

If your business involves dealing with clients who live in the USA, it can be a practical choice to open a bank account with a local bank based in USA in the company’s name. If you are a nonresident, most banks would require the FEIN in most cases. A bank account in the company’s name in the owner’s home country is also advisable to facilitate easier transfer of funds.

• Registering a phone number in the USA

The US legal system mandates that every company operating in the USA needs to have a phone number registered in the USA to facilitate easier communication. It is the responsibility of the owner to keep the phone number operating and functional during the company’s business hours.

• Filing of the annual tax returns of the company

If your company is taxable, it is mandatory to file the tax returns of the company every year to avoid any legal issues with the tax authorities.

• Choosing a Logo and creating a website for your company

Having a logo for your company can prove to be very beneficial as it allows your consumers to identify their loyalties with the same. Similarly, a dedicated website can go a long way in earning you recognition in the present day when the internet is the most powerful form of media.

• Filing Form BE 13

The Bureau of Economics and Statistics, USA mandates non-resident owners or partners in a company to file a detailed questionnaire, also known as Form BE 13, as a matter of procedure. While it is only meant for foreign investors, it is crucial to check if you need to fill up the same as non-compliance attracts a heavy penalty of USD 2500

Corporate Tax in the USA

USA imposes corporate taxes on companies at each level, i.e. Federal, State, and Local, on the income of Corporations. In terms of Federal Corporate Tax, the highest bracket at which a company can be taxed is 21% and both the local and state governments also charge their own additional taxes. However, the added taxes are set off from the Federal Government’s share of taxes in varied proportions to make up a combined tax rate of around 26% being charged from companies registered in the USA.

Why Adviso?

Registering a company in the USA indeed opens up vast opportunities for your business to grow, but the procedures that have to be followed make the entire process a cumbersome and somewhat complicated process. So, it is best to delegate the task to professionals like Adviso who possess the experience and legal knowledge to make the entire process transparent and hassle-free. We have a dedicated team of experts who will meet all your documentation needs and ensure that you meet all the legal and tax compliances that are required to set up a company in the USA, in a budget-friendly manner. If you have any queries, all you have to do is get on a call with Adviso and our team of professionals will be happy to help you resolve them in no time.

Documents for Company Registration in the USA

If you are trying to register your company in the USA, these are the documents that should be kept ready beforehand -

• Copies of the Passport of all the office holders


• Copies of Pan Card (In case of Indian nationals) of all the office holders.


• Photo Identity Proof such as Driver's License of all the desired officeholders.


• Certificate of Incorporation of the corporation


• Bye-laws of the corporation.


• Utility Bills such as municipal tax receipts, electricity, and water bills (if your residence in the US is not older than 2 months.)


• Specimen signatures of all the desired officeholders.


• Official trade name of your company.