Company Registration in the USA

Running a Business in the United States of America?? Sounds exciting? Well, it is. Registering your Business as a Company with the US Federal Authority can greatly expand your pursuits. The US Authority doesn’t mandate the business owner to be a US citizen to start a Company on American Land. Any foreigner can register to set up a company in the USA. It can be a Limited Liability Company or an Incorporation. Today, budding startup owners and entrepreneurs seek to take their businesses to a global level by registering themselves in the United States of America. As ambitious as it sounds, it is also a very complex and difficult procedure. The legal procedure is ubiquitously complex and comes with several roadblocks. Therefore, this article will inform you of the registration procedure and related requirements.

Benefits of Registering a Company in the USA

As one of the most powerful countries in the world, the United States of America, situated in North America, is the largest economy in the world. As a conglomerate of 50 states, the USA is a coming together federal democracy of the world. Every big Corporation wants to imprint its corporal steps in the States as it is a global hub of the digital revolution. Some of the reasons are enumerated in the following points:

• US offers corporate-friendly schemes
• US has large extendable consumer markets
• US’s Federal structure runs on corporate-centric ideologies
• US has a strong decentralized federal economy and polity

Now let us look at Company Registration in USA benefits in detail.

Recognition in the Global Market

If you set up your Company in the US, your Business will gain an international reputation and a global market value. As one of the most popular countries, the USA can get you the necessary recognition. Also, major MNCs will entrust you with the partnership.

Corporate-oriented Legislation

The USA offers very business-friendly regulations to foreign investors. Every incorporated entity in the US enjoys incentives such as lower tax rates, tax exemptions, and subsidies. This attracts many talented entrepreneurs to the North American Nation. They have oriented themselves towards Ease of Doing Business (EDB) principles.

Ease in Raising Funds for the Company

Each registered entity in the USA issue shares as well as raise equity capital. It helps them financially in the long run. Also, the US facilitates a simple application procedure for bank loans to a company. Also, registered entities in the US can access the required capital from different sources. Also, Banks are entrusted with such entities as they can quickly repay their debts.

Lower Tax Requirement

One of the most important reasons the US is a lucrative place for running a Business is that corporate taxes in the US are low. Also, many states of the US offer financial incentives to foreign investors who want to register a company in the North American giant. The incentives can be many, from low corporate tax structures to various subsidies and tax exemptions.

US is the most technologically-competent country on the Planet

The USA has always been the birthplace of the major technological advancements in the world. From smartphones to e-commerce businesses, the US is the first nation to embark on such tech-savvy productions and processes. People there are dedicated to reducing the cost of operations and effectively achieving their goals in the minimum period. Therefore, more and more investors are attracted towards investing their companies in the USA. They have access to the world's most advanced and cutting-edge technologies, which boosts their business productivity.

 

Corporate Structures in the USA for Company Registration

The Company Registration procedure in the USA requires you to decide the company type you want. It can be S-Corp, C-Corp, LLC, or more. Here, S-Corp is unavailable to non-US residents. So to apply for the S-Corp incorporation, you must relocate to the United States or choose a different company model. Now let us understand all the company types in depth.

The US Legislation defines the following major types of companies commonly adopted by businesses in the United States of America:

• Limited Liability Company
• Corporation
• Special Corporation or S-Corp
• Benefits Corporation or B-Corp
• Close Corporation or C-Corp
• Non-Profit Corporation (NPC)
• Cooperative

Let us look at each one of them in detail.

Limited Liability Company

• A Limited Liability Company is commonly known as an LLC.
• An LLC consists of both the features of a Partnership as well as a Company.
• In an LLC, each member partner has limited liability.
• LLC members generally choose LLC structures to protect their personal belongings against the debts and obligations of the Business they undertake, such as:
  • House
  • Vehicles
  • Personal Assets
• The members of LLCs are self-employed in the eyes of the law.
• Members are liable to pay taxes on their self-employment
• An LLC can have more than one owners who are not liable for the Company’s obligations.
• Each member must pay any one of the following taxes:
  • Self-Employment Tax
  • Personal Tax
  • Corporate Tax
• As per some State Legislatures, LLCs do not have perpetual existence.
• Therefore, State Authorities are not considered the best jurisdictions for LLC registrations.
• Some of these jurisdictions are New Jersey, New York, California, etc.
• Some states of the US Federation mandate signing a new agreement on one or more of the company’s members exit from the LLC
• LLC structure is ideal for those entrepreneurs who want to protect their assets.
• LLCs pay lower taxes than a corporation.

 Corporation

• A Corporation is also known as a C-Corp.
• It is a separate legal personality distinct from its members.
• Corporation can be thought of as a distinct legal person.
• Corporation has the right to own and sell property, as well as sue and be sued.
• C-Corp is distinct from an LLC because it can perpetually exist.
• C-Corp structure offers stronger protection to its members against debts and obligations.
• The incorporation cost of the C-Corp is high.
• You can incorporate the C-Corp with one or more persons.
• C-Corp owners are not personally liable for the Corporation’s acts.
• A C Corp is liable to pay nothing but corporate tax.
• It must pay taxes on the profits it earns and the dividends it pays to its shareholders.
• A C Corp can easily raise investment by selling its shares to the general public.
• A C Corp Model is ideal for those companies who want to raise investment by going public with an IPO.

 Special Corporation

• S Corp stands for Special Corporation.
• The specialty of this Incorporation is that an S Corp is not liable to double taxation as in the case of C Corps.
• All the profits earned and losses incurred by an S Corp are liable to its owners' income
• S Corps are not subjected to corporate tax.
• Many states in the USA do not recognize S Corp as a corporate entity.
• Some states consider an S Corp as a C Corp, while others grant them the S Corp status.
• The S Corp status is allotted when the Corporation reaches a certain profit threshold.
• On breaching such a threshold, S Corp is only regarded as a C Corp.
• An S Corp can incorporate a maximum of 100 shareholders.
• Each of these shareholders must be a US national.
• The owners of an S-Corp are not personally liable for its debts and obligations.
• An S Corp is subject to personal tax only.
• An S Corp functions independently from its shareholders as a subset of a C Corp structure.  

 Benefit Corporation

• A Benefit Corporation is referred to as B Corp.
• This business entity is specifically suited for a profit-generating organization dedicated to the public good.
• Along with the charitable deeds, a B Corp is driven by profit and mission.
• A B Corp must submit benefit reports in some of the states of the USA to demonstrate their contribution to the public sector.
• B Corp differs from a C Corp in terms of its purpose as well as accountability.
• But a B Corp is taxed similarly to C Corps only.
• Multiple persons can opt for the B Corp model.
• The B Corp business model limits the liability of its owners with respect to its activities.

Closed Corporations

• Closed Corporations are also known as C Corp.
• They are similar to B Corps but are less formally structured than the Benefits Corporation.
• A C Corp is not required to follow many formalities.
• It has a relatively smaller structure, so bigger organizations don’t undertake such a model.
• In a C Corp, a limited no of shareholders manages its operations
• It does not have a BoD (Board of Directors).
• Share trading with the general public is not allowed in a C Corp.

 Non-Profit Corporation

• A Non-Profit Corporation is a charitable organization.
• An NPC does not earn any profit from its activities.
• An NPC functions for the benefit of society.
• The following organizations usually opt for the NPC structure:
  • Charitable Organizations
  • Educational Institutions
  • Religious Conferences
• An NPC is exempted from all kinds of taxes.
• You can similarly incorporate an NPC as that of a C Corp.
• An NPC must disclose its profit-spendings during the particular financial year. An NPC can distribute its profits among its members. 

 

Documents required for Company Registration in the USA

The documents specified below should be kept ready for registration purposes:

• Passport Copies of all the appointed Company Personnel
• PAN Card, if an Indian national, of all the appointed Company Personnel
• Proof of Identity, such as a Driving License or other photo ID card, of all the appointed Company Personnel
• Certificate of Incorporation of the applicant Business’s structure
• Bye-Laws of the applicant Personnel
• Utility Bills as Proof of Residence:
  • Electricity Bill
  • Municipal Tax receipts
  • Water Bills

Note: The Bill must not be older than two months.

• Digital Signatures of all the appointed Company Personnel
• Trade name of the applicant company

 

Procedure for Company Registration in the USA

Every Company Registration aspirant must go through the following procedure in the USA to register itself as a Corporation or a Limited Liability Company:

Step 1 : Choose and Reserve a Trade Name for the applicant Business

First of all, the Company registration applicant in the US must decide the name of its prospective Corporation which it wants to register in the USA.

• The chosen name must be unique.
• The name must not be similar to any pre-existing company in the States.
• After choosing a unique name, register your IPR as per the available repository at USPTO.
• It will ensure the effective registration of the Applicant’s proposed company.
• The Name Search in the US requires dedicated to research.
• Laws in the US are strict regarding the Intellectual Property Rights protection of a Corporation. 

Step 2 : Choose the appropriate Business Structure for the Business

• The promoters of the applicant company must choose an appropriate business structure for its Incorporation.
• The chosen business structure must be decided on the following parameters:
  • Target Audience
  • Commercial Activities to be undertaken
  • Taxation Structure of the business entity in the chosen State’s jurisdiction
• The Applicant’s promoters must decide which business structure would most suitably achieve their objectives through their proposed business activities.    

Step 3 : File the Certification Application for Company’s Incorporation

The Applicant must file for the Certificate of Incorporation with the Secretary of the respective State of the USA.

The aspired certificate contains important information related to the applicant company, such as:

• Trade name of the Company
• Objective of the Company
• Commercial Activities undertaken by the proposed company
• Chosen Official Address of the Corporation's Registered Office/ Headquarters
• Capital and Fee Structure of the proposed Corporation

Step 4 : Appointing a Registered Agent for the Applicant’s Firm

• A registered agent is a person or an entity appointed to handle full responsibility for handling communication and other related inquiries on behalf of the company.
• He or She is appointed as per the State of Incorporation.
• Non-Resident Incorporation must appoint a registered agent in such regard.
• He must be available during working hours.
• Such entities are also reliable for receiving and signing documents and attending to queries on behalf of the Applicant’s Business.

Step 5 : Prepare the required By-Laws for the New Corporation

The US Authority mandates the Corporation to prepare its By-Laws. It must act as the internal rules of the memos for operations for the internal functioning of the proposed Business.

Step 6 : Appoint the First Directors of the proposed company

• Every applicant company must appoint the first directors for itself.
• They must accordingly hold the First Board Meeting for the Corporation.
• The appointed directors will remain in their position till the conclusion of the FAM, i.e., the First Annual Meeting of its shareholders.
• The first directors can or cannot continue with their directorship after the lapse of the period.

Step 7 : Assign the Stocks to the Corporate’s shareholder

After the Appointment, the Applicant’s Business must issue the stocks to every shareholder who made an investment in the Business.

Step 8 : Obtain the required business licenses for running Company in the USA

As per its business structure, the newly incorporated Company must obtain the required licenses to carry out their business activities in the chosen US state. The required licenses must be acquired in time, failing which can invite the imposition of heavy penalties from the State Authorities.  

Many entrepreneurs, keen on setting up a company in the USA, are offered various benefits, such as credibility in the international market and taxation benefits. However, one must completely conform to the incorporation standards to register their Business in the USA. Therefore, we advise you to seek legal Assistance for the Company Incorporation.

Here comes the Registrationwala to your Rescue. We provide incorporation services to businesses seeking to set up their brand in the US or register a company in the US. Let us see how.

Our Assistance in registering your Company in the USA

Our Incorporation experts provide you end to end company incorporation services in the USA by assisting you in the following manner:

• Collecting and Organizing the requisite Documents
• Compiling the necessary documents for registration
• Reserving the chosen name with the US Authority
• File the certification application for Company’s Incorporation on your behalf
• Appoint a Registered Agent for your Firm
• Prepare the requisite by-laws for the Corporation
• Assist in the appointment of the first directors in the Company
• Choosing the appropriate office location for the Company
• Obtain the required business licenses for running the Company in the USA

We ensure that your company incorporation services requirements for the USA are always on time. Our professionals understand the intricacies of company incorporation procedures in the USA. Thus, we have expedited the process – helping you incorporate your Company at an affordable price.

So, reach out to our Incorporation Experts and realize your dream of starting your own Company in the USA.

 

FAQs

Q1. Where can I check the US corporate register for new incorporation?

A. Visit the official website of the United States company register to check for new incorporation. .

Q2. What is a Company Registration Number in the United States?

A. The USA company registration number is the certification number issued to a newly incorporated corporate entity in the US. This number uniquely identifies a business entity operating on American Soil. 

Q3. What is a Commercial Register in the USA?

A. The Commercial Register is the record of all the active registered business entities in the USA.

Q4. By whom is the company registration certificate issued?

Secretary of State office of the business location

Q5. What is US Federal Authority ?

The US Federal Authority has different federal government agencies and departments in the United States.

Q6. What happens once the validity period of business license expires? 

Every business license is issued with some validity. Once the validity period expires, the company’s name is scrapped from the Commercial Registry book.

Q7. What is the validity of company registration certificate in USA? 

The certificate of company incorporation will be valid as long as you pay the annual fees.