Company Registration in USA
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Every day in the USA, a new business enterprise is establishing, from market giants to small industries. Registration is the basic requirement for the establishment of any enterprise. The USA has the world largest market which is integrated with the lowest tax rate.
Company registration in USA can be easily done online. Citizenship is not required to start a company in the USA.
Benefits for company registration in USA
- Low Tax Liability
- Easier to get a visa to work and Visit in the US
- Easy to do business
- Helps to build a reputation in the market
- Gets recognition
Steps for company registration in USA
Decide the business form: Corporation or LLC
Giving legal status to the business gives various benefits like tax and financial benefits. According to one’s need, choose the right legal configuration to the business. Every legal configuration has a different kind of control over business, registration requirements, business vulnerability to lawsuits and financial needs. For every state/local government has the different registration form for different legal configuration in the USA.
For many states, registration of the sole proprietor is not required, while in others it is mandatory. The sole proprietor must use their own name for the company/business unless they formally register another name.
One can easily change the sole proprietorship to the LLC, once the business gets established and personal liability increases.
Registration of the business name
Owner of the company is known by the name of the company. The business name is mandatory for all the government documents and forms like employer tax identifications, licenses and permits.
In the sole proprietorship legal name is the full name of the owner. In the partnership, legal name is the last names of the partners. For the Limited Liability Corporations (LLCs), legal name is the one that was given to the state government.
Federal Tax ID:
A company with employees, business partnerships and corporations, has to acquire an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. It is required to differentiate between different business entity.
State Revenue Agency Registration:
Sales Tax Permit or Vendor’s License will be required to sell the products which can be easily obtained from the state or local government.
Mention below is the list of some tax liability for the company:
- Tax Permit
It is mandatory to register the business with the state tax agency and complete the relevant tax permits.
- Income Taxes
In LLC, the tax liability is independent of the owners while in the case of a sole proprietor they report their personal & business income taxes using the same form.
- Employment Taxes
Every state and federal has the provision for employment taxes. Business owners with employees are liable to pay.
Acquire licenses and permits:
According to the need of the business or company, everyone has to acquire license and permit, not complying with this rules will result in heavy fines..
Documents required for company registration in USA
- Incorporating Inc. / Corporation. Like Google Inc.
- Certificate of Incorporation No.
- Bylaws of the company.
- Board Approval of Organizational Resolutions.
- Employer Identification Number from the IRS.
- Assistance in Opening a bank account.
- Assistance in Bank Deposit Agreement
Frequently Asked Questions
What is Sole Proprietorship in the USA?
A sole proprietorship is an individual owns the business. The key feature of a sole proprietorship is its easy formation. It is not compulsory for the sole proprietor to be an independent legal entity. Moreover, every state has different laws regarding registration and licensing. The business license can be obtained by municipal agencies in some states while in others it is compulsory to obtained statewide business license. Licensing requirement varies according to the nature of the business and its location.
Registration is not compulsory for the sole proprietorship for every state. They may operate under an assumed or fictitious business name, known as “doing business as” or DBA so that contact information of the owner is made available to the public. Registering a DBA does not create a separate business entity.
What is Limited Liability Company?
Limited Liability Corporation is the combination of corporation and partnership/sole proprietorship. It is a different legal entity which has its own tax identification number, separate bank account. In this corporate structure members of the company, can not be held personally liable for the debts and liabilities of the company.
What is the partnership?
The partnership is created when 2 or more partners start to begin the business activities, it does not require state filing. Formation of the partnership is cost-effective because it does not require to pay a formation filing fee, however one has to obtain the business licence. In partnership, it is not required to hold annual meetings, issue partnership interest, and keep personal asset separate from business assets.
What is limited liability partnership?
The main point of difference in limited liability partnership is that the members of limited liability partnership are not personally liable to satisfy business debts and liabilities. However, Limited Liability does not protect the partners or members of the company for their own personal acts or malpractice.