Home / Company formation in USA

Updated on : 13-May-2022    IST | 4 min read

Company Registration Online

For Indian businesses wishing to expand or have a non-resident Indian customer base, there is an excellent opportunity to take advantage of the numerous benefits associated with US company registration, which is one of the most prevalent ways to start a business.Establishing a US company for doing your business is easier than ever before, as the United States of America, with its multicultural population, has a large English-speaking population and is mostly open to foreign firms as a result of its diversity. Dominant as the world's top superpower with a 14 times greater economy than India, it provides one of the most supportive environments for Indian enterprises to grow.

USA company registration

To begin a company in the USA, the first step is to complete the company registration process. There are a few steps involved in registering a company in the USA. The United States government has granted a few reliefs to foreign nationals wishing to establish a business there. By following a simple method, a foreigner can establish or incorporate a company online as an Inc. or an LLC. The majority of foreign people are willing to establish a business in the United States of America due to the country's core technology, infrastructure, and resources.

You should not be worried as Finacbooks will provide you with the most affordable USA company registration package.

Documents required for US company registration

  1. Name of the company
  2. Type of business
  3. The Name(s) of the business partner(s)
  4. Addresses of the business partners
  5. Aregistered business's physical address in the United States
  6. Registered agent (if you have another address)
  7. Ownership percentage

Strategies to enter the USA

In the United States, businesses can be formed as sole proprietorships, general partnerships, limited liability companies, or corporations. However, Indian companies can only register as an LLC or a C corporation in the United States of America. Our accountants at Finacbookswill help you form LLC’s and corporations with access to numerous other benefits.

Incorporating in Delaware State is advantageous not just for Indian nationals and businesses, but also for American businesses, as more than half of publicly traded firms and Fortune 500 companies in the United States of America are established in Delaware.

However, each state in the United States has its own set of state rules and regulations that vary significantly from one another. If the majority of your firm is dependent on a single state and its need for your services, it is prudent to incorporate your business and obtain a Foreign Qualification Certificate. Nonetheless, these three states named - Delaware, Wyoming, and Nevada, in particular, have the most favourable business and tax rules, making incorporation more popular.

  1. Limited Liability Company (LLC) – An LLC is a business structure that combines the features of a corporation and a partnership. Limited liability companies provide owners with limited liability protection in the event of a lawsuit or even bankruptcy. LLC’s are more flexible, and has simple compliance requirements.

    A corporation is required to hold resolutions and shareholders meetings, as well as to record and file minutes of those meetings and votes. On the other hand, LLC’s are exempt from annual shareholder meetings.

  2. C-Corporation – If the goal is to get capital from venture capitalists and angel investors, it is preferable to form a C corporation in the US. Investors, bankers, employees, suppliers, and customers believe corporations are the optimal structure for the majority of firms.

    C-Corporations are distinct legal entities, owned, controlled and managed by the people. As a result, it is treated as a normal individual under the tax rules and thus has the ability to engage in business, and contracts have the ability to bring lawsuits and be sued.

Process of incorporating company in USA

Specific steps must be taken to register a business in the United States, as detailed below:

  1. Step -1 - Determine the entity’s type – The first decision to make is about the type of company to establish. As mentioned previously, there are essentially two models accessible for US corporation registration. One is a Limited Liability Company, and the other is a Corporation or an Inc. This varies according to the size of the entity or the type of investment.
  2. Step – 2 - Appointing a registered and authorized agent – The second step is to appoint a registered and authorised agent. Although there is an online approach for registering a US company. However, only an authorised person or agent may initiate the process of US business registration. As a result, it is always suggested to utilise the services of an experienced agent to initiate the process of forming a US company. The agent is responsible for document collection, documentation, and subsequent submission to authorities. Additionally, he is responsible for receiving any communications or reports from the appropriate authorities in this regard and adhering to any applicable rules.
  3. Step – 3 - Choosing a company name – The next step in registering a business in the United States is choosing a company name. That name must be unique and not related to any pre-existing business. The agent begins by doing a search for the name availability, and then applies to the authority for name approval.
  4. Step – 4 - Document collection and submission with authority – The agent is responsible for the collection of all records pertaining to the company's members, proposed directors, shareholders, and any other official. Additionally, the agent must submit an application with authorization for appointment.
  5. Step - 5 - Employer identification number (EIN) generation – After an agent submits an application, the US Internal Revenue Service generates an employer identification number (EIN) or a tax identification number. An employer identification number (EIN) is a unique identifier assigned to an incorporated company that is required for post-registration or tax purposes.
  6. Step – 6 – Certain businesses are required to produce a Certificate of Authentication or an Apostille Certificate to the authority if the company is not a member of the Hague Conventions. Other businesses are not required to submit the same information.
  7. Step – 7 – The next step is to obtain authorization to operate a business by registering for a vendor's licence or a state tax permit.
  8. Step – 8 - Obtain appropriate state tax permits – As state laws differ, so does the tax rate. It is critical to register the establishment with the state tax authority and to obtain all required tax permits. Additionally, after registering a US corporation, the corporation is obligated to collect and submit income and employment-related taxes to the state's appropriate authorities.
  9. Step – 9 - Obtain appropriate licences and permits – Regardless of the kind of entity, whether an LLC or a corporation, each entity is required to obtain specific state-mandated licences and permits. In the event of non-compliance, severe fines may be levied.

Benefits of US company registration

  1. Business-friendly laws and regulations.
  2. Personal assets, such as a home or savings, are safeguarded against company liabilities.
  3. It is easier to incorporate a firm in the United States.
  4. Corporate income tax rates are the lowest.
  5. Under US law, the names of corporate directors/shareholders are not required to be publicly disclosed.

Difference between LLC and C Corporation

LLC C Corp
Members are the owners Shareholders are the owners
Members can create and manage the structure. Shareholders elect directors who oversee the business's operations.
It is appropriate for small firms with a limited number of shareholders Appropriate for medium-sized to much larger firms with numerous shareholders
In an LLC, members are not personally accountable In a C corporation, shareholders are not personally accountable.
Transferability is planned, subject to the operating agreement's limitations. Here, shares can be simply transferred.
In general, external stakeholders dislike LLC’s because they are primarily structured to act as partnerships. Foreign investors prefer C corporations over LLC’s because they contain stock that is distributed among shareholders.

Company formation FAQ’s

No, you do not need to travel to the United States of America to incorporate. It is possible to do it without ever leaving India.

No, a foreign individual without a passport or a US visa may incorporate a US LLC or Corporation.

The Employer Identification Number (EIN) is a nine-digit number issued by the Internal Revenue Service (IRS). An EIN is required to create a bank account in the United States, hire employees, and file numerous business tax filings.

All Delaware LLCs and corporations are required to keep a registered agent in the state of Delaware who is responsible for receiving and processing all official communications on the company's behalf.

A business obtaining US incorporation is not required to have its headquarters in the state of Delaware.
When compared to an S corporation, an LLC offers greater operational flexibility and fewer corporate requirements.For example, an S corporation cannot have more than 100 stockholders and is required to organise an annual stockholders meeting. However, owners of S corporations may pay less tax than owners of LLC's.

No, there is no such minimum amount of limit specified for deposit but it differs from bank to bank.

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Due Dates

  • Due date for deposit of Tax deducted/collected for the month of April, 2022. However, all sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income-tax Challan

    May 07th ,2022
  • Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month of March, 2022

    May 15th ,2022
  • Due date for issue of TDS Certificate for tax deducted under section 194-IB in the month of March, 2022

    May 15th ,2022
  • Due date for issue of TDS Certificate for tax deducted under section 194M in the month of March, 2022

    May 15th ,2022
  • Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of April, 2022 has been paid without the production of a challan

    May 15th ,2022
  • Quarterly statement of TCS deposited for the quarter ending March 31, 2022

    May 15th ,2022