How company incorporation works in the USA?

Establishing Your Company in the US: Easy Steps!

Establishing your company in the US is not as big a hassle as most people believe. For a non-US citizen, the procedure is more or less the same with a few exceptions. There are certain rules on how company incorporation works in the US.

How Does Company Incorporation Work in the USA?

Various myths surround the general idea of company incorporation in the United States that drive people away from expanding their business in the US markets. Some of the common myths are as follows:

• SSN & Green Card Is Compulsory: Companies can be formed in the US without the necessity of a personal address as well.
• Shareholders/Directors Need To Be A US Resident: Non-US residents can incorporate a company in the US.
• Own Physical Address Is Compulsory In The US: The United States is not the highest-taxed country, and you don’t need to have a personal address in the US to incorporate a company.
• The United States Is The Highest-Taxed Country: The tax rates include the TCJA that has reduced the US federal tax from 35% to 21%, which is comparatively lesser than in many countries.

Contrary to these myths, company incorporation in the US operates on the state level and not the national level. Before considering how company incorporation works in the US, you need to consider certain factors as to why company incorporation is essential for you. Once you cross-check the necessary aspects for your company incorporation, you should answer the following questions:

1. Where to Establish the Business? The most critical decision is where the business should be established. Once it is physically built, it will be difficult and expensive to change the location. Keep in mind the labor cost, utilities cost, cost of transportation, and connectivity factors while making your decision.
2. Where to Incorporate the Company?
3. What Type of Company to Be Incorporated?

For Company Incorporation in the United States by a Foreign Resident:

Follow these two simple steps:

1. Make An Application To The State Secretary: Establish a registered agent who will have a valid physical address in the selected state.
2. Establish A Registered Agent: The registered agent will be authorized to receive legal documents on behalf of the business and will operate during standard business hours. However, a registered agent’s address is to receive legal/official documents and doesn’t serve as an authorized address.

A US mailing address (not necessary in the state of formation) is required for applying for an EIN (Tax ID) and opening a banking account. You cannot use the registered agent’s address in this case unless a physical mailing address is absent. The address of a “Mail Forwarding Service provider” can hence be utilized.

To incorporate your company as an LLC or Corporation, file the documents with the Secretary of State along with the filing fees. These documents are referred to as “Articles of Incorporation” or “Certificate of Incorporation”. For LLC formation, the documents will be called “Articles of Organization” or “Certificate of Organization” respectively.