Many Startup owners and Entrepreneurs want to start businesses in the US due to many factors such as a Stable Economy, wider Consumer Base, Huge Consumer Spending, Technological Advancements and an Established Infrastructure. Many Startups want to Incorporate due to the easy accesability to Investors and they prefer to Invest in Businesses Incorporated in the US. Steps to Incorporate your business are as follows:
1. Choose a State for Incorporation: The first and foremost step is to choose a State in which you want to Incorporate your Business, You can Incorporate in any state. However, Delaware and Wyoming are the top choices for Incorporation.
2. Choose a Business/Entity Name: After deciding a State, you have to decide your business name and check the availability of the same. If the Business name is available, then you can move on to the next step.
3. Choosing a Right Business Structure: The Most Important Step is to choose the best structure for your Business, You can choose between the LLC, C-Corp or S-Corp (Non-resident cannot incorporate S-Corp).
Limited Liability Company (LLC) is among the Top choices for Entrepreneurs due to its many benefits. LLC protects the Owner’s personal assets for LLC’s Debts and liabilities. LLC is a Hybrid entity that combines the characteristics of a Partnership and a Corporation. The main benefit that LLC Enjoys is passed through taxation, All Profits and Losses are passed through to members and members report Profit/loss in their returns.
C-Corp which is commonly referred to as a corporation has a more complex structure than LLC, C-Corp is a Separate legal entity and is Distinct from its Owners i.e. Shareholders. It is beneficial for Businesses looking for Funding via a sale of stock. Another advantage that C-Corp can offer to its employees are Stock Option Plans and robust retirement plans. The most important thing to note is that C-Corp are subject to double taxation, once a corporation pays tax on its earnings and then shareholders are also taxed on dividends received.
4. Appoint a Registered Agent: A registered Agent is required to incorporate a business in the US, A Registered Agent provides their address for Incorporation and will receive documents on your behalf and forward them to you.
5. File Incorporation Certificate: Once you have decided on your Business Structure and have appointed a registered agent, you have to file incorporation forms with the State and make a payment of the State Filing Fee. Once approved, Your LLC/C-Corp is formed and you can start your business in the US.
6. Apply For EIN: Employer Identification Number or EIN is a unique Tax Identification code for Businesses. EIN will be required for many purposes including Filing taxes and opening a Bank Account in the US.