The United States continues to attract investors and project leaders. The image that this country conveys through its national ethics « American way of life », the tax policies that exist, and its international attractiveness and dynamism make it attractive to start a business.
But for your business creation project in the USA to materialize in the best conditions, it is important to have as much information as possible on the subject in order to avoid certain errors that may weaken your business. If you still have questions about how to register company in USA from India then this article might help!
Starting a business in the USA: the legal statuses you can choose
Creating your business in the United States means having different choices about the legal status with which you are going to build your business.
The Sole Proprietorship
Sole Proprietorship is the American equivalent of individual enterprise. As its name suggests, this status is reserved for any business run by a single person, or by a married couple. In tax terms, Sole Proprietorship is the most interesting legal status.
In addition, to start his activity, the self-employed is not obliged by the law to register as a company. The creation of an American sole proprietorship must, however, have some authorization, if its activity is regulated at the state and/or federal level.
The main disadvantage of this legal status is that the income of the self-entrepreneur and that of the company is the same, which means that taxation is done on the basis of the same income.
Partnership is the American equivalent of the general partnership. This is the social form adapted to a company that is managed by at least two owners. The partnership’s legal status divides the business into shares, for which each manager is responsible for their own funds. Two forms of Partnership are possible in the USA:
- The General Partnership, which divides the business equally;
- The Limited Partnership restricts the liability and control of the managers of the company.
The creation of a company in the form of a Partnership must be registered.
The Corporation is the legal form suitable for a company formed by shareholders. In this American legal status, the assets of the company and the owners are separated. So, the company is legally responsible for its assets and debts.
There are two main types of Corporations in the USA:
- The Close Corporation, or C Corporation, a form of shareholding that lets foreigners in. So in your case, the C Corporation is suitable if you want to create a medium or large business in the form of a Corporation;
- The S Corporation, the creation of which requires the American citizenship or residence of all shareholders.
The disadvantage of the C Corporation is that the company is hit by double taxation: when declaring profits, and when distributing dividends.
The Limited Liability Company, LLC
The LLC, or Limited Liability Company is the merger of the Corporation and the Partnership. On the one hand, an LLC benefits from the operational flexibility and tax efficiency of the Partnership, which therefore avoids double taxation of the Corporation. And on the other hand, it benefits from the limited liability that the Corporation offers.
The benefits of LLC are many, such as:
- The personal responsibility of members of society, which is limited to their contributions;
- Unless specific tax treatment, the absence of taxation at the corporate level;
- Flexibility in the organization of the LLC;
Choose the best business model for your company and requirements and hire the top CFO in India for register a company in USA from India.