Starting a business in the United States is a process that involves several stages, from initial planning to legal registration. The main steps are choosing a legal structure, registering the business at the state and federal levels, and complying with tax obligations.
Planning and Legal Structure
The first step is to decide on your business’s legal structure. This will affect personal liability, taxes, and how the business is managed. The most common options are:
Limited Liability Company (LLC): Offers personal liability protection similar to a corporation, but with the tax flexibility of a partnership or sole proprietorship. The owners, called members, are not personally liable for the business’s debts. This is the most popular option for small businesses.
Corporation: A legal entity separate from its owners (shareholders). It offers the greatest liability protection but is more complex to establish and maintain. Corporations can be C-Corps or S-Corps, which affects how profits are taxed.
Registration and Documentation
Once you’ve chosen a structure, you need to register your business.
Business Name: Choose a unique name that complies with state naming laws.
State Registration: Most businesses register at the state level with the Secretary of State of the state in which they will operate. You must file formation documents, such as the Articles of Incorporation for a corporation or the Articles of Organization for an LLC.
Employer Identification Number (EIN): This is similar to your business’s Social Security number. You need it to open a business bank account, hire employees, and file federal taxes. You can obtain it for free through the IRS website.
Licenses, Permits, and Obligations
To operate legally, your business will need certain licenses and permits.
State and Local Licenses and Permits: Requirements vary by state, city, and type of business. This may include sales licenses, health permits, or professional licenses.
Tax Obligations: Once your business is registered, you must comply with tax obligations. This includes:
Federal Taxes: Filing annual tax returns with the IRS. Your business’s legal structure will determine how profits are taxed.
State Taxes: Paying state income taxes and, in some cases, sales taxes.
Local Taxes: In some cities, local taxes must be paid.
Opening a Business Bank Account: To keep personal and business finances separate, it is crucial to open a bank account in the business’s name. This will simplify accounting and tax filing; you don’t need to be a U.S. resident because the account is owned by the business.
Additional Considerations
Registered Agent: Many states require LLCs and corporations to appoint a registered agent, who is the person or company responsible for receiving legal documents on behalf of the business.
Operating Agreement: Although not always required, it is highly recommended for an LLC. This internal document describes how the business will be managed, including profit distribution and member responsibilities.
International Partner: If you are a foreigner seeking to open a company in the United States, it is possible to do so without being a resident, but the process can be more complex and requires legal advice to manage visa and tax issues. ITC provides the necessary advice to establish a company as a non-resident foreigner in the United States.
Create your company online in the United States with ITC
ITC offers the service to create your company online in the United States, providing advice and support throughout the creation process with various plans tailored to your business’s requirements.
Other Requirements
To successfully establish a company in the United States, it is essential to have a mailing address where you can receive communications from the bank and the various government entities where the company is registered.
ITC provides a virtual mailbox service, a mailing address where mails arrive and can be consulted online.
