Starting a company in the USA is a great way to capture the western market. It is the World’s largest economy by nominal GDP, and the second largest purchasing power parity. Before you understand about the various stages involved in USA company formation, you must first choose in which State you want to incorporate your company.
In this blog you will find a guide that walks you through the steps required to set up a new company. Therefore, following are the steps involved regarding the company formation in the USA.
Step 1: Selecting the type of Entity
It is important to determine what type of company you wish to incorporate. There are several factors such as tax benefits, level of business activity, etc. which is considered while determining the type of entity for business. There are three types of legal entities i.e. Limited Liability Company, C Corporation, S Corporation.
Step 2: Choose a Company name
After choosing the type of entity, the applicant is required to choose the name of the Company. It should be unique and it must be available in the State where you want to establish your business.
Step 3: Register with Federal / State Agencies
It is necessary to have a registered agent who has a physical address in the State in which you are forming a corporation. They should be available during the business hours to sign the legal documents as and when required.
Thereafter, to apply for Federal Employer Identification Number it is also known as business tax Id or EIN, It is a unique nine-digit number assigned by the Internal Revenue Service (IRS). It is used for filing taxes and Identification for your business.
Step 4: Applying for licenses/ permits
Licenses are Permits that allow a business to conduct its operations in the State. A business should also comply with the laws and rules that Governs the License.
Step 5: Documents required for Company Registration in USA
Following are the documents required usually at the time of incorporating of the company:
- Registered office address
- For Corporate shareholders – Copy of PAN Card, Copy of Incorporation Certificate, Memorandum of Association, Articles of Association, Details of Authorized person.
- For Individual – Copy of PAN Card, Copy of Passport, and Copy of Aadhaar Card, Any other ID, and Copy of Utility bill.
- For Proposed Directors – Name, Address, Contact No., Email, Passport, PAN Card, Aadhaar Card, and Latest Utility Bill.
Step 6: Bank Account Opening
Final step is to open a bank account. In some cases, a bank account may be opened remotely without the physical presence of the shareholders/directors in the USA. However, most banks require physical presence of the shareholders/directors in the USA for their due diligence process.
Business Setup in the USA promotes the image and reputation of the company in the international market. It is one of the most powerful countries in the world and will help to build the global brand of the company. Capital is easily available in the US market, when you register a company in the USA, you are allowed to issue shares and raise capital.
It has business friendly laws and regulations. it is easier to sell in the US market. The USA has a highly educated population and Skilled workforce which helps to maintain the economy.