US (United States) company formation
Company formation in US (United States) company formation
The US is arguably one of the most important and stable players in the world economy. There are many benefits to having a company in the United States. In addition, it is not as difficult to set up as you might think.
Advantages of company formation in the US
The different types of companies have different benefits, which we will discuss later. However, there are universal benefits that make American companies attractive:
- Simple, low-administrative start-up process
- Low start up costs
- Tax form selectivity, favorable tax environment
Requirements of company formation in the US
In order to start a company in the US, we need a few basic things:
- Selecting an available company name.
- Selecting a registered agent to represent the company in that state.
- Personal details of managers and members. However, owner information will not be public, only the information about managers.
Companies with different statuses and their characteristics that can be set up in the US
Two of the most popular companies in the United States that can be established: Corporation and LLC. But what do they mean, what characteristics do they have and what are their benefits.
General Corporation, Inc.
For medium and large companies, General Corporation is the most common corporate structure. Features:
- Unlimited number of shareholders
- Independent legal entity
- Profit and loss are taxed at company level
- Possibility to raise capital by selling shares
- Easy transfer of shares
- Tax benefits
- Shareholders or directors are not required to be a resident or citizen of the United States
Limited Liability Company, LLC
A limited liability company (LLC) is a mixture of a general corporatio and an association. As a general rule, the profits and losses of an LLC are shared with its members, thus avoiding double taxation. Advantages of LLC are:
- Lack of taxation at company level unless explicitly requested
- Members’ personal liability is limited to their investment within the LLC
- The LLC creditor is not in a position to take control of the LLC’s assets or the voting rights of the member
- The profits and losses of the LLC are distributed among the members in the proportion they determine
- Unlimited members
- It is possible to omit the usual corporate formalities (such as minutes, by-laws, meetings, officials and directors, etc.)
- The LLC Operating Agreement can be written in any language and is not required to be translated into English
- Members or leaders are not required to be resident or citizens of the United States