In this article, We’re going to talk about How to Register a Private Company In USA? Registering a Company in USA can help you get a lot of benefits in your business.
You’re ready to start your own business, and you’ve decided that a private company is the right structure for you. Great choice! But now what? How do you go about registering your company in the United States?
It can seem like a daunting task, but with this step-by-step guide, you can do it yourself in no time. We’ll walk you through the process of registering your company, from deciding on a name to filing the necessary paperwork. Here are some simple steps you need to follow for registering your private company.
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☑️Choose The Business Structure
Determining what type of business you’re gonna start or what your aim is is a different thing. Don’t confuse those things with choosing the legal business structure. This first step helps you know your daily operations, sets the tone of your business and dictates tax filing. There are 4 types of legal business structures that can be adopted.
This type of business structure is mostly adopted by small businesses. It is owned and run by only one person. It is the easiest and cheapest way of establishing a business. But, the owner of this type of business is solely responsible for all the liabilities experienced by the business. Moreover, investors don’t usually invest in this type of business.
In this type of business structure, two or more people are associated with a single business. Usually, an agreement is signed between the owners to avoid future complications. The tax is paid by each partner according to their shares. This type of business is very easy to create and manage. But, all the partners are personally liable for business debts.
Limited Liability Company (LLC)
A limited liability company (LLC) can be considered a hybrid of a sole proprietorship, partnership, and corporation. The owners of an LLC are known as “members”. These members may include individuals, foreign entities, corporations, and other LLCs. This type of business is owned by people who want to be protected from personal liability. In other words, not the owners but the entity is responsible for all liabilities incurred by the company.
A corporation entity is the most complex to create and operate. A corporation is appropriate for large and established companies with a large number of employees or factories. The corporation is responsible for paying all the taxes while shareholders have limited liability. There are two types of corporations. One is “S-Corp” and the other is “C-Corp”. C-Corps are usually associated with double taxation while it is not the case with S-Corps. Double Taxation means that profits or earnings are taxed at the entity level as well as the individual level. The process of establishing a business is usually very costly and rigorous.
☑️Choose The Business Location
You must select a location for your business once you’ve determined the type of business you intend to register. You need to determine where you want to create your LLC or whatever business structure you have chosen so that you can register your business. You might only use this address for tax purposes and as the place where your mail is delivered because so many organizations these days are created entirely online.
You are not mandated to register your e-commerce firm in the state where you now reside. In fact, a small number of states only require federal tax returns since they have no state taxes. If you have an address to use in one of these places, this can save you money.
☑️Choose The Suitable Name
You can’t register your company without a name. You need to come up with a suitable name for your company. Most small business owners or sole proprietorship owners choose their name as the company name. But, you need to be professional while choosing a name. Go for a name that makes you stand out from the rest of the competition. The name of your company should reflect the idea of your business.
You need to keep in mind some general guidelines while coming up with a name. It is required to include information such as “Inc” or “LLC”, according to the business structure you are registering for. Be careful not to choose an organization name that can be confused with a government agency.
Once you come up with the name, you need to submit your paperwork to the state agency to get approved. State agencies can reject your approval if the name is already registered or if they catch some other issues.
☑️Get the Federal Tax Number
After registering your company at the state level, now you need to register at the federal level. For that purpose, you need to get a federal tax number. This number is also known as EIN (Employer Identification Number) and acts like your company’s social security number. There is a site IRS that allows you to get this number easily from its online EIN form. This site also helps you to know if your business actually needs this number.
☑️Get Licence and Permissions
Prior to registering a business, you need to make sure that you have got all licenses and permissions to do your business legally. These can differ according to the state or federal level. In general, countries and local governments only require what the state and federal governments require in terms of licenses and permits for a physical location. However, before starting sales, it’s important to make sure you’re not missing anything. Not having the required documentation or licenses could cost you penalties or put your company in danger.
☑️Create Bank Account
If you are registering your company, it means you are separating your business funds from your personal funds. For this purpose, you should make a separate bank account that is only concerned with the business. Mostly, it is recommended to complete the business registration process before you can create a bank account. To demonstrate that you are an actual business owner, you will need to have these documents. Keep in mind that some banks could demand a physical visit.
Additionally, keeping track of the amount of money coming into and leaving your organization as well as your monthly revenues will be made easier with a separate business bank account. Having customers pay into a corporate account rather than a personal one also presents a more professional image.
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How Much Time is Consumed in Registering a Company?
The Secretary Of State Office of Business Location registers the companies in the USA. When you submit your registration proposal, the government reviews all your information before approving the registration. The time taken by this process varies depending upon the states. In most states of the USA, usually 4-6 weeks are taken by the Secretary Of State Office in approving the registration proposal of the company. If you want this time to be reduced to 2-3 days then you will have to pay additional fees.
Can Non-residents Own an LLC in the USA?
Yes! Non-residents can also own LLCs in the USA. It is not necessary for you to be a US resident for owning an LLC. The business structure of LLC allows everyone to own it no matter their residence. However, other business structures like S-corporation do not give this opportunity to the Non-residents. S-corporation does not allow non-citizens to own any shares in the corporation. Therefore, foreign residents also prefer to go with LLC.
If you want your private company to be registered in the USA, you have to follow 6 simple steps. It is recommended to follow the steps in order so you can avoid any hindrances. Choose a legal business structure, business location, and business name. After that, get EIN and all other licenses required to register your company legally. After registering the company, make sure to set up a separate bank account only for business funds.
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