This part highlights the key points that a company should consider before incorporating a business in the US. Coming parts will cover each section in detail.
Decide on ideal entity structure
- Choose entity structure among Branch, Subsidiary, Holding Company, or Separate Entity that best fits your business requirement.
- Each has unique merits, and the ideal structure should be picked based on your company needs, plans, shareholders, investment options, tax, and legal compliances. Details in an upcoming post.
Ideal entity type
- Choosing entity type has 2 options - LLC (Limited Liability Company) or Inc (Incorporation).
- For taxation, LLC classification: Single member, Partnership, S Corp, C Corp
- Inc classification: S Corp, C Corp
- Consider business nature, shareholding structure, and taxation for the ideal choice.
Ideal state for registering entity
- Foreign companies prefer Delaware due to its business-friendly laws, robust court system, and tax benefits. Yet, franchise tax implications pose challenges in Delaware.
- Consider business nature, customer base, and prospects when making the choice. More details in upcoming posts.
Taxation
- US has taxes at various levels which includes Federal, State, County and City.
- There are also several types of taxes: Income, Sales, Payroll, County, City, Property taxes etc.
Corporate laws and secretarial compliances
- Foreign businesses registering entities in the US must adhere to corporate laws and secretarial compliances.
- This includes capital regulations, franchise tax, annual return fees, shareholder and board resolutions and timely corporate filings to ensure compliance and smooth operations