9th Floor Diamond Plaza Building, 34 Le Duan, Ben Nghe Ward, District 1, Ho Chi Minh City
info@bkclaw.vn
0901 333 341
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Establishing a company in the United States is not only an important step in the entrepreneurial journey but also opens up numerous development opportunities. With its dynamic business environment and stable legal system, the United States attracts millions of entrepreneurs from around the world. However, this process requires a thorough understanding of the conditions, procedures, and estimated costs involved. This article provides customers with a comprehensive overview of the key factors to consider when starting a business in this country, from selecting the appropriate business structure to the necessary documents and cost estimates.
Once the company is established, investors must submit annual company reports. The main dossier updates the company address and registered agent. In addition, the enterprise must hold an annual meeting and record the minutes of that meeting. Furthermore, the business owner must comply with the sequence and document requirements.
Key requirements when establishing a business in the United States:
Regarding the establishing entity: For a limited liability company, at least one member of the company must be a U.S. citizen, permanent resident, or a representative legally permitted to reside and work in the country. That individual must reside in the state where the principal office is located.
Regarding the company name: The name must not duplicate any other enterprise to avoid infringement of trade names and trademarks. Therefore, it is advisable to prepare at least three company names. You can verify availability through the name search procedure and Business Name Registration.
Regarding company information: The owner must fully complete the company establishment documents to specify the company name, registered name and address, total number and par value of authorized shares, and the name and address of the company’s correspondence.
A sole proprietorship is generally considered the simplest form of business. It is owned and operated by a single individual or member. This means there is no legal separation between the owner and the business itself. This form is the most common among small businesses. However, the business owner bears unlimited legal liability in sole proprietorship companies.
– Advantages:
– Easy and straightforward establishment with minimal legal requirements.
– Full control and decision-making authority over all business matters.
– Profits are not subject to corporate tax but are included in personal income.
– Disadvantages:
– Unlimited personal liability for debts and legal obligations.
– Difficulty in raising capital.
A partnership in the United States is a business structure in which two or more individuals share ownership of the company. Partners may bear sole liability for business debts, regardless of the allocation of losses and profits.
| Type | Limited Partnership (LP) | Limited Liability Partnership (LLP) |
| Specific Characteristics | Only one general partner manages the business and bears unlimited liability for the partnership’s debts with both business and personal assets. All other partners are limited partners who contribute capital but have no management rights. | All partners have equal decision-making rights and bear unlimited liability for the partnership’s operations, but liability is limited to each individual partner. One partner is protected from the debts of other partners and is not liable for their actions. |
| Common Characteristics | Partnerships must report taxes and file annual tax returns. Each partner or owner reports and pays taxes based on their share of profits. Like sole proprietorships, partnerships have extended liability. | |
– Advantages:
– Shared resources and responsibilities.
– Easy to establish and manage.
– Disadvantages:
– High risk due to unlimited liability for partners.
The Limited Liability Company (LLC) is a common legal business structure that provides members with liability protection. This form is popular due to its tax benefits and limited liability protection. LLCs are pass-through entities, meaning income is passed through to personal tax returns. LLCs allow members to be shielded from personal liability. This means that if the business incurs any liability, individual members are not personally liable. This protects the personal assets of any business member in the company.
– Advantages:
– Personal liability protection for members.
– Flexible taxation, which can be treated as a corporation or pass-through entity.
– Easier management compared to corporations.
– Disadvantages:
– Must comply with certain legal reporting requirements.
| Type | C-Corporation | S-Corporation |
| Characteristics | A separate legal entity distinct from its owners. Corporate profits and taxes are calculated separately, and it has separate liability. This form provides the best protection for business owners from personal liability. However, it involves higher setup and operating costs, requiring strict operational procedures, accounting books, and reporting. | Similar to a C Corporation but avoids corporate tax. Profits are passed directly to shareholders and taxed only at the individual level. However, an S Corporation cannot have more than 100 shareholders, and all shareholders must be U.S. citizens, making it unsuitable for new immigrants who are only permanent residents. Many U.S. states do not recognize S Corporations and apply similar rules as for C Corporations. |
Note: Profits in this form are taxed twice: 21% corporate tax when the company earns profit, and personal income tax when dividends are distributed to shareholders. A major advantage of a C Corporation is its ability to raise capital by issuing shares and attracting talent through stock options. This structure suits businesses with medium to high risk and large capital-raising needs.
– Advantages:
– Personal liability protection.
– Ability to raise substantial capital.
– Disadvantages:
– Higher setup and maintenance costs, requiring strict compliance with legal regulations.
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Selecting a company name is a key step in business registration. The name must not duplicate any other enterprise in the same state to avoid trade name and trademark infringement. Therefore, prepare at least three company names. You can verify availability through the name search procedure and Business Name Registration.
To maximize brand recognition, acceptance, and visibility among investors, it is essential to appoint a registered agent when registering a business in the United States.
In some states, if the company is not yet ready to operate and wishes to prevent others from registering a similar name, it may reserve the name. The procedure is similar to company formation but does not require tax registration and has no operating term (some states allow tax reductions/exemptions).
The name reservation period is approximately 6 months and can be extended from 6 months to 2 years depending on the state. The name reservation fee is low, typically several tens of USD for 6 months. A foreign company established in one state wishing to open in another state follows a similar procedure as entry from abroad but is simpler.
Depending on the enterprise and business sector, you may register various state taxes such as corporate income tax, sales tax, and payroll tax.
– Register an EIN (Employer Identification Number) with the Internal Revenue Service (IRS) for tax purposes.
Prepare the dossier:
Submit the dossier:
Submission methods:
– Direct submission: Bring the dossier to the competent authority.
– Indirect submission: Through the electronic portal.
Receive results:
Upon verification of a valid dossier, the competent authority will issue the company establishment certificate. The issuance time is approximately 30 days from receipt of a complete dossier.
After dossier confirmation, certain specialized sectors such as pharmaceuticals or healthcare require registration with corresponding regulatory agencies. These agencies may issue a business registration license and permit immediate operation. Subsequent steps include tax registration and opening a corporate bank account.
When registering a business in the United States, opening a bank account is indispensable for business operations.
If you wish to open a corporate bank account for business purposes, services in the United States rarely support this directly. Doing it independently can be time-consuming and costly, so consider a more optimal solution.
Instead of opening a corporate account, you may open a personal account, which is much easier and worth considering. If suitable for future operations, proceed with opening a personal account.
Below are some initial costs to consider when a newly established enterprise begins operations in the United States:
The support service for company establishment procedures in the United States at BKC Law provides a comprehensive solution for entrepreneurs and investors. We help clients understand the legal process, from selecting the appropriate business structure, registering the company name, to obtaining licenses and handling tax matters. Our team of experts accompanies you from the initial steps, ensuring all procedures are completed quickly, accurately, and in full compliance with legal requirements.
With a team of senior lawyers with many years of experience, solid legal knowledge, and strong bilingual consultation capabilities, BKC LAW is confident in being one of the best legal partners on the market to support investors in carrying out investment activities in the United States.
To receive free legal consultation at BKC Law, please contact our lawyers using the following information:
Telephone: 0901 3333 41
Email: info@bkclaw.vn
Branch in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Branch in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City
Related articles:
Comprehensive Corporate Legal Consulting Services in Binh Tan District
Dedicated Lawyer Services for Enterprises
Dịch vụ tư vấn đầu tư ra nước ngoài cập nhật năm 2024: Hồ sơ và thủ tục
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41 Rockets, Binh Tri Dong B, Binh Tan District, Ho Chi Minh City.
info@bkclaw.vn
0901 3333 41
9th Floor, Diamond Plaza Building, 34 Le Duan, Ben Nghe Street, District 1, Ho Chi Minh City.
info@bkclaw.vn
0901 3333 41