If you just started a new business and want to get it registered, then this post is for you.
Getting a new business registered in the US might seem a little frustrating, whether you are handling it yourself or someone is getting it done for you. But the good thing is that this post is going to walk you through all the processes so that you get your business going as soon as possible and without any issues.
Getting Your Business Registered In The USA
So, we’ve decided to make it a smooth sail for you so as to reduce the stress and time. All you have to do is carefully follow these steps in order.
1.Pick A Structure For Your Business
You must be certain of the structure under which you want the business to operate. You should note that this structure will influence certain things, like the kind of business you want and the amount of taxes you are going to be charged. There are lots of business structures from which you can choose to operate, but we like to lay emphasis on the popular ones: sole proprietorship, partnership, corperation, and limited liability company.
You are still a sole proprietor if you are starting and have yet to decide which structure you want to operate. A one-man business might look appealing to anyone, but if risk and losses bounce in, you suffer all by yourself.
This is a kind of business owned and managed by two or more people, with mutual agreement from both parties.
Though this has its own pros and cons too, at least if issues like low sales or unfortunates happen, you get to contain them as partners.
Registering A Limited Liability Company in USA
With this structure, your assets are being differentiated from those of your business. So in case anything goes wrong, your assets still remain yours. Also, you pay both taxes differently.
If you want to go the LLC way, it’s important that you get an agent, as most states in the US often ask for your agents. This firm or person accepts legal and tax files on behalf of your business. You can just check out available LLC agents to help you handle this stuff or you can employ a friend. But it’s best you use agents to avoid any issues that could arise as a penalty for you.
This is mainly for huge businesses, though small businesses can join in, but it may appear rough. A partnership tends to separate a company from its owner(s) or shareholders. Here, the business pays more taxes, gets the profits and losses and is accountable for its own financial situation without the shareholders.
In a situation where the owner decides to walk away, nothing changes; it’s still business as usual. They are of two types: C-corporation and S-corporation. With the C, the taxes are much like the company itself. When shareholders receive dividends, they again pay taxes on it. While the S-Corporation is a simple type and saves tax rates and surges, registering an S-Corporation business will require extra paperwork with the state IRS an limited to nationals alone.
2. Business Location
After getting done with the business structure you are settling on, the next step is choosing a perfect location. Many nowadays want to run everything online to evade or reduce tax costs. You can just get a small place for taxes and for official meetings.
If you are running an online business like e-commerce, some states in the US don’t charge you for tax except at the federal level. As a result, you can locate your company in any of them.
3. Choosing A Name For Your Company
Of course, since you want to register a business, you need a name. The name you give your business has to stand out and be one that’s unused by others.
For most sole proprietors and partners, their business bears their own name. You can do the same too, but if you are going to call it something else, then you certainly have to fill out a Doing Business As (DBA) document. You should also note that it doesn’t make yours trademarked.
Every state has its own way of doing things or naming businesses, but you should be careful to use the suffix “Inc” or “LLC” to avoid mixing it up with a government agency like CIA or FBI.
Once you are done getting a name for your business, you proceed to submit it to the state to approve it. Already used names or ones termed nonusable will get rejected. So we advise that you check the availability of the US trademark office before submitting. But for e-commerce businesses, you can check with domain registration companies and see if yours is still available. Also note that it doesn’t make sense when your name differs completely from your URL address.
4. Register Business With The Federal Government To Get An EIN
Having registered your business with a state agency is not enough; you will need to get it registered at the federal level too, so you can get a federal tax number, sometimes called an Employer Identification Number (EIN). An EIN is like a social security number for your business.
With your EIN, it’s easier to submit your tax forms to the government (federal and state) with other relevant documents. Getting an EIN should be less of a worry to you as you can get that through an online EIN form. With the website, you can know if you are going to need it or not.
5.Get License And Permit
As long as you are offering products or a service to people, you will need to operate with a license which permits you to do so. You should also know that there are different kinds of licenses and that they vary between the federal and state governments. You can make use of the small business administration website by simply filling in your business and location to see which ones you will be needing.
Depending on what your business is all about, who knows, you might not even need a license to function, but it’s necessary that you don’t leave anything unsettled to avoid unnecessary risk that might cause your business to be fined heavily.
6.Open A Bank Account
If you are setting up a corporation or LLC, it means separating your personal finances and assets from those of your business. In view of this, you are going to need a separate bank account for your new start-up. A business bank account that aligns with the company’s name and niche.
Most banks in most states in the United States may ask you for evidence to prove you are a registered business and not framed up before you can own a business account with them. It’s your choice to make if you are going with a bank you are already a customer with or a new one. Some of them might even demand that they pay your office a visit to be sure you are real and not faking it.
One major advantage of having a separate business bank account is that it lets you control and see how transactions are flowing. Plus, it looks more mature and official if a client pays into your company’s account instead of your own personal account.
Cost Of Registering Business In The USA
It’s not even that expensive to get your company registered. But it depends on the state and your business type. Even cheaper in the US than in some other countries.
Getting your LLC or corporation registered will cost you between a hundred and a thousand dollars depending on your business size, type, and location. Smaller ventures like sole proprietorship and most partnerships don’t cost anything to get registered as long as you are a native of the state.
Can Foreigners/Non-resident Also Register Their Businesses In The US?
Of course, anyone can have their business registered in the US.
You don’t have to stay or be a citizen in the US before your business can be registered. As a matter of fact, you don’t need to move in at all.
All processes are still the same for foreigners, non-residents, and nationals. You go through the same procedures to get your business registered under the law and start doing business.
If you are creating an LLC, it’s the same but when it comes to corporations, you are only allowed the C-corporation as the S-Corperation can only be registered by nationals.
You have to get an EIN so that you can pay taxes to both the state and federal government. A US address is also required if you intend to run it from outside the US.
When opening your business account, you will also need a US address. Though Due to the influx of digital banks, you can open a bank account from anywhere without leaving your home. But physical banks will demand they meet you in person to have an account with them.
Working In The United States
You should note that if you are running your business from outside, it’s still your business as long as you are registered, but if you want to run it physically in the US, You will need to get your visa and passport.
There are different kinds of USA Visa you can get, each with its own restrictions and limits. There are ones that allow you to live for weeks, 3 months, 6 months, or even 2 to 3 years.
However, there may be some businesses that you are not permitted to conduct with these visas. So the best thing is that you get a green card, which will allow you freedom to live and work as many years as you want. Plus, establish any business of your choice.
How Long Does I Take To Have Your Business/Company Registered in USA
After filling out the necessary documents, your files go straight to the secretary of the state’s office. They will review and check all your documents before they can approve them. So it takes time.
In some states, it takes 4 to 6 weeks for it to be approved. It’s faster in states like New York if you want to make it quick. Though you can shorten the time too in other states, it will come at an additional cost to shorten it to 2 to 3 days.
As a foreigner or non-resident
For non-residents, it might take lots of time to even get your Employer Identification Number (EIN). At least 30 days, or even more if you are a foreigner, will be taken care of by a special IRS agency unit. But if you’re a citizen, it’s quite a smooth sail.
How To Choose A Location For Your Business
Every business largely depends on location. Where your business is located goes a long way in determining what will become of your business in the future.
These factors can be taken into consideration before you choose your location.
This goes a long way depending on the type of business you are planning on doing. For example, if it’s a hotel business, you will get more customers in Los Angeles than if you are based in Alaska.
If your business is one that’s already occupied by many in a particular state, It’s best you try a state with less competition.
-Nearness to supply
It’s important, especially if your company deals with production. It is not advisable to locate factories or warehouses far from your main office.
Yeah, the tax you pay in Michigan is much less than the one you will pay in California. So this should be considered too, as the tax rate is not the same in every state in the US.
-Cost of operations
The cost of operation matters too. Running a business is quite cheaper in less urban states.
With all these being mentioned, your budget gets to determine all these factors highlighted.
Getting your business registered in the US is a straight-forward procedure. All you have to do is do some research about what you need and submit the necessary documents. You don’t even have to live in the United States; just obtain an EIN and a US Account number. Digital technology has made everything easy as there are tons of agencies online to help you do it all. What you need is to arrange appropriate funds and documents, and then you will be approved and start running your business.