To establish a company is a matter of the individual State. So the rules are different in all of the fifty States in the United States.
- A Limited Liability Company
- The Corporation
- A need to register with the Internal Revenue Service
- A Registered Agent
- Must have Corporate Book and Seal
Let’s return to the example of California. Let’s say you want to establish your company in California.
The two basic choices for companies are a Limited Liability Company, a so-called LLC or a Corporation.
The basic differences are as follows
A Limited Liability Company
A Limited Liability Company doesn’t have shares. It entails members, real members who operate on behalf of the organization and has ownership over a part of it.
An LLC has a huge advantage, which is “Taxes”. It just pays duties once.
The taxes are paid through the tax returns of the individual members.
The other major choice is Corporation abbreviated Inc. Inc. A Corporation can hand out shares so, it can be owned by many many many people.
However, a Corporation basically pays taxes twice. First, it pays taxes on the corporate income and then it pays taxes on all the distributions and salaries that it pays out.
Requirements for company formation
A need to register with the Internal Revenue Service
So, you have two basic choices a Limited Liability Company or a Corporation. You need more to have a properly functioning company.
Once you have registered the company, you need to register it with the Internal Revenue Service.
It’s called a Federal Employer Identification Number. It`s very simple to apply for this Number, which is the tax ID for the business.
Just go to the website http://www.irs.gov, gov like Government and you will see the application forms. You can actually apply online and get the number immediately.
A Registered Agent
As already mentioned, you also need a Registered Agent. This is a person who is authorized to receive official mail usually documentation relating to lawsuits or any notices from the individual State, where you registered your company.
You have to have a person who is a resident of the State.
If you don’t have anybody, you can hire a company to do it for you. It’s a Registered Agent Service, there are many Corporation Services Company that provide those services.
And you need an address for your company.
If you don’t have an office set up yet, well, you can sign up for one of those so-called Corporate Presence Programs with an Executive Office Suite.
Must have Corporate Book and Seal
In order to have a properly functioning company, you should also have a so-called Corporate Book and Seal.
The Corporate Book is basically a large binder, where you can keep all corporate documents such as the Federal Employer Identification Number, the State Registration, and any other documents such as Corporate Records, they are generally called Minutes, like the minute – sixty minutes to an hour, Minutes of the company.
You can all keep that in this Corporate Book. Sometimes, documents require a Seal, it’s sort of like a seal, that you put on documents.
You usually receive the Corporate Book and Seal together from one of those Corporate Service Companies that I mentioned.
For visa purposes, it is also very important that you have a Business Plan for your company so, to review it, you have to establish your company.