COMPANY INCORPORATION IN USA FROM INDIA 2022
DEFINITION:
Any Indian company in 2022 that is looking to cater to the Indian diaspora in the USA must go ahead and incorporate a company in the USA to partake the several benefits that come with such a corporate registration. Setting up a local company in the USA is easier now than it has ever been. The US government is completely open to foreign businesses setting up operation on their shores to cater to its local multicultural population. Thus, for a non-resident to incorporate a company in the USA, they are required to follow all the regular US business protocols just like any local resident, with just a few additional points. The business laws and regulations in the USA are well formulated with low corporate income tax rates. This makes it extremely favorable for foreign businesses to efficiently thrive and grow in the local market there.
However, each state in the US is governed by its own state laws and regulations which differ vastly from one another. If the nature of an individual’s business is solely dependent on a particular state, it is prudent then to incorporate the business in that state by acquiring a Foreign qualification certificate. States such as Delaware, Wyoming and Nevada provide the lowest business and taxation laws which makes it very beneficial for companies to incorporate their businesses in these states. The state of Delaware doesn’t have sales tax and the franchise tax too is extremely meagre for small US businesses. Non-residents in Delaware don’t have to pay any separate corporate income tax.
BENEFITS OF USA COMPANY REGISTRATION IN 2022:
- Extremely business-friendly laws and regulations
- A business owner’s personal assets such as house or savings are well protected from risks
- The rate of corporate income tax rate is very low across the USA
- A business is incorporated very quickly in the US specially in states such as Delaware, Wyoming and Nevada
- A company in USA doesn’t need to reveal the names of their directors and shareholders
There are two main categories of incorporating a company in the USA such as LLC and C-Corporation for Indian businesses to choose from. An LLC is usually chosen because of its ease towards single taxation and adaptability factor. Budding and new age entrepreneurs
who choose to reach out to venture capitalists and angel investors usually incorporate a C-Corp and not an LLC. The C-corp category is ideal for any company that plans to go public at a later date.
BENEFITS OF LIMITED LIABILITY COMPANY IN 2022:
A Limited Liability Corporation offers extensive growth opportunities, poses very little risk, and has no shareholder limit. An LLC also adds increased credibility for the business that has been incorporated. Also, when a company is incorporated as an LLC, the taxes don’t have to be paid on the trade profits at the legal entity stage. The taxes from the company’s profits are filed on the proprietors’ tax returns.
BENEFITS OF C-CORPORATION:
A C-Corporation is beneficial to foreign businesses mainly because of the multiple tax planning opportunities and the free transferability of shares. A C-Corporation also gives legal protection and there are no limits on the number of shareholders or the number of company owners. In a C-Corporation, the profits are always taxed at the legal entity level. For example, if the profits and the resources of the business are divided among the stakeholders as a bonus, then the stakeholders have to pay their corporate income tax dues on the profits. This creates a double taxation scenario.
DIFFERENCE BETWEEN LLC AND C-CORPORATION
| LLC | C-CORPORATION |
| The owners are the members of the LLC | The owners in a C-Corporation are the shareholders |
| An LLC is perfect for small-scale businesses with limited shareholders | A C-Corporation is ideal for mid-size to substantially sized businesses with many shareholders |
| Members in an LLC can set up the company structure as they choose and manage | In a C-Corporation, the shareholders elect directors to manage the business activities |
| In an LLC, the Members are not held liable | In a C-Corporation, the shareholders are not held liable |
| Basis the limitations of the operating agreement, transferability can be planned | The stock of shares in a C-Corporation can be transferred with ease |
| Outside stakeholders don’t prefer an LLC as it is structured to operate as a partnership mainly | Foreign investors usually prefer a C-corporation as such a company contain stocks, which is distributed among the shareholders |
DOCUMENTS REQUIRED TO INCORPORATE A COMPANY IN USA
- The name of the company
- The scope of business
- The registered physical business address of the company in USA
- The details of the Registered Agent if the individual has another address
- The name of the business partner/partners
- The addresses of business partner/partners
- The ownership ratio in the company
Our team of tax and legal experts at ACE ALLIANCE will address all your queries about Company Incorporation in the USA. Our team will assist you to get the whole process of filing and registration completed and help you with any post-registration formalities and compliances that may crop up.