The procedures and requirements for establishing a company in the United States are fairly simple. There is no legal status restriction on the establishment of a company. As long as you submit the correct application form as required, you can register and establish a company in the United States. When setting up a company, you must first choose a suitable form of entity to operate according to the nature of the business, business scope, and development direction. The four types of common entities in the United States are:

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company

Different entity types have different establishment procedures, and the responsibilities that owners have to bear and the types of taxes are also different. Index TF will analyze and select the most suitable company form according to the needs of clients. From choosing a company name, submitting the company's articles of incorporation, making an operating agreement, to obtaining business licenses and permits, we provide one-stop professional services.

Sole proprietorship 

The ownership and management rights of a sole proprietorship belong to a single person. Sole Proprietorship is only required to apply for a business license in the city where it is located and register the business name (DBA: doing business as) in the county where it is located. The advantage is that the company itself has no tax liability, the owner only needs to pay personal income tax, and the relevant legal documents are relatively simple. The disadvantage is that the owner bears unlimited liability, that is, the owner's personal property is also liable for the debts and legal liabilities faced in the operation. This company form is suitable for small companies with low risks and low capital requirements.

Partnership

A partnership company is jointly owned and operated by two or more partners. The partnership needs to apply for a business license in the city where it is located and register the business name in the county where it is located. The company can choose not to register with the state government. The partnership relationship can be established verbally or in writing. The advantages of a partnership company are similar to those of a sole proprietorship. The company has no tax liability and the partners need to pay personal income tax.

The partnership is subdivided into General Partnership and Limited Partnership.

• General partnership company: Partners bear unlimited liability for debts and legal liabilities faced in their operations.

• Limited partnership company: includes two types of partners. This type of form generally includes two types of partners. One is a limited partner, which cannot participate in business management; the other is a general partner, which is responsible for business management which comes unlimited liability and responsibility. Limited partners are only responsible for the part they invested, so they have limited liability.

Corporation

A corporation takes the company’s capital as its shares, and shareholders are liable to the company within the limit of the shares owned by them; the company owner is each shareholder, the company establishes a board of directors, and the members of the board are elected by the shareholders; the board of directors elects and decides on the management of the company. In the United States, limited liability companies are divided into two types: C Corporation and S Corporation.

In addition to the limited liability of shareholders, the advantages of C-share company can be listed and traded for financing, so that the company can raise a large amount of capital in a relatively short period of time for the expansion of production and sales. The disadvantage is that the company needs to pay double taxes, the company has tax obligations for any profit, and the individual shareholders need to pay taxes when they receive the dividend. In addition, C Stock Company also needs to carry out some routine tasks in accordance with the provisions of the state and federal commercial laws, such as regular board meetings and formal voting.

S Corporation is mainly used to avoid double taxation. The company's profits and losses can be paid in the name of individual shareholders. S Corporation has no routine official requirements, and there is no need to hold a general meeting of shareholders and vote. In addition, the limitation of S Corporation is that its shareholders can only be U.S. residents in the sense of U.S. tax law.

Limited Liability Corporation 

Limited Liability Corporation is abbreviated as LLC, which assumes external responsibilities based on the company’s property, and each member assumes responsibilities to the company within the limit of its capital contribution. LLC has the characteristics of a partnership and a corporation. In terms of federal taxation, LLCs can choose to pay only one tax in a manner similar to that of a partnership, or they can choose to pay double taxes like a Corporation. LLC and CORPORATION are interchangeable, but they must apply to the government in accordance with corresponding laws and regulations.