Registering a business in the USA and becoming a boss looks like a distant dream for many. However, one must know that registering a company here is not rocket science if the right steps are followed. Here are some important information and steps that will help you correctly register a business in the States. Use this as your guide and set up your dream business in no time.
Let’s take a look at the benefits of registering a business in the USA.
- It can give you tax rates easier on your pocket
- Give you access to better deductions
- Help you clear any liabilities against business obligations
- Help with much cleaner business requirements.
Business Categories in the USA
Businesses are clubbed under two main categories, especially in the USA.
- Unincorporated businesses – Businesses that are not registered.
- Incorporated businesses – Businesses that are registered.
Unincorporated businesses:
We find a lot of sole proprieterships and general partnerships under unincorporated businesses. Mose of the entrepreneurs who just start their business begin to operate this way as there is no immediate need of a company or business registration. This is very easy to set up. However, such businesses are liable for all their business obligations like debts and legal rulings. The owners of such businesses also need to pat income tax on their earnings which is wy more higher than the corporate tax.
Incorporated businesses:
When a company is registered and is considered an incorporated business, the business owners have their own rights. Here in this case, they will not be liable for any business obligations. It is also easy to get a business loan on a registered business. However, when your business becomes an incorporated one, you will have to pay annual fees. Prepare annual reports and meet other requirments that are ste for all the business firms by the law.
Steps to Register your Business in the USA
When you decide to register your business and plan on expanding further, you need to keep in mind these steps for a seamless process.
Plan on your business structure:
Do some ground work and put up a business structure first. While the major categories are Unincorporated and Corporated businesses, you also need to go one step deeper when it comes to registering your business. There are some structures while doing this.
- Sole proprietership – This is an unregistered business that will make you liable for profits and losses that can occur during the operations.
- General partnership – This is an Unincorporated business owned by a partnership of two or more people who take the profit and losses divided among themselves.
- Limited Partnership – Here, one partner runs the business and is fully liable of the profit and losses during the operations while the other partner only provides financial investment.
- Limited Liability PArtnership – Here, there is a partner who will be concerned with the financial investment and will be liable to lose as much as they have invested.
- LLC – Limited liability company brings a distinct separation between a business and the business owners. LLC becomes a legal entity and has its own right. This is good for small business owners.
- C Corporation – The owner of the business is separated from the business assets and liabilities.
2. Register your business name
Choose a business name that can be registered legally. Check for the naming rules and the requirements that the States have to have a seamless process. Do not choose another entity’s name. It is also advisable to trademark your name. Once your name is trademarked, no one can use it as their business entity. Make sure you do not use a trademarked name for your business as this can lead to a criminal offence.
3. Understand the taxes and other costs
Every state in the United States of America comes with its own tax policies, costing and benefits depending on the businesses that are to be registered. If you are planning to register your business in multiple states, make sure you stay aware of all the rules. A corporate lawyer or a business setup agency can help you get the right information.
4. Register your business and get all lisence
When you register your business, you will first have to get an employer identification number. This number is that is set up to pay taxes and run the operations smoothly.
Submit your official business name and business address to the authorities concerned. Take the help of agencies or service providers that register businesses. Also make sure you are aware of all the local business laws.
5. Set up a bank account
Once you receive your Employer Identification Number, open a bank account in the name of your business. All the laws that are related to registering an LLC, LLP and corporations make a business bank account mandatory. Do some research and choose the best bank that can offer you good benefits and loans as your business grows.
These are the major steps that you need to take while registering a business. It is always good to take the help of a best business consultant to make this process less daunting and more rewarding.