How to Register a Company in USA. What You Need to Know

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Written By Oluwaseun Ayo

 

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In this post, we will explicitly examine how to register a company in USA.

The United States of America is worldwide known as a great business hub and registering your company with the authorities in USA is a smart move.  

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So, let’s journey through all you need to know as we begin with the background information.  

Overview of How to Register a Company in USA

Anyone can register a company in USA. Whether you’re a citizen, just a resident or non-resident living in another country.

That is, the registration authority will not require a visa from you before registering your business in the USA.

However, note that before your company registration can be completed, you must input a USA physical address for your company.

For residents, your business address could be your home address. It isn’t compulsory that it must be a separate location different from your home. All that is important is that you have a traceable address for transaction invoices, sending correspondence, declarations and other forms of notifications.

But if you are non-resident, don’t panic. Your inability to have a physical address won’t stop you.

All you need to do is just get an agent in the USA.

Types of Company Registration in USA

As a business owner, one of the most important checks before registering your company is knowing the type of company that is most suitable for your business needs.

Typically in the United States of America, there are two types of company registration.

Irrespective of the state you wish to situate and register your company, you only have these two options to choose from and they include:

  1. Limited Liability Company
  2. Corporation

Right now, let’s take a deep dive into each of them.

1. Limited Liability Company (LLC)

This is the most popular type of company. Not only that, it is also flexible in that a Limited Liability Company combines the characteristics of both partnerships and corporations.

Limited Liability Companies (LLCs) enjoy the flow-through tax if they choose not to be regarded as a C-Corporation.

Another significant attribute is that LLCs are a separate legal entity on their own. The liability of each owner is limited which means the owners are not personally responsible for the debts of the company.

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The owners of a Limited Liability Company are regarded to as ‘members’ of the company.

2. Corporation

A corporation is a business entity owned by shareholders who have limited liabilities.

That is, in case of any legal issue or indebtedness of the company, the shareholders are protected from losing their personal assets.

In addition, the demise or withdrawal of any shareholder is not enough to put an end to the business. This is unlike sole proprietorships or partnerships where the death of an owner leads to the closure of the business.

The day-to-day operations of a corporation are taken care of by the directors of the company.

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The three types of corporation are:

  • C Corporation: here, the business’s profit is taxed and so is the shareholders’ individual profit. The business profit is taxed because such business is a separate entity.
  • S Corporation: unlike C Corporation, a business registered as an S Corporation does not need to pay tax twice as they also enjoy flow-through taxation. Please note that this type is not available to non-US residents.
  • Non-Profit Corporation: corporations under this category are usually exempted from paying tax. They are often established for charitable deeds and their income are expected to wholly drive their vision.

How to Register a Company in USA: Requirements

Before you start your registration process, ensure you have the following ready:

  1. Certificate of Incorporation
  2. Articles of Formation
  3. Organizational Minutes and Bylaws
  4. Operating Agreement
  5. Share Certificate of each shareholder
  6. Member Certificate for each member
  7. IRS Form SS4 – Application for Employer Identification Number
  8. Passport copies of all the officeholders.
  9. Pan Card (in case of a Indian national) of all the officeholders
  10. Valid means of identification like Driving License (OR any other registered photo ID card) of all the officeholders.
  11. Utility Bills such as municipal tax receipt, electricity or water bills.
  12. Signatures of all the desired officeholders.
  13. Trade name for your company.

Procedure for Registering a Company in USA

Now, let’s get down to the main business.

To register your company in USA, follow the steps below:

1. Choose a Company Name

What’s a company without a name?

Your name separates you from other business entities and it is an important part of your branding.

While deciding on the name to choose, make sure it is unique. That is, you should go for a name no other business currently uses.

Intellectual right infringement is highly prohibited in the US law and this is why you need to diligently search for a unique name for your brand.

2. Select Your Preferred Type of Company Registration

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Already discussed are the different types of business entity you can register as a company.

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To reiterate, you only have the option of registering as a Limited Liability Company (LLC) or a Corporation (C Corporation or S Corporation) noting that S Corporation is not available to non-US residents.

Based on your business needs, decide on what works best for you.

3. Apply for Permits and Licenses

Your company registration process is not complete if you don’t obtain the necessary permits and licenses to do business in a particular state.

Absconding this will attract heavy sanctions on you and your business.

4. Appoint a Registered Agent

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As a non-resident especially, you need an agent who resides in your state of incorporation.

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This person or entity is readily available to attend to your business communications and inquiries.

Your appointed registered agent is available during office work hours. and acts in your stead to handle business dealings which includes receiving and signing of documents.

5. Submit the Name of Shareholders and Directors

Shareholders are the owners while the directors are concerned with the operations of the business.

Their details are very crucial to the registration process. Why? The authorities are interested in knowing those who own a business entity and those piloting its affairs so that there will be moderation and accountability.

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So, it is mandatory you submit the details of each of these individuals.

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6. Pay the Required Fee

Company registration comes with payment of a particular amount.

The fee varies by state but all states require you to pay a certain amount for your company registration.

7. Obtain an EIN

What is EIN?

It means Employer Identification Number and also called a business tax ID.

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Primarily, you need an EIN for tax purposes but not just for tax, getting it is important for a variety of reasons which include but not limited to:

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  • Obtaining a business loan
  • Registering your company
  • Opening a business bank account

Although, obtaining the unique nine-digit EIN is optional for some businesses, it is important for a corporation of LLC to get an EIN. 

Applying for an EIN is not laborious, it is free and only takes some minutes.

How to Register a Company in USA: Post Registration Obligations

Now, the registration process of your company is over. Kudos for this new feat but that’s not all.

After registration, there are certain compliances you need to take care of. While some states may have additional requirements, the following applies to many states in the USA:

1. Phone Number

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A company must have an officially registered phone number. This helps to aid communication between the business and other stakeholders.

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2. Bank Account

Financial transaction is a crucial part of business dealings.

So opening a business bank account should be a priority for any business entity.

After obtaining the EIN, a foreign owner can also proceed to opening a bank account in the USA. It is also important to open a business account in the owner’s home country with the same back as the one in the USA.

3. Website and Logo

The world is now a global village with the advent of the internet.

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However, only businesses that take advantage of the internet through a web presence (and other online channels) will enjoy the benefits.

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Having a website is a means to reach places beyond the physical environment of the company’s location. Also, it will help your business attract more customers so that you can remain profitable.

Specifically, a logo helps to improve your corporate branding effort and gives your company a unique identity.

4. Physical Address

In the state of incorporation of your company, it is important you have a physical address (or virtual address) where you have all company’s correspondence made.

How to Register a Company in USA Online

To register a company online, you need to access the authorized US government website.

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What exactly do you need to do?

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Follow the steps below:

1. Find the Appropriate Company Registration Website

Visit the website of your state’s Corporation Division. For example, if you are in Texas, you will have to visit the Secretary of State’s website.

2. Choose the Online Business Registration Option

Click the online registration link. For Texas, click SOSDirect to complete your registration. Note: if your state doesn’t have this option, you may have to register your company in person.

3. Provide Necessary Details

First, you will required to open an account on the registration portal if you don’t have one yet.

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After that, complete the application by providing some basic information such as your company name, the headquarter, and the website address.

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You will also need to enter some information about the company’s directors and officers. You will be provided with a Registration Certificate, which you will need to present to the state authorities when you file your company’s incorporation papers.

4. Pay the Required Fee

Your application won’t go through if you don’t pay the stipulated fee. Use your credit card to process your payment.

5. Submit Additional Information

After registering your company online, you will need to gather some additional information.

This information includes the company’s articles of association, which sets out the company’s purpose and structure, and the bylaws, which describe the procedures for corporate governance. You will also need to file an annual report with the state authorities, which will contain information about your company’s activities during the past year.

5. Apply and Obtain an EIN

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Access the Internal Revenue Service (IRS) website to apply and obtain your Employer Identification Number (EIN). As discussed above, having this number has some great benefits but one notable importance is that you will need it for tax purposes.  

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To apply for your EIN, click the “Apply Online Now” link to begin your application.

After that, describe your business, provide the details of the owners and confirm your submission.

You will have your EIN issued once your submission is completed.

Quick note: you can only apply for EIN between the hours of 7:00am and 10:00pm (EST), Monday to Friday.

How much does it cost to register a company?

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Registering a company in USA costs between $600 and $1400. The exact amount you will pay depends on the state you are registering your business.

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Quick note: you can go ahead and register your business yourself or hire a professional. But note that you will incur a service charge if you go the route of hiring a professional.

Conclusion: How to Register a Company in USA

Included in this post on how to register a company in USA is everything you need for a swift and uncomplicated registration process.

Registering a company in the United States is a simple and straightforward process. You can complete this process in person or online, by accessing the authorized USA government website.

So, we examined the requirements, offline and online procedures, and the registration fee.

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Right now, you can go about your registration without any hassle.

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