ALL THAT YOU NEED TO INCORPORATE AND

KICKSTART A US C-CORPORATION

How to set up and Kickstart a Company in the USA?

As a non-resident looking to set up a US company, you have even more steps to go

through than a US resident, and more downside if you make a mistake. For example,
there are more income tax issues for non-residents who want to take their income out
of the US. Obtaining an appropriate US work visa and opening a bank account are also
problems. Each of these topics is very complicated. In short, you not only have to create
a workable business model, but further have to make it work within the US tax, legal
and economic framework.

The steps outlined below describe the critical steps that must be addressed before a
business can be launched. Before incorporating a company the following are the
considerations that must be looked into :

1. What type of company is being set up

2. S Corporation, C-Corporation Versus LLC Tax Comparison. (“S” corp status is not
available to non-US residents)
3. In which state the company will be incorporated
4. Where in the US the company will conduct business
5. The type and activity of the business, and its need for licenses, registrations,
permits etc.
6. The staffing needs, which in turn influence the need for physical location and size
of facilities

There are two main types of US business entities: the “business corporation” and
the “limited liability company (LLC).”

Bases Corporation Limited Liability Company (LLC)

Liability Shareholders completely Members are insulated if they are

insulated from liability if not managing the company as well,
the corporation stays in and follow proper procedure to
compliance separate personal and business
matters

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Tax Resident- and
non-resident-owned
corporations pay the same tax
rate, although
foreign-controlled corporations
have to file extra information on
their tax returns
Tax-Treaty Tax treaties were usually
designed with corporations in
mind, so many foreign-owned
US companies are corporations.
Structure Shareholders are the owners.
The shareholders elect the
directors, who govern the
corporation and set policies and
goals, and review the activities
and progress of the company.
Directors appoint the officers,
who run the corporation on a
day to day basis. Only officers
can bind the company and sign
contracts.
Other forms of business organisations are illustrated as below :
Business Structure Ownership
Sole Proprietorship One person
Partnerships Two or more
people
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An LLC can choose to be taxed as a
corporation, but if they are planning
to do this could just form a
corporation instead. If the company
will not be used to do business in
the US, then an LLC is the better
entity type.
The treatment of distributions from
LLCs to foreign owners may be hazy,
so be careful of doing business in
the US using an LLC
Members own the LLC, and control
everything. The Members create an
Operating Agreement, which can be
as long or short as the Members
want, and which sets out all the
rules of the company.
The Members can appoint Managers
to run the company on a day to day
basis. If there are many Members,
appointing Managers is a wise thing
in order to control the structure
(and spending) of the LLC.
Liability Taxes
Unlimited personal Personal tax only
liability
Unlimited personal
liability unless Self-employment tax
structured as a
(except for limited
limited partnership
partners) + Personal
tax
C Corp One or more Owners are not Corporate tax
people personally liable

S Corp Not more than Owners are not Personal tax

100 and all personally liable
must be US
citizens

B Corp One or more Owners are not Corporate tax

people personally liable

Non-profit Corporation One or more Owners are not Exempted for taxes
people personally liable but profits cannot be
distributed

Following is the checklist for incorporating a Company in USA:

Sr. Tasks Done?

No. (Y/N)

Determination stage

1 Where to establish your US Business?

2 It involves looking at demographics, assessing your supply chain, scoping the

competition, staying on budget, understanding state laws and taxes, and
much more.

3 Choose a State of Incorporation of a new Business

4 Arrange visas or other immigration needs if you cannot hire Americans to do

the work for you

Planning Stage

5 Choose the name of the Company

6 If your new company will be a subsidiary of a foreign, parent company, you

can use the same name as the parent or add “USA”.
If your US Company will be independent, then you need to choose a new
name. You can check the name registration Rules Here

7 Decide whether to be a Corporation or a Limited Liability Company

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8 ● Determine the capitalization of the company (how many shares at what
par value, and how much each shareholder will contribute to the
company as their capital contribution.
● Determine who will be the shareholders, officers and directors.
● Determine the roles and responsibilities of the company’s officers and
directors.

Action Stage

9 Provide the necessary documents for Due Diligence.

These include Certificate of Incorporation, or Articles of
Incorporation/Articles of Formation or Articles of Organization,
Organizational Minutes and bylaws optional: shareholder
agreement/Operating Agreement in case of LLC, Share Certificate for each
shareholder/Member Certificate for each Member, IRS Form SS4 –
Application for Employer Identification Number.

10 Form the company by filing the incorporation documents with the state filing
office, and following up with any other required formation procedures for
this state. Every state is different in its requirements

11 Register the company in other states as needed

12 Hold the organizational meeting, appointing the officers and directors,

issuing shares to the shareholders and taking such other actions as
necessary.

13 Obtain the federal Employer Identification Number(EIN)

14 Prepare and file BE-13 Survey with US Bureau of Economic Statistics.

Within 45 days of formation or acquisition, a US company with more than
10% foreign-ownership must file a Form BE-13 with the US Bureau of
Economic Analysis, a division of the US Department of Commerce.

15 Open Bank Account

16 Start business: buy, lease or rent office space, hire employees, market the
products, etc.

Post incorporation requirements

17 Documents required to be provided post incorporation

Action by written consent of the sole incorporator : This is the document

that states the appointment of the board of directors and the adoption of the
bylaws.

Bylaws : State the day-to-day operation of the company, define the rights

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 and capacities of the officers and managers, and contain procedures for
shareholder meetings and voting.

Unanimous written consent - This document lists out the consented actions
(for example - sale of stock to the founders of the company, appointment of
officers to t and authorization of the officers of the company to act on the
company’s behalf) during the company’s formation.

Other documents include Certificate of Incorporation, Certificate of Secretary,

Stock Certificates, Indemnity Agreement, Stock Purchase Agreement,
Stockholder Consent allows stockholders to act without having meetings,
Stockholder Consent of Indemnification Agreement and Technology
Assignment Agreement

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