What Type of Business Should You form: Corporation or LLC?
International owners (also known as shareholders for corporations or "Members" for LLC's) can form a corporation or an LLC. There is no limit on the number of owners for a corporation or LLC in America. That includes owners from other countries or owners that may be other corporations. However, countries outside of America may have laws on which type of American company may function in that country.
What State Should You Form Your Corporation or LLC?
Delaware is a state that gets a lot of attention due to how corporation friendly it is and many choose to form there. Over a million businesses—more than 50 percent of publicly traded companies in the U.S., more than 60 percent of Fortune 500 companies, and more than 80 percent of recent U.S. based Initial Public Offerings (IPOs) —are incorporated in Delaware. Companies such as Facebook, Google, and Disney, incorporate in Delaware.
The Requirements to Form an LLC or corporation in America
After deciding what type of company you'd like to form and in which state you will form in, there are a few more basic requirements we will need to form your company.
A Company Name
We will make sure that the name is available before going forward. If it is not available you will be contacted for additional name options and we will continue to search till we find one that is available.
Provide a Registered Agent
A Registered Agent is a responsible party that must have a physical address in the state of the formation. They must be available during business hours and will accept and sign for official legal and state documents for the company. For $99 we offer registered agent services. For more information on how we can offer you peace of mind when beginning your new journey please visit us at https://www.form4free.com/registered-agent.
FEIN (Federal Employer Identification Number)
FEIN also known as an “EIN” or “Tax ID Number” is a number issued by the United States Internal Revenue Service (IRS) that is used to identify your company for banking and tax purposes. Once your company is filed with the state, we help you obtain this number from the IRS. The FEIN will be needed, for example, to open an American bank account (and perhaps, one in your home country, please check with your local bank to see if they require this number to open an account).
If You Do Not Have a Social Security Number (SSN)
If you or another owner of your company do not currently have an SSN or an ITIN (Individual Taxpayer Identification Number) and order our FEIN service, we will complete the FEIN Application and obtain the company’s FEIN for you from the IRS via FAX and can take an additional 2-4 weeks depending on the IRS. This option will require that you obtain an ITIN before April 15th of the next year after your company is formed. We cannot assist with obtainment of an ITIN, but a list of “Acceptance Agents” that can assist is available on this IRS page.
After Forming an American Corporation or LLC
After formation is complete there are some other tasks you may want to do depending on the purpose of your company and the state requirements.
Physical Address or Virtual Office
To receive client mail, business mail and so forth at an American address or if every bank you contact requires you to have a separate physical American address, you will need to arrange for a mail forwarding or virtual office service. Many services like that exist in America including Delaware.
Open an American Bank Account
If you want to accept American payments, open a US merchant account, or open a physical branch office in America (or for any other purpose), then you’ll need to open an American bank account. This has become significantly more difficult in recent years due to various American anti-terrorism laws, but there are still several options (depending on your home country) that may make this process easier. It is important to realize it is going to take a bit of research and is highly dependent on variables which are ultimately out of our (and your) control. There are a couple tips that will help you in regards to American banking.
Tip #1: Find a Bank That has a Branch in Your Home Country
If you choose a bank that has both a presence in your home country many times you can just walk into the local branch to open the account. Some of these banks include Chase, Citibank, Wells Fargo and Bank of America.
Tip #2: Form Your company in Delaware
Major international banks operate in Delaware and are very experienced with international clients due to high volume of international clients and corporate banking in general. Most banks require you have some type of physical address in America that is not your Registered Agent Address. Your Registered Agent address is not your company's address.
Get an American Phone Number
Options for an American phone number include toll free 800, 877 numbers or a local number where you can choose the area code (Example: 302 for Delaware). These number providers will have many online features like voicemail and faxes delivered via email. Prices are usually around $9.95 a month.
Build a Website and Logo
Almost every business will want at least a basic website. It adds credibility and is now required by many merchant account providers and American vendors on applications. The good news is domain names are cheap and websites can be built in hours instead of months with new website templates. At around $15/month.
Open an American Merchant Account to Accept Credit Cards
A merchant account is a relationship with a bank that allows your business to accept credit cards like Discover, Visa, American Express and Master card. This also includes electronic checks. You will be able to accept payments via credit card and the bank debits the funds from the customer while depositing them into your bank account. This adds to the necessity of opening a bank account in America.
Maintaining Your American Corporation or LLC
File an Annual Report
The Annual Report is a document that updates the state on the owners, addresses and Registered Agent for your corporation or LLC. An annual report can be filed in any state. We, as your Registered Agent, will receive and forward the required report to you before it is due.
Maintain a Registered Agent
Form4Free fee is only $99/Year. Failing to name a registered agent can lead to fines or even company revocation. You could be barred from pursuing recourse in the state courts or prevented from entering into legal contracts. Reinstatement proceedings can be expensive, time consuming, and subject to additional penalties and sanctions.
Meet Your Home Country Requirements
Consult local law to determine obligations in regards to filings, taxes or other information.
Pay American Taxes
Depending on your country and other factors your company or the owners may have to pay taxes on American based income. Some countries have tax treaties with America and are taxed at a lower rate or don't pay them at all.
Form4Free can help
Form4Free offers basic American company formation for free. Form4Free also provide an array of premium LLCs and premium corporations (INCs) services to their customers. International customers pay the same price U.S. based customers pay, unlike some companies that charge a very expensive fee to international customers.