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USA Company Registration

Updated:2018-3-8 17:54:59    Source:www.tannet-group.comViews:1443

USA company registration is one kind of Tannet's overseas business incorporation service. The United States of America (USA) is a federal constitutional republic made up of 50 states (48 continental states, plus Alaska and Hawaii the two newest states) and one federal district - Washington, D.C., the capital district. The country is situated in the central southern part of North America almost entirely in the western hemisphere. The following is a brief overview of business setup in USA.

Types of Company
1. Sole Proprietor.
Sole Proprietor is one of the business entities in US in which a person opens a business by himself without establishing company or having any agreement with other partners. No forms or filing is required to set up a sole proprietor and the tax liability is the sole responsibility of the owner on an individual basis. Any debt or other liability is totally the responsibility of the proprietor and to the extent of all his personal and business assets.

2. General Partnership.
General Partnership is another types of business entity which formed by two or more person and work together in managing a business or trade. A verbal agreement is enough to form a general partnership but a written agreement is encouraged. Same as sole proprietors, there are no filing or registration requirements. Each partner is taxed on his share of the profits as distributed by the partnership and treated as personal income.

The downside to this business entity is same as sole proprietors, which is unlimited liability. It means that partnership debt and other liabilities are the responsibility of the partners and extend to their personal assets.

3. Limited Partnership.
Limited Partnership is similar to General Partnership. However, limited partners are not liable for partnership debt, their risk is only at the money the contributed into the business. In a limited partnership, there must be first a general partners who has total management responsibility and the limited partner must not get involved in management. If not, there risk protection will be lost.

The Limited Partnership is required to file a document with the Secretary-of-State and the partnership is governed by a Limited partnership Agreement. Taxation is on a personal income basis (flow-through taxation) and the partnership is limited to 35 members.

4. Corporation.
A corporation is a business entity which is limited by shares and therefore it acted as a protection to its shareholders. However, the corporation will need to pay taxes based on its earnings and the owners of the corporation will also need to pay their personal taxes according to the distributed profits after tax/dividends. It then make up to the double taxation entity.

To form a corporation, filing Articles of incorporation with the Secretary-of-State is required and the control of the corporation is the responsibility of the Board of Directors, scrupulous records and accounts must be kept.

The subchapter "S" Corporation is a variation of the "C" Corporation and under a different IRS Tax Code. The "S" Corporation is able to enjoy a certain benefits which is allowed the flow-through taxation treatment similar to that of a partnership and sole proprietorship. Double taxation is avoided by its owners/shareholders. However, there is some limitations for "S" Corporation:

1. Ownership is limited to 75 stockholders.
2. Owners cannot be corporations, partnerships, pension plans, charitable organizations, certain trust.
3. Non-resident aliens cannot be shareholders.
4. To maintain subchapter "S" Corporation status and therefore flow-through taxation status, there is a requirement for strict compliance with stringent rules.

5. Limited Liability Company (LLC).
Limited Liability Company is a hybrid with combine some of the characteristics of other business forms. For example:
1. It is a separate legal entity like a corporation
2. It does not have shareholders, but rather it has members.
3. Its members are protected with Limited Liability. Their personal liability is limited to the amount invested in the LLC like limited partnership.
4. For USA incorporation the members can be physical persons or entities, including corporations, partnerships, trusts etc.
5. Non-residents can be a member of the LLC. ("Offshore LLC's")
6. It is taxed like a partnership which has the benefit of flow-through taxation.
7. Can be formed with any amount of members.
8. An LLC does not pay taxes; its resident members are tax liable as personal income similar to a partnership. Non-resident members are liable for taxes on income derived from the US.
9. Foreign members are not liable to tax and don't have to file tax forms if the income derived is not from the United States.
10. The only document required to register your company, (company formation), with the local Secretary-of-State is the Articles of Organization.
11. An LLC has a limited life span.

Contact Us
If you have further enquire, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website, or calling  Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512, or emailing to

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