All you need to know about Registering a Business in the USA

Last Updated at: January 08, 2020
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All you need to know about registering a business in US

If you are a foreign entrepreneur and intend to open up a business in the USA, you need to know how to register a business in the USA. When you register a business name in the USA, it will be registered as a legal entity and your business assets will be legally secured. It will also provide you with much-needed stability at the beginning of your entrepreneurial journey in this country. However, if you have never registered a business in the USA for foreigners before, you may find the process to be a daunting one.

Don’t worry! We are here to make it easier for you! You just need to consider the following points before registering your business in the USA.

Register the name of your business

Deciding on an appropriate name for your business and registering the name are the first major steps towards registering your business in the USA. You need to come up with a ‘catchy’ name so that you can leave a lasting impression on your audience. Also, you should choose a name that is not registered already with the USPTO (the United States Patent and Trademark Office). You can ensure this by checking your local business directory for any reference to your chosen business name. You can also check the availability of your chosen business name with the free online tool available on the USPTO site.

Visit to our blog for know more about how to start a business in the U.S from India

Make your business name ‘Future proof’

After you have checked the availability of your business name with the USPTO, pause a minute to think if it will endure the ‘test of time’ and whether it is in sync with your long-term business goals. Do remember that it will not be convenient for you to change the name of your business after the registration takes place. It will also lead to a lot of confusion for your customers in the future. Therefore, you should think about the ‘staying power’ of your business name before you register it.

register your business in the USA

Choose the type of your business entity

You can register your business entity in any of the two ways- as an LLC (Limited Liability Company) or as a corporation. Registering as an LLC is comparatively less expensive and involves less paperwork. Also, if you register your business as an LLC, you will not be personally liable for any debts accumulated by your business. Your personal assets will remain completely safe in case something wrong happens to your business on a later date.

When you choose to register your business as a corporation, you can register it either as a ‘C’ corporation or as an ‘S’ corporation. Registering as an ‘S’ corporation will allow you to opt for the ‘Pass-through taxation’, which means your business will not be taxed at a business level. You will only pay income tax on the revenue generated by your business; not on the actual business. But, in this case, the government will not allow the non-citizens to hold any shares. On the contrary, ‘C’ corporations are subject to what is termed as the ‘Double Taxation’.  It means you will be taxed on the profits of your business as well as on your personal income.

Choose the state to register in

Please note that in the U.S.A, it’s not necessary to register your business in the state you operate. The tax rates differ from state to state and hence, you may decide to register in a state that has low sales tax rates and can save a lot of money for your business.

Obtain the Federal tax Number for your business

You need to get a Federal Tax Number or Employer Identification Number (EIN) and register your business at the federal level. It is equivalent to the SSN (Social Security Number) for your business. The EIN will also be required when you will file your tax returns to the State or Federal Government in the future.

Know more about the benefits of registering your business in the U.S.

Register your business 

Now that you have completed the prerequisites to register your business in the U.S., you should go ahead and complete the registration process. The processing period may vary from States to state. Also, foreign nationals may need to wait at least 30 days till day receive their EINs. When you need to get a Tax ID and your owners/directors are not U.S. citizens, you must submit your incorporation application to a special IRS unit. These additional formalities may cause delays before you can finally register your business in the U.S.

Documents required to start a business in the US

The process of starting a business in the U.S. is made much simpler these days. One can start his business in the U.S. even if he does not have a valid visa and is not planning to come to the U.S. any time soon. However, you should take care to have a few basic legal documents in place to ensure the success of your business. Documents play a crucial role to protect your business interests throughout your business in the U.S.

To know more about the required documents: click here

Benefits of registering  a business in the US

Registering your business is probably the best way of protecting your personal assets from business actions. When you register your business in the U.S, your company becomes a distinct legal entity and it becomes responsible and accountable for the debts arising out of the business. This means the creditors of your firm can seek payments from the business assets only and not at all from the personal assets belonging to the owners, directors, and shareholders. Therefore, you can conduct your company operations without risking your personal properties such as your home, personal savings, landed properties, and so on.

To know more about the benefits of registering a business in the US: click here

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All you need to know about Registering a Business in the USA

302

If you are a foreign entrepreneur and intend to open up a business in the USA, you need to know how to register a business in the USA. When you register a business name in the USA, it will be registered as a legal entity and your business assets will be legally secured. It will also provide you with much-needed stability at the beginning of your entrepreneurial journey in this country. However, if you have never registered a business in the USA for foreigners before, you may find the process to be a daunting one.

Don’t worry! We are here to make it easier for you! You just need to consider the following points before registering your business in the USA.

Register the name of your business

Deciding on an appropriate name for your business and registering the name are the first major steps towards registering your business in the USA. You need to come up with a ‘catchy’ name so that you can leave a lasting impression on your audience. Also, you should choose a name that is not registered already with the USPTO (the United States Patent and Trademark Office). You can ensure this by checking your local business directory for any reference to your chosen business name. You can also check the availability of your chosen business name with the free online tool available on the USPTO site.

Visit to our blog for know more about how to start a business in the U.S from India

Make your business name ‘Future proof’

After you have checked the availability of your business name with the USPTO, pause a minute to think if it will endure the ‘test of time’ and whether it is in sync with your long-term business goals. Do remember that it will not be convenient for you to change the name of your business after the registration takes place. It will also lead to a lot of confusion for your customers in the future. Therefore, you should think about the ‘staying power’ of your business name before you register it.

register your business in the USA

Choose the type of your business entity

You can register your business entity in any of the two ways- as an LLC (Limited Liability Company) or as a corporation. Registering as an LLC is comparatively less expensive and involves less paperwork. Also, if you register your business as an LLC, you will not be personally liable for any debts accumulated by your business. Your personal assets will remain completely safe in case something wrong happens to your business on a later date.

When you choose to register your business as a corporation, you can register it either as a ‘C’ corporation or as an ‘S’ corporation. Registering as an ‘S’ corporation will allow you to opt for the ‘Pass-through taxation’, which means your business will not be taxed at a business level. You will only pay income tax on the revenue generated by your business; not on the actual business. But, in this case, the government will not allow the non-citizens to hold any shares. On the contrary, ‘C’ corporations are subject to what is termed as the ‘Double Taxation’.  It means you will be taxed on the profits of your business as well as on your personal income.

Choose the state to register in

Please note that in the U.S.A, it’s not necessary to register your business in the state you operate. The tax rates differ from state to state and hence, you may decide to register in a state that has low sales tax rates and can save a lot of money for your business.

Obtain the Federal tax Number for your business

You need to get a Federal Tax Number or Employer Identification Number (EIN) and register your business at the federal level. It is equivalent to the SSN (Social Security Number) for your business. The EIN will also be required when you will file your tax returns to the State or Federal Government in the future.

Know more about the benefits of registering your business in the U.S.

Register your business 

Now that you have completed the prerequisites to register your business in the U.S., you should go ahead and complete the registration process. The processing period may vary from States to state. Also, foreign nationals may need to wait at least 30 days till day receive their EINs. When you need to get a Tax ID and your owners/directors are not U.S. citizens, you must submit your incorporation application to a special IRS unit. These additional formalities may cause delays before you can finally register your business in the U.S.

Documents required to start a business in the US

The process of starting a business in the U.S. is made much simpler these days. One can start his business in the U.S. even if he does not have a valid visa and is not planning to come to the U.S. any time soon. However, you should take care to have a few basic legal documents in place to ensure the success of your business. Documents play a crucial role to protect your business interests throughout your business in the U.S.

To know more about the required documents: click here

Benefits of registering  a business in the US

Registering your business is probably the best way of protecting your personal assets from business actions. When you register your business in the U.S, your company becomes a distinct legal entity and it becomes responsible and accountable for the debts arising out of the business. This means the creditors of your firm can seek payments from the business assets only and not at all from the personal assets belonging to the owners, directors, and shareholders. Therefore, you can conduct your company operations without risking your personal properties such as your home, personal savings, landed properties, and so on.

To know more about the benefits of registering a business in the US: click here

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Senior Executive - Content in Vakilsearch | Former TEDxSKCET Licensee | Content Marketing | Psychology | Engineering (IT) | Google Developers Group (GDG) co-organizer | WTM Ambassador