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Incorporation

Everything you need to know about a forming US company

October 18, 20224 minute read
Everything you need to know about a forming US company
Everything you need to know about a forming US company
Everything you need to know about a forming US company

The idea that you need to be a US citizen with a US Social Security number (Social Security Number) is one that is frequently held concerning launching a US business.

That is untrue. You do not need to have a US Social Security number, to be a US resident (often known as a “green card holder”), or to be a US citizen.

What is an LLC?

Limited liability companies, or LLCs, are a type of business where the owners have some protection from being held personally liable for the debts and liabilities of the firm.

All of the members of an LLC are regarded as “limited” partners. As a result, they are only partially liable for the company’s debts and responsibilities. In terms of its shareholders and creditors, the corporation is regarded as a “general” partner.

One of the most common corporate entity types nowadays is the Limited Liability Company (LLC). It can be more appealing than other business entity types like sole proprietorships, partnerships, and corporations since it offers protection from personal liability for its owners and management.

Should I form an LLC or a C Corp?

A C Corporation is an excellent choice if you are currently raising or will need to raise US venture capital in order to take your company public. To invest venture capital in the United States, investors require a C Corporation.At the end of the day, it is your business and your decision!

New firms desiring flexibility (minimal administrative upkeep, tax flexibility) and liability protection should consider an LLC. LLCs are regarded to be simpler to create and keep up with.

If you need to raise US venture money to go public with your business or are currently doing so, a C Corporation is a great option. In order to invest venture money in the US, investors need a C Corporation.

When all is said and done, it is your choice and business!

What is the best state to form my LLC in?

Almost always, the ideal state in which to register a limited liability company (LLC) is your home state. This is due to the fact that your organization, whether real or virtual, performs the majority of its operations in that state.

There are two exceptions to this rule:

You are not a US citizen (in which case you can choose any state, but we recommend Wyoming or Delaware) or you own a real estate LLC (in which case the “home state rule” does not apply.) Some persons desire anonymity, in which case Delaware, which does not require owners to list their names, and Wyoming, which permits a “nominee” to list their name as the owner, are also good options.

What is your preference between Wyoming and Delaware?

I recommend Delaware only if you want to convert your LLC to a C Corp in the future (to raise venture capital from US investors) or if you actually want the “prestige” of being a Delaware firm. Some customers state that this is important to them, and if it is, you have the option! Otherwise, Wyoming is an excellent choice.

Why? Wyoming is the most popular state for non-resident entrepreneurs who run internet enterprises, e-commerce businesses, or business owners searching for a simple approach to set up and maintain their businesses. It is the most popular state among EasyFiling customers since it offers cheaper yearly fees ($60 vs $300 in Delaware) and a low filing fee ($100), and it was the first state to allow the formation of an LLC.

Don’t dismiss Wyoming’s reputation; it boasts a friendly business climate and has been dubbed “The Switzerland of the Rocky Mountains.”

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