How to Register a Company in USA From India
Why choose USA to start a Company From India?
Delaware has earned a global reputation as the greatest and most business-friendly state in which to incorporate. More than 65 percent of all Fortune 500 businesses and more than half of all publicly listed companies in the United States are established in Delaware, and more startups are incorporating in Delaware on a daily basis.
Delaware corporations also benefit from unmatched tax breaks. There is no state income tax on Delaware corporations that conduct business outside of Delaware; no inheritance tax on stock held by non-Delaware residents; no state sales tax on intangible personal property.
Forms of business registration in US Delaware
Limited Liability Companies (LLC)
The LLC gives all of its members limited liability. This implies that no member is personally accountable for the company's debts or obligations and only liable to investment. The LLC has surpassed the corporation as the most common business entity in Delaware.
Series Limited Liability Companies
Series LLCs are most typically utilised to hold distinct assets (such as real estate or precious material assets), to provide for separate single-investment pooled vehicles (especially through online crowdfunding portals), and in certain private funds.
Public Benefit LLC
The public benefit LLC is a newer company structure. It operates and is organised similarly to an LLC, but its Certificate of Formation contains a statement of a specified beneficial purpose that it plans to pursue in addition to its for-profit commercial activity.
Non-Stock Company
The non-stock corporation form is intended to fulfil the Internal Revenue Code's criteria for non-profit status, as well as to expedite an application for tax-exempt, non-profit status after the company's establishment. Delaware non-stock company does not issue capital stock, it has no stockholders. Though, a non-stock corporation is typically administered by its board of directors. The formation of a non-stock corporation does not automatically confer non-profit or tax-exempt status.
General Corporation
C-Corporation
A C-Corporation refers to the tax status of a general corporation, and is not a separate type of corporation. A C-Corporation is taxed at corporate tax rates, and shareholders are taxed on the corporation's distributions. This is commonly referred to as "double taxation," despite the fact that it is the normal rule for businesses and is not as aggressively avoided as the term implies. General companies are taxed like C-Corporations by default.
S-Corporation
An S-Corporation is just a general corporation that has opted to get pass-through classification under Subchapter S of Chapter 1 of the Internal Revenue Code. S Corporation avoids the "double taxation" that occurs with a C-Corp, which means a tax on the corporation's income at corporate rates and a subsequent tax on distributions made by the corporation to shareholders. In order for the corporation to elect S-Corporation status, the following conditions must be met:
(1) all of the shareholders are natural persons and not entities;
(2) all of the shareholders are US citizens or US resident aliens;
(3) each shareholder must consent to the corporation electing S-Corporation status;
(4) the corporation must have fewer than 100 shareholders; and
(5) the corporation must issue only one class of stock with all shareholders having identifiability.
Public Benefit Corporation
The public benefit corporation is a newer business structure. It works and is structured like a corporation, and it can engage in any form of business or activity that a typical Delaware company is entitled to engage in. However, it contains a statement of a particular public benefit that it plans to seek in addition to its for-profit economic activity in its Certificate of Incorporation.
Registered Address
Although Delaware corporations and LLCs are not needed to have a physical presence in the state, you will need to hire a Delaware Registered Agent, as all Delaware firms must have a Registered Agent.
A Delaware Registered Agent serves as a link between your business and the Delaware Secretary of State.
Limited Partnership
A limited partnership (or "LP") gives limited liability to its limited partners but must be managed by a general partner (who can be a person or an organisation) who has unlimited personal liability for the limited partnership's debts and obligations. A limited partner who engages in management is considered as a general partner with unlimited personal accountability for the partnership's debts and obligations. Limited partnership interests are issued by a limited partnership and act similarly to LLC membership interests. The capital account of a limited partner determines the value of a limited partnership stake. A creditor cannot foreclose on the stake of a limited partner. A limited partnership is treated as a pass-through entity, which means that the partnership itself is not taxed, but the members must include their distributive share of gain and loss on their tax returns, even though the sums were not given to them.
Taxation
The Delaware state sales tax rate is currently 8.70%. Delaware does impose a gross receipts tax on the seller of goods (tangible or otherwise) or provider of services in the state. Though, Delaware does not have any state or local sales taxes.
Basis | LLC | Corporation |
|---|---|---|
Control | LLCs may be controlled by all, some, or none of their members. | Control of a corporation’s business and affairs is vested by statute in a board of directors. |
Sale of Interest | There are statutory default rules that require the other members to approve the sale of the remaining interests. | A corporation’s shareholders may freely sell or transfer their shares of stock. |
ByLaws | In an LLC, the operating agreement is the most important document. | Bylaws may be thought of as a corporation’s rules and regulations. |
Dividends | Members have to approve the issuance of dividends, unless their operating agreement denies them the right. | The shareholders do not have a say in whether dividends will be paid. |
FAQs
Qu. Do one has to be resident of Delaware to incorporate?
Ans. No. Delaware law requires every corporation to have and maintain a Registered Agent.
Qu. What is the registered office requirement for C Corporation?
Ans.There is no registered office requirement in case of C Corporation.
Qu. Minimum Capital requirement in C Corporation in Delaware?
Ans.There is no minimum capital requirement in Delaware.
Qu. Can an Indian register a company in the USA?
Ans. Yes, an Indian citizen or resident can register a company in the USA. The process involves fulfilling certain legal requirements set by the state where you plan to incorporate, such as appointing a registered agent and providing necessary documentation. While being physically present in the USA is not a requirement for registration, it's advisable to seek guidance from legal professionals familiar with both Indian and US business laws to ensure compliance.
Qu. How can I set up a US company from India?
Ans. Setting up a US company from India involves several steps:
- Choose a Business Structure: Decide on the type of entity you want to form, such as a corporation, limited liability company (LLC), or partnership.
- Select a State: Choose the state where you want to incorporate based on factors like tax laws, regulatory environment, and business needs.
- Name Your Company: Ensure your chosen company name is available and complies with US naming conventions.
- Register Your Company: Prepare and file the necessary paperwork with the chosen state's Secretary of State office. You may need to appoint a registered agent with a physical address in the state.
- Obtain EIN: Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes.
- Fulfill Other Requirements: Depending on your business activities, you may need to obtain licenses, permits, or meet specific regulatory requirements.
- Seek Legal and Tax Advice: Consult legal and tax professionals familiar with both Indian and US laws to ensure compliance and mitigate risks.
