Different business types in in the United States

 

1. A Sole Proprietorship

a sole proprietorship is an unincorporated business where there is no legal distinction between the company and the individual who owns it and runs it. The company does not need to file taxes, startup costs are very low, and the owner has complete control over the business. The risk of a sole proprietorship is that because there is no difference between the individual and the company, the individual is personally liable for everything the company does.

 

2. A Partnership

 

Partnerships are single businesses that have two or more owners. Each of these owners or partners contributes to the business either with funding, property, labor, skill, or similar. 

 

Partnerships will require registration. Each state will have slightly different requirements for forming a partnership, but in many, if not most cases, it is a matter of filling out a form and paying a small fee. 

 

3. A LLC(Limited Liability Company)

 

LLCs can differ from one state to another, but generally speaking they are a hybrid business structure, combining the ease of a partnership with the liability protection found in corporations. Owners, frequently called members, pay taxes on the LLCs profits directly and the LLC itself does not file taxes as a separate legal entity. Starting an LLC requires significantly more effort than forming a partnership and a business will probably want to employ a lawyer or at least consult a certified public accountant.

 

4. A Corporation

 

The corporation is a legal entity separate from any “natural” person, meaning that its owners are generally free from personal liability. Each state has particular rules for corporations, but in general you'll need to register a company to be considered a corporation. Once you're registered, corporations will need to pay local, state, and federal taxes that are filed separately from its shareholders. It will need to acquire a particular tax ID number, and abide by all applicable rules, regulations, and laws for its industry.

 

The primary benefit of forming a corporation is that regarding the corporation’s assets or debts, a shareholder’s personal property is protected. 

 

5. An S Corporation

 

An S corporation is formed through a special U.S. Internal Revenue Service (IRS) tax election and is specifically built to avoid the double tax problem mentioned above. The owners of an S Corporation still have limited liability, although not to the same extent as with a regular corporation, but pay taxes just once.

 

6. A Cooperative

 

Cooperatives are businesses created to service and benefit the owners. Put another way, its customers are its owners. One possible example would be a labor union that operated an online uniform store, so that the union members could purchase work clothing at or near wholesale.

 

Registered Address

In the US, you can create your company in any state you choose. If you plan to eventually have an office in the US, it may be cost-effective to form your company in that state. The majority of US non-residents without a strong reason to form in any given jurisdiction choose Delaware or Nevada because of their business-friendly environment and easy compliance requirements.

 

Procedure of Company Incorporation in the United States

 

In America, company incorporation takes place at the state level —not the federal level — for both U.S. citizens and foreign nationals. The process will differ from state to state but is generally comprised of two steps: 1.) applying to register in that specific state and 2.) establishing a registered agent with a valid, physical address in the selected state.

 

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