Company incorporation

Incorporation of Company in USA by Indian

The United States of America has a multicultural population and a sizable English-speaking population. It is generally friendly to foreign firms due to its diversity. The US market is open for business options from all over the world.

It is very simple to establish a US corporation for your business as it has an economy fourteen times larger than India’s and offers one of the most hospitable environments for Indian enterprises to readily thrive. As a result, a non-resident seeking US incorporation must follow all standard US business procedures in the same way as a resident, plus a few additional legalities.

Advantages of registering a US Company from India

The US has well-developed company laws and regulations. Apart from this it also has extremely low corporate income tax rates. These are the primary advantages of incorporating a company in the USA

 

On the other hand the state laws and regulations that each state in the US are highly different from one another. It is wise to incorporate your firm in order to obtain a Foreign Qualification Certificate. This certificate is necessary if your company is heavily reliant on one specific state and its demand for your services. However, Delaware, Wyoming, and Nevada in particular offer the most favorable tax and business legislation, making incorporation commonplace for businesses. Delaware is believed to have no state sales taxes and an extremely low franchise tax rate for small US firms. It doesn’t require any residence to individually pay corporate income tax.

 

Important Information and Required Documents for Company Incorporation in the US

  1. Company name
  2. Type of business
  3. Physical US address for a registered business
  4. (Y/N), Registered agent (in case of having another address it is mandatory to provide under the section)
  5. Business partner’s name (s)
  6. Addresses of partners in business (s)
  7. Possession: (%)

 

  • Documents Needed to Register a US Company
  1. PAN Card
  2. Passport
  3. Aadhaar card
  4. Company incorporation details
  5. Other crucial information

 

  • Company Registration Types from India in the United States

The United States of America has different laws and rules governing the creation and upkeep of businesses. In the USA, there are five different kinds of companies that are typically registered.

 

  1. S Corporations
  2. Corporate entities (C-Corp)
  3. Non-profit organizations
  4. Limited Liability Businesses (LLCs)
  5. Single-person businesses

 

Process of Incorporation of a US Company as a founder in India

You have six steps to follow in order to register a US company from India:

  1. Choose the right entity type for your business. Investors highly prefer C corporations, so most Indian companies choose this type.
  2. Decide which state to register your company in. The vast majority of US tech companies are registered in Delaware. So are 70% of Fortune 1000 companies.
  3. File to incorporate. Capbase makes this easy—you can file your articles of incorporation in ten minutes. The cost of filing is included in Capbase’s annual flat fee.
  4. Get an employer identification number (EIN) from the Internal Revenue Service (IRS). You need an EIN to open a US bank account. Registering with the IRS also sets up your corporation to pay taxes. (Capbase gets an EIN for you.)
  5. Open a US bank account. Once you have an EIN, you can open a US bank account, which is essential for doing business in the US.
  6. Keep your company in good standing by filing reports. In Delaware, you are required to file annual reports every year. The deadline for filing is March 1st. Capbase gives you built-in tools to make sure you’re always compliant with filing requirements.

 

How to move your company’s registration to the US if it’s already registered in India-

If your business is already registered in India, you can effectively move it to the US by doing a “Delaware flip.” This is easiest to do when your company is still young, with only a few shareholders and no outside investors.

 

  • To do a Delaware flip:
  1. Register a Delaware C corporation. You’ll need to name directors and officers and allocate shares. (Capbase makes it easy to register a Delaware corporation from India.)

 

  1. Hire lawyers and accountants in India to get any necessary regulatory approvals for converting your company. You’ll also have to pay off any outstanding debt or warrants for equity.

 

iii.  The shareholders in your Indian corporation agree to give up their equity in exchange for equity in your new Delaware corporation.

 

  1. After these steps, you make your Indian equity a fully owned subsidiary of your new Delaware C corp.

 

Required Cost for the Incorporation Process

For proper company registration only, without opening a US bank account, prepare a budget of $600-$700. With banking your budget needs to be between $2,600 and $3,000. Keep in mind – this is just the initial investment needed to properly set up the company. Your business would need more money for the actual business activity, so make sure to take that into consideration when preparing your startup budget.

 

Conclusion

Forming a US corporation gives you access to the largest startup capital market in the world, letting you raise money from American VCs, angel investors, and syndicates. Before launching your business, you should plan your budget carefully. Many clients make the mistake of hoping that some of the initial and running costs will be offset by the first clients they are counting on acquiring, but you should never build your business on hope – cold blooded calculations prove to be a more reliable tool in business. It is recommended to prepare a setting aside a specific sum that would keep your business running for a year without any income whatsoever.

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