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Setting up a company in the United States requires a great deal of knowledge. Thus, it is important to learn about the different legal forms of business that exist in the United States.
The determination of the legal form of the company is an important choice for the entrepreneur. In the course of its development, the company can perfectly decide to change its legal form and adapt to the evolution necessary for its activity and its development.
The legal form to be preferred naturally depends on your activity. Thus, entrepreneurs who wish to launch their commercial activity can find many advantages combined within the legal form that is the American LLC. On the other hand, it is advisable to choose the C-Corporation if you have in mind to operate a business with a permanent establishment in the United States.
ExpertLLCUSA proposes to accompany you in your steps in order to define the one which will be the most adapted to your activity.
When starting a business activity, many advantages are combined for entrepreneurs within the legal form of the American LLC.
From a tax perspective, the U.S. LLC is a semi-transparent entity. This means that the partners are directly taxed on all of the profit generated by the business, whether it has been distributed among the partners or set aside in the company's bank accounts. Thus, the LLC is a pass-through entity.
In this situation, you can avoid taxes entirely if this taxation is combined with an advantageous individual taxation, because of a tax residence where the income tax rates are quite low.
Moreover, if we are in the presence of associates who are fiscally resident in France, a taxation under the progressive scale of the income tax (thus from 0 to 45%) will be applied to them, to which it is necessary to add the reduced social deductions on the foreign incomes.
Second, the U.S. LLC offers significant operational advantages for the entrepreneur who wants to take his or her entrepreneurial venture to the next level.
Indeed, it is quite possible to create a single shareholder or a multi-shareholder LLC in the United States, depending on the regulations implemented in a particular state. In addition, partners have limited liability in the U.S., as they are not personally liable for debts and other obligations incurred on behalf of the entity.
The partners of an American LLC can freely dispose of the business's cash flow and distribute the profit. Indeed, within this legal entity, they are not obliged to wait until the end of the fiscal year to distribute the profit. Nevertheless, the legal documents such as the operating agreement and the banking member resolution must be drafted by a professional in order to secure your operations, guarantee your interests and thus take full advantage of all the benefits of the US LLC.
By calling on a specialist you will avoid any error which can lead to inconveniences such as the reclassification of your activity by the IRS.
In the end, the American LLC makes changes easily insofar as it is conceivable to subtract or add a member on a simple prescription of the partners. This modification is done according to the needs of the company, so the partners can make a transfer of shares between them. If you have in mind to establish your business in the US with the presence of employees or stock in the US, you will be able to modify an American LLC into a C-Corporation.
ExpertLLCUSA accompanies you on all these formalities. By calling on our experts, you can benefit from customized services adapted to the situation of your company.
In the case of a business activity managed from a foreign country, i.e. outside the United States, the C-Corporation is not the legal form you should consider. Indeed, contrary to the LLC, there is a great possibility that your activity will be recharacterized by the tax authorities of your country of residence, if a permanent establishment abroad is determined.
Nevertheless, the advantage of the U.S. LLC is that there is no risk of recharacterization, because as a tax-transparent entity, it is not subject to U.S. corporate income tax. Thus, the partners are taxed personally on the totality of the profit made by the company, up to their share of participation.
To develop a business with the presence of a permanent establishment in the United States, the C-Corporation is a legal form to which you must pay attention. You must then have :
- Offices;
- Stocks;
- Employees;
By fulfilling all these aspects, your company will have a "dependant agent" status. On the other hand, it is important to note that it is the absence of a "dependant agent" in the United States that guarantees the non-ETBUS status for a foreign resident shareholder of a US LLC. Consequently, he avoids the US corporate income tax.
Moreover, you should know that your choice can be modified. Indeed, in case of development of your commercial activity with a physical presence in the United States, it is quite possible to change your American LLC into a C-Corporation.
Beyond the simple formal mission of creating your company (whether it is an LLC or a C-Corp), the ExpertLLCUSA team accompanies you in creating your bank account.
The bank account can be online or in a physical bank (such as JP-Morgan Chase, Bank of America, or Wells Fargo).
The know-how of our teams is recognized by our partners.
Don't hesitate to contact us for free by booking a time slot with one of our specialists.
