How to register a company in the USA: the most comprehensive guide for founders

http://aynuriev.com/how-to-register-company-usa/

by anuriev • 7 years ago

310 33 7 years ago

aynuriev.com

peter_retief• 7 years ago

This is brilliant thanks. Perfect help for someone outside the US

Rudi9719• 7 years ago

Good article, pleasant read, but it's missing https?

idlewords2• 7 years ago

Are you worried that a malicious attacker will MITM the connection and give you inferior advice about starting a company?

nrb• 7 years ago

Or deliver malware, or malicious tracking.

rasebo• 7 years ago

Step 1: do not misspell the word "company".

sf_berk• 7 years ago

Very valuable article! Thanks for it.

jlangenauer• 7 years ago

One thing to be aware of is that registering a company in the US (or anywhere else) does NOT mean that it's not taxable where the founders or management are resident.

For example, in Australia, a foreign company is taxable if i) Australian tax residents control the company’s voting power; or ii) Its “central management and control” is in Australia.

Other jurisdictions have similar laws.

Lordarminius• 7 years ago

One thing to be aware of is that registering a company in the US (or anywhere else) does NOT mean that it's not taxable where the founders or management are resident.

I always wondered about this and how it affects startups. In particular, YC requires that all the companies it funds be registered as US entities. How do these companies manage double taxation ?

rmah• 7 years ago

By filing taxes in every jurisdiction they are legally required to file. Let's use the grandparent post's example: australian founders, company registered in deleware, USA.

They need to file at least the following:

1) US federal corporate income tax

2) Deleware state franchise tax

3) Australian income tax

Probably more. If you want to stay fully legal and compliant, it's just what you have to do.

vageli• 7 years ago

I believe there exist treaties between countries that limit the taxed amounts, similar to how many states will account for income tax on income earned in a place other than your resident state (in the United States, that is).

nabla9• 7 years ago

For individuals tax residence (residence for tax purposes) is usually the physical presence in a jurisdiction.

You have to check tax treaties between the US and the other country to see how it goes. Usually when there is tax treaty, there is no double taxation.

For corporations fixed place of business is important legal concept in OECD couturiers. Significant digital presence is a new emerging concept.

gamblor9562• 7 years ago

Nearly all US tax treaties carve out exceptions for management activities, meaning for example that if a US-incorporated company is managed in Australia, then it is subject to tax in Australia and also in the US, though they would get foreign tax credits in the US to offset the Australian taxes paid.

See the permanent establishment article of...nearly every tax treaty based on the US or OECD model tax treaties.

Kiro• 7 years ago

Can't disagree more with Step 1. Just split it 50/50. Anything else will cause problems further down the road.

jasode2• 7 years ago

Just split it 50/50. Anything else will cause problems further down the road.

It's not that simple. There are plenty of horror stories from founders explaining how the ideals of 50/50 or 33/33/33 equal splits actually caused problems and resentment about unfairness.

Sometimes equal splits will lead to problems.

Sometimes unequal splits will lead to problems.

Therefore, there isn't any one-size-fits-all advice. Each group of founders have to figure out what type of equity split is appropriate for their startup.

terryschiavo22• 7 years ago

I encourage you to share some of these stories. Future entrepreneurs are in this very thread and such experience could greatly help them out.

ta1234567890• 7 years ago

I've personally seen several companies get into deep trouble for being split 50/50. Initial equity split is probably one of the most basic, yet most impactful things for a company. And 50/50 is maybe the worst split of all.

CoreFailure• 7 years ago

This is wonderfully detailed about which exact steps to take. Even if I don't agree with each point it gives me a framework for further research. Thanks for the read!

howard941• 7 years ago

I shuddered reading through this but I attribute that to my trained paranoia from the other non-engineering career. For heaven's sake treat the contents as CoreFailure recommends, a starting point or a framework of topics to raise with a professional versed in the laws in all of the states you'll be doing business in.

immichaelwang• 7 years ago

Can't all of this be done via Stripe Atlas for $500?

divbzero• 7 years ago

This too was my immediate reaction.

Are there situations where Stripe Atlas would not be the best choice?

(Also curious if anyone has experience with Clerky or Gust Launch, which are also mentioned in the article.)

shafyy2• 7 years ago

I use Clerky and can only recommmend it.

nostrademons• 7 years ago

Also used Clerky, it's great. Just fill out a form and give them a credit card and it handles all the paperwork, generates incorporation documents & bylaws, files with the relevant secretary of state, and gives you instructions for what to do afterwards.

I've talked to a couple lawyers since that are familiar with the Clerky paperwork, and they said that legally it's pretty solid as long as you're doing something fairly standard. If you've got complicated ownership structures (converting from an LLC, founders quitting or joining after incorporation, spinning off IP that might not be yours) you probably want to talk to a lawyer, but for the standard situation where a bunch of friends get together, can all agree on ownership percentages, and start a company from a clean slate, Clerky's great.

emptysongglass• 7 years ago

Stripe Atlas won't help you start a company with ethics baked into its mandate so that's worth considering. Clerky will help you to incorporate as a Public Benefit Corporation if that is of interest.

https://www.clerky.com/public-benefit-corporations

ve55• 7 years ago

Yes, Stripe atlas can be a pretty good choice for some of this. With that said, if you don't need anything fancy, and just need a basic LLC for yourself, you can save money (and also choose your state of incorporation if desired) by using some other legal services, which will be slightly cheaper, as all they really do is file the documents for you, which is pretty easy to do on your own as well. But Stripe atlas obviously comes with more than what those services offer in case you need it.

gscott• 7 years ago

Stripe Atlas doesn't accept very many companies. I signed up and was rejected... even though I use Stripe for processing. Somehow Stripe feels they are taking on a greater liability for your company beyond processing.

speeq• 7 years ago

How do foreign founders deal with the visa situation when doing business in the US?

shafyy2• 7 years ago

As long as you are not employed by your company, you don't need a work visa.

If you want to be employed by your company and live in the US, currently the E2 is the best option (for that, you already need ongoing substantial operations in the US).

chmaynard• 7 years ago

Thought experiment: Suppose that every employee in the USA decides to go into business as a sole proprietor. I really mean everyone. Workers contract out their services and file a Schedule C to report income and expenses. Is this possible? Is it desirable? How would it affect the corporation as we know it today?

How to register a company in the USA: the most comprehensive guide for founders

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