As much as we do not like to admit, our sense of self-accomplishment and happiness are dictated by our balance account. Of course, not everything can be bought with money. However, a lot of things in our lives do depend on our financial capabilities. For the purpose of making money, some of us have decided to live the corporate life and climb the corporate ladder. Others may try to put their entrepreneurial urges to good use. So, if you’ve decided to make it on your own, here is what you must know when starting a business in the USA.
Do you have to be a US citizen to start a business in the US?
Countless individuals move to the United States in hopes of living the American dream. One way to make this dream a reality is by opening a successful business that can potentially bring in a boatload of money. Naturally, most immigrants that move to the United States aren’t US citizens. However, the good news for them is that they are also eligible to start their own business. Also, a green card is not a must when starting a business. Thus, if you have a great business idea and you think the US has the right market for it – start packing. Calculate your moving budget and start planning your move.
Choose a business type that best suits you
Choosing the correct business type might be the most important decision that you make. Your small business success, as well as large business success, depends on this decision. Type of your business dictates everything that your company must follow, from business operations to taxation rules. Nevertheless, if you do not feel confident in your choice, be smart and ask for help. There are many business consultants and legal representatives that will be able to help you. Before you make your choice, here are the type of business that you need to be familiar with.
LLC (limited liability company)
This is the most common choice of business type when starting a business in the US. To clarify, this type of business protects your personal assets and belongings from any debt or legal repercussions that your business might endure. Hence, if your business tanks, your car, home, bank accounts, and all other personal belongings are protected from the business crossfire. Also, taxes are being covered through your personal earnings. Henceforth, your taxes will be low, and you do not need to hire an accountant to separately handle your company account. On Instagram, you can find many businesses being marketed and most of them are LLC.
This option is not recommended, but you should be familiar with its pros and cons. This option is most suitable for companies that are meant to be divided into shares. Likewise, this is a good choice if your start-up business is going to be funded by different investors.
The biggest problem with this type of business is double taxation. After all, taxes are the key to every company’s financial health. When the corporation produces income, normally they get taxed. However, that is not where the taxation process ends. Once the corporation issues dividends, the shareholder also pays taxes on the funds that they receive.
This type of business is only applicable to US citizens. Unlike with C-Corporation, this type of business doesn’t require double taxes to be paid. When owning an S-Corporation you are allowed to give yourself a “rational salary”. This way you will have the opportunity to keep a lot of money from your business. As opposed to having it distributed towards different government agencies.
Which state is most suitable for starting a business?
The answer to this question depends on a few different factors. First, if you are a US resident, your company needs to be located in the same state where you will drive it from. Yet, if you are not a US resident, your best bet would be to start your business in Wyoming. Since Wyoming the most business-friendly state, this one is a no brainer. In case you plan on relocating for business purposes or any other purposes, contact USA Moving Reviews. During your move, a lot can go wrong. If it’s within your budget, it is best to hire professionals to handle your relocation.
Registering your LLC or corporation
Finally, you’ve decided which type of business you will have. Good for you! This is a big step in the process of starting a business in the USA. Consequently, it is time to get that business registered. Registering your business is a detailed process that entails a lot of rules, regulations, and administration. So, if you are doing this for the first time it would be best to hire professionals to handle the registration process for you. If nothing else, you should at least have somebody to advise you.
No EIN, no business
Every legitimate business within the United States must have an Employer Identification Number. In other words, every business must have its own and unique Tax ID number. EIN is like a social security number, but instead of being linked to a person it is linked to a specific business.
When starting a business, you will need EIN in the following instances:
- When opening your business
- Throughout employee recruiting
- While opening a business-related bank account
- During the registration for business permits and licenses
I would gladly say that this is the end, but in this instance, it wouldn’t be right. We just scratched the surface when it comes to starting a business. This is just the beginning, so buckle up for this bumpy ride. You must still open a business account, get business insurance, find a legal representative, get familiar with your tax responsibilities and many more things. As you can see, there is a lot to be done. So, be prepared to be patient and persistent. When things get rough, remember – if this were an easy process, everybody would do it. Thus, be ambitious, hard-working and persistent. If you do, it is very likely that your business success is right around the corner.