How to Start a U.S. Business: Forming a Corporation or LLC as a Founder or Startup
Starting a business in the United States—whether through a corporation or limited liability company (LLC)—is a key step for both U.S.-based and international entrepreneurs. The process is relatively straightforward, but choosing the right entity type and staying legally compliant are critical. This guide walks you through the basic steps of how to form a U.S. company, especially helpful for foreign founders and startup teams entering the U.S. market.
1. Decide Between an LLC and a Corporation
LLCs offer flexibility, simple structure, and pass-through taxation. They're ideal for small businesses and solo founders. Corporations, such as C-Corps, offer easier access to external investment, stock options, and a standardized structure with shareholders and a board—making them a preferred choice for startups planning to raise venture capital.
2. Choose a State to Form Your Company
Many companies choose Delaware for its startup-friendly laws and efficient court system. However, if your operations are mainly in another state, incorporating there may be more practical. California, Texas, and New York are also common choices depending on your business location.
3. Select and Reserve a Business Name
Check your preferred name’s availability on the Secretary of State website of your chosen state. The name must be unique and include a proper suffix like “LLC” or “Inc.”
4. Appoint a Registered Agent
A registered agent is a person or service that can receive legal documents on your behalf. This is mandatory in every U.S. state. If you're not based in the U.S., you’ll need to use a commercial registered agent service.
5. File the Formation Documents
For LLCs, you’ll file Articles of Organization. For corporations, you’ll file Articles of Incorporation. These documents are submitted to the Secretary of State with a filing fee (usually between $50–$300).
6. Apply for an EIN (Employer Identification Number)
An EIN is required to open a U.S. business bank account, pay taxes, and hire employees. You can apply online through the IRS website—even as a non-U.S. resident.
7. Draft Internal Legal Agreements
Corporations need bylaws and an initial board meeting. LLCs should have an operating agreement, even if you’re a single-member company. These documents outline ownership, responsibilities, and decision-making authority.
8. Set Up Compliance & Annual Reporting
Most states require you to file annual or biennial reports and maintain a registered agent. Keep your business records organized and up to date.
9. Open a U.S. Business Bank Account
With your formation documents and EIN, you can open a business bank account. Some U.S. banks accept international founders with proper ID and legal paperwork, but this may require an in-person visit.
10. Consider Legal and Tax Advice Early
Each business situation is different—especially for international founders. Consulting a U.S.-licensed attorney early can help you avoid costly mistakes in areas like ownership structure, founder equity, intellectual property, and regulatory compliance.
If you need legal advice on starting a company or forming a startup in the U.S., feel free to contact me at sc@lexsoy.com.
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