Does the United States require an office address to open a company?
You don’t need to rent an office to open a company in the United States. You can even use your home address or the address of an agency. Some American companies even started out in garages.
However, in some special cases, it is not a good idea to set the registered address of a US company at home. For example, if you need to apply for an L1 visa (multinational executive visa) after opening a company, setting the address at home will have an impact on the L1 application, because working at home is not conducive to demonstrating the company's investment strength and subsequently meeting the requirements for creating job opportunities. Therefore, leasing a formal commercial office for a certain number of employees can demonstrate the potential for subsequent development and the possibility of sustainable growth of the American company.
In addition, when choosing an office address, the company should consider whether there are any zoning requirements in the area where the company is located, and whether the company's business purposes are restricted or prohibited by zoning. (There will be corresponding articles about the specific matters of L1 application for US companies in the future. If you need it urgently, you can consult a professional lawyer first)
When we usually talk about starting a company, we actually mean American businesses (Business Enterprises). American businesses are divided into two categories based on their organizational form, namely corporations (Corporation) and unincorporated business enterprises (Unincorporated Business Enterprises).
What types of companies are there in the United States?
1. Unincorporated Enterprises:
(Unincorporated Business Enterprises)
(1) Sole Proprietorship
A sole proprietorship is a business established by one person with unlimited liability. It is the simplest form of business.
The sole proprietorship owner enjoys all profits, pays all taxes, indemnifies all losses, and bears all risks. The line between business owners and businesses is blurred. Owners only need to register with the local municipal government and obtain a business license, and there is no need to register with the state government. The owner usually runs the business in his or her own name and can issue invoices to customers in his or her own name.
The procedures for setting up a sole proprietorship are simple and the tax rates are favorable. However, due to its type of enterprise, it is difficult to raise external funds.
(2) Partnership
Partnership, simply put, is when two or more partners start a business together for the purpose of making a profit. In a partnership between two people, if one of them leaves or declares bankruptcy, the partnership will naturally dissolve. A partnership is easy to set up and only requires registration with the local municipal government to obtain a business license. Partnerships may also receive tax benefits.
Partnerships can be further divided into four categories:
General Partnership (GP)
Limited Partnership (LP)
Limited Liability Partnership (LLP)
Limited Liability Limited Partnership (LLLP)
Taking a limited liability partnership (LLP) as an example, in addition to at least one partner who must bear unlimited joint and several liability for the enterprise, other shareholders who do not participate in the actual operation of the enterprise can be limited liability partners. These shareholders only bear limited liability for the enterprise's debts to the extent of their investment.
2. Company
(Corporation)
(1) Joint stock limited company
A joint stock company is initiated and established by one or more shareholders. The entire capital is divided into a number of equal shares. The shareholders bear limited liability to the company for the shares they have subscribed. The shares can generally be publicly issued and freely transferred in the society. Most U.S. state laws do not have any minimum requirements for corporate capital. Joint-stock companies are divided into two categories: C-corporation and S-corporation.
The characteristics of a C-corporation include its continuity and independence, which will not end with the departure of the founder; it is easier to raise funds by listing and selling stocks, and managers must follow the procedures and regulations of a limited liability company.
An S-Corporation has no tax obligations at the corporate level, but there are restrictions on the number of shareholders and types of shares.
(2) Limited Liability Company
A limited liability company combines the advantages of a joint-stock company and a partnership. It avoids double taxation and its members only bear limited liability. It is a more popular form of company in the United States today.
Today, each U.S. state and the District of Columbia has enacted legal entities that provide complete personal liability protection to LLC members.
A limited liability company may have as few as one member, and members may choose to participate in management or not. A limited liability company itself does not have to pay income tax. Each member pays personal income tax on his or her share of the profits, and cost and loss expenses can be reflected in personal tax returns.
The similarities between a limited liability company and a joint stock company are:
1. Voting and allocation according to investment shares;
2. The company has independent legal personality;
3. The company owners shall only bear limited liability for the company’s debts. If a company goes bankrupt due to insolvency, the company will only use its own assets to repay its debts, and the company owners will not bear unlimited joint and several liability.
The difference between a limited liability company and a joint stock company is that:
1. Membership Interest is not public;
2. The transfer of member interests is subject to certain restrictions;
3. There is a certain limit on the number of members.
Some industries, such as banking, trusts, and insurance, prohibit the use of the LLC's limited liability form. In addition, some states (including California) do not allow industries such as architectural design, accounting, and medicine to adopt the LLC form.
This is the end of this issue's introduction to starting a company in the United States. If you want to get more information about starting a company in the United States, please pay attention and we will continue to answer your questions~
