Cost of Company Registration in the USA

The cost of registering a company in the USA depends on the state in which you intend to establish your company as each state has different fees for applicants. Keep in mind that the cost of registering a company in the USA will also vary for each type of company.

• Sole Proprietorship Registration: $50-$400
• Partnership Registration: $50-$400
• Limited Partnership (LP) Registration: $50-$200
• Limited Liability Company (LLC) Registration: $50-$500
• Registered Agent Fee: $50-$300 per year
• Operating Agreement (LLC) or Bylaws (Company): $100-$1,000
• Business Licenses: $50-$100
• Newspaper Advertisement: $200-$2,000

Types of Companies in the USA

If you intend to invest in the USA by registering a company, you should be familiar with the different types of companies in the USA. The types of companies in the USA can be broadly categorized into 4 groups. Below are the types of companies in the USA.

Sole Proprietorship

This type of company is the simplest and most common form of business entity, where the company is owned and managed by one individual. Advantages of a sole proprietorship include easy establishment and operation, minimal regulatory requirements, and complete owner control. However, these types of companies also face disadvantages as the individual must take responsibility for the debts and business obligations.

Limited Liability Company (LLC)

A combination of a corporation (with the ability to limit personal liability) and a partnership (with the ability to assess profits and losses for individuals), this type of organization provides a flexible structure to achieve its goals. LLCs are very flexible and can be used for a wide range of businesses. An LLC operates as a limited liability company but is taxed and managed in a way that is more compatible with partnerships.

Partnership

Partnerships fall into several categories, each with its own specific conditions and in some respects differ from each other. The types of partnerships include:

• General Partnership: A business owned by two or more people who share in the profits, losses, and management responsibilities. A partnership is required to file information returns with the government to report how the partnership’s profits and losses have been and how they have been allocated to the partners. In this type of company in the United States, any particular partner can be held liable for all of the company’s debts, regardless of the allocation of profits and losses or the capital contribution they have made to the partnership.
• Limited Partnership (LP): Includes both general partners (who manage the business and have unlimited liability) and limited partners (who invest but do not participate in management and have limited liability). General partners have unlimited liability, which is more complicated to set up than a partnership.
• Limited Liability Partnership (LLP): Similar to a partnership but provides some liability to all partners. This method of management allows for more flexibility. This type of company can have different requirements depending on the state.

Corporation

As their name suggests, corporations have shareholders and are suitable for high-risk businesses or public enterprises. The cost of registering corporations is higher than other types of companies and they are registered in various forms, including:

• C corp: This type of corporation has an independent legal personality and must pay taxes if it makes a profit. The process of registering documents and operations in this type of corporation is more complicated and requires more detailed reports. In this type of corporation, if one of the shareholders leaves the company, there is no problem due to the independence of the company and the company can continue its activities.
• S corp: In this type of corporation, profits and losses are directly related to the income of the company’s owners and are not subject to tax. In some states in the United States, if this type of corporation makes a lot of profit, it must pay taxes. Some states also consider this type of corporation to be the same as the C corp. This type of corporation also has an independent nature and all its shareholders, which should not exceed 100 people, must be selected from American citizens.
• B corp: These types of corporations have social and environmental goals and their tax rates are similar to C corp corporations. In addition to making personal profits, the goal of these corporations is to create public benefits.

Cooperative (Co-op)

A business owned by a group of individuals and operated for their mutual benefit. Advantages include democratic control by members, profit-sharing among members, and limited liability. However, raising capital can be difficult, and the decision-making process may be complicated due to member voting.

Commercial Company

A commercial or business company is a legal entity established by individuals or organizations under state laws to conduct specific types of commerce or transactions. From a functional perspective, this type of company in the USA includes two types: commercial and trading companies. A commercial company is formed to conduct business transactions in the broadest sense and these transactions are conducted for profit. A trading company is established to advance a specific goal of an organization that is not created to profit.

Types of Company Management Methods in the USA

In the United States, management methods for companies are widely diverse and vary depending on the industry type, company size, and organizational culture. Below are some main types of management methods:

• Traditional Management (Hierarchical Management)

This method includes a hierarchical structure in which decision-making is done top-down. Senior managers hold key responsibilities, and employees follow them. This type of management is common in large and traditional companies.

• Participative Management

In this method, managers try to consider employees’ opinions and suggestions in the decision-making process. This approach increases employee motivation and commitment and helps create a positive working environment.

• Agile Management

This approach is particularly popular in the information technology and startup industries. In this type of management, teams work autonomously and can quickly respond to market changes.

• Data-Driven Management

With the advancement of information technology, many companies use data for decision-making. This approach includes data analysis and the use of data to optimize processes and increase efficiency.

Residency in the USA through Company Registration

If you intend to immigrate to the USA by registering a company, you should know that obtaining residency through company registration in the USA is not easy. One of the main challenges is the difficulty of financial transfers to the USA. Additionally, the type of business plan and which state and type of company you choose also depends on the specific conditions.

Applicants for immigration to the USA by registering a company can receive a temporary residency of 1 year, which can be extended for up to 7 years. During this time, the applicant can pursue other ways to obtain permanent residency.

Conditions for Company Registration in the USA

To obtain residency in the USA through registering a company, the following conditions must be met:

1. The company must be established or incorporated in the United States.
2. The company must have been in business for at least one year in the past three years
3. The company must be a branch of an active U.S. company
4. The applicant must be employed in a managerial or executive position
5. The company must have an active branch in another country that has a commercial relationship with the United States.

If the employer wants to establish a new office in the USA, they must demonstrate the following conditions:

1. The employer must have secured a location for the new office.
2. The employee to be hired as a manager must have at least one year of experience as a manager in the last three years.
3. The applicant must have worked as a manager in the desired office in the United States for at least one year.

Required Documents for Company Registration in the USA

To register a company in the USA, the specific documents required can vary based on the state and type of business entity you choose (such as corporation, LLC, partnership, etc.). However, here are some common documents that you may need to prepare:

Articles of Association (for corporations) or Articles of Organization (for LLCs)
A general charter is a formal document that establishes the existence of a corporation and outlines its structure and primary purpose.
The Articles of Organization serve a similar purpose for LLCs, which is to define the structure, ownership, and management of the corporation.

Operating Agreement (for LLCs)
An operating agreement outlines the ownership and operating procedures of the LLC. While not always required, it is better to have one than not to have one because it helps clarify ownership rights, responsibilities, and operating protocols.

Bylaws
Bylaws are the internal rules and procedures that govern the operation of a corporation. They typically cover topics such as shareholder meetings, director responsibilities, and corporate governance.

Employer Identification Number (EIN)
An EIN, also known as a federal tax identification number, is required for most businesses and is issued by the IRS. It is used for tax purposes and to open a business bank account.

Business Licenses
Depending on your business activities and location, you may need to obtain certain licenses or permits from federal, state, or local authorities.

Initial Report or Information Statement
Many states require an initial report or information statement immediately after the company is formed. This document usually updates the state on basic company information, such as its officers, directors, and address.

Financial Reports
In some cases, especially for larger companies or regulated industries, you may be required to prepare initial financial statements or projections as part of the registration process.

The applicant’s personal documents for registering a company in the USA include:

Steps to Register a Company in the USA

Once you decide what type of company you want to establish in the USA, you must follow the steps outlined below to register a company in the USA:

1. Choose the Type of Company

As mentioned earlier, there are various types of companies, and you must choose one according to your business plan and conditions. Each type of company has its own specific requirements and establishing them varies from state to state. Therefore, the first step is for the applicant to determine their type of company.

2. Choose a Company Name

The name you choose for your company cannot be duplicated in the USA, and if you are establishing a limited liability company, your company name must end with LLC or Limited Liability Company. Be sure to check your chosen name in the US Company Registration System.

3. Register a Registered Agent

A registered agent is a person or entity that must have a physical address for the formation of the company and be available during business hours to receive and sign legal and official government documents for the company. The registered agent has a legal responsibility to accept official government documents and legal papers and send them to you.

4. Federal Employer Identification Number

The Federal Employer Identification Number (FEIN), also known as “EIN” or simply “tax ID number,” is the number issued by the Internal Revenue Service (IRS), which functions as a sort of identification number for companies. The FEIN is required to open a bank account in the USA.

5. Open a Bank Account

To handle finances, investments, and also tax matters, the company must have a bank account in the USA. Therefore, after establishing your identity, you can proceed to open a bank account.

6. Other Actions

If you want to receive business letters, customer letters, etc. at a US address, or if any bank you contact requires you to have a separate physical address in the USA. Additionally, having a mobile number, website, or business logo can help you in the company registration process in the USA.

Types of Company Registration Visas in the USA

There are two US visas that can be used for registering a company.

• Company Registration in the US with an E2 Visa

In the E2 visa, applicants must prove that the business they are starting will be profitable for the US economy. This visa is granted to citizens of countries allied with the United States.

• Company Registration in the US with an EB-5 Visa

The EB-5 visa, which is intended for direct and indirect investments, is also referred to as the employment-based visa. In this type of visa, the applicant who applies for a US Green Card must create approximately 10 jobs for American citizens, meaning at least 10 American citizens must be employed by their company and paid according to wage laws in the United States to successfully obtain permanent residency in the USA.

Obtaining Accompanying Visas through Company Registration in the USA

One of the significant advantages of obtaining residency in the USA through company registration is that the applicant can also obtain residency for their companions through a dependent visa. According to the government definition, a companion refers to the spouse and unmarried children under 22 years of age.

The duration of the companions’ stay in the USA through company registration will match the residency period of the applicant or company manager and will be renewed alongside their stay. The applicant cannot obtain a work permit for their spouse through this residency unless the spouse has already received a work permit in the USA. The applicant’s child can also have the right to study and continue their education in the USA with this method.

Advantages and Disadvantages of Registering a Company in the USA

Registering a company in the USA comes with advantages and disadvantages, which we will address in this section.

Duration of the Company Registration Process in the USA

The company registration process in the USA usually takes between 2 to 5 weeks. This time frame includes preparing the necessary documents (such as bylaws or articles of incorporation), filing with the relevant state agency, and waiting for approval.

Frequently Asked Questions Regarding Company Registration in the USA

• Can one obtain residency in the USA by solely registering a company?

No, registering a company alone does not lead to residency. However, a person who acts as a manager of the company or a new branch in the USA can obtain residency due to conducting managerial and supervisory tasks.

• Can one obtain residency for their companions by registering a company in the USA?

A person who obtains residency in the USA as a company manager will also obtain residency for their spouse and children under 22 years of age.

• Can one obtain a Green Card by company registration in the USA?

This method does not result in obtaining a US Green Card, but the applicant can pursue obtaining a Green Card in future years through other methods.

• What amount of investment is needed for obtaining residency in the USA through company registration?

This investment varies depending on the type of business and company and must be assessed to ensure that the investment aligns with the business.

Residency in the USA through company registration is a fast and effective immigration method. While registering a company alone doesn’t grant residency, applicants who manage and supervise their new US company can receive residency for up to 7 years. This process takes only a few months and requires prior managerial experience. Hiring employees is also key to approval.

Malekpour Consulting Institute offers expert guidance and free consultations to help you navigate this path. Contact us for support and leave your questions or feedback below.