Forming a US Company Is Simple and Fast

This article is part of our series on entering the US market. In it, we explain the ten most important facts about the expansion of non-US companies into the States. We show you what to watch out for and why the formation process should not put you off. The US market is huge and offers you countless ways to get a piece of it.

There is a lot of conflicting information out there about how long it takes and how hard it is to form a company in the USA. Here we look at the framework and each individual step of the process.

1Your US company in a few simple steps

First, it is important to know that company formation in the USA is a matter for the individual states, not something regulated uniformly at federal level. Whether you choose a corporation (C Corporation or S Corporation), a limited liability company (LLC), a limited partnership or another US legal form, every company is formed under the laws of the US state you choose. To do this, you file the relevant documents with that state. Which state and which legal form you should choose is best discussed with your attorney or tax advisor.

European entrepreneurs who want to do business in the USA usually choose either a US corporation or an LLC. Both have their own advantages, and both offer limited liability if other market participants bring financial claims. In practice, this means creditors' claims are limited to the assets of the US company.

Whether you are forming a corporation or an LLC, you only need to follow a few simple steps.

First, you choose a name for your US company. It must be available in the state in question, which you can usually check in online databases. Make sure the name you choose does not infringe another company's trademark rights.

Next, you prepare and file the formation documents. For a C or S Corporation this is a Certificate of Incorporation; for an LLC it is a Certificate of Formation. Preparing the documents is usually straightforward, and sometimes the application is just one page. The state charges a fee for this, between $100 and $800 depending on the state. In most states, such as Delaware, it can be done within a day, and you can start doing business right away. For the filing, it pays to bring in an experienced attorney or tax expert. Mount Bonnell Advisors has many years of experience forming companies and handles the process quickly and efficiently, so we know exactly what matters in the different US states.

As soon as the documents are filed, your US company exists and the formation process is complete. As mentioned, this can usually be done very quickly. If you are in a real hurry, we offer an express formation option for the fastest possible turnaround.

Once the company is formed, a few more steps follow. For a corporation, bylaws must be drafted and a federal tax identification number applied for. You need this tax ID to open an American bank account. For an LLC, you need an Operating Agreement in addition to the tax number. Further documents can also be drawn up, such as shareholder agreements. If you want to run branches in states other than the state of formation, you may also need, among other things, a local Registered Agent.

2What this means for your US company formation

Everything else is an additional step with nothing to do with the actual formation of your company in the States. The formation itself takes very little time and, with the right partner at your side, is done in no time. So the formation process should not stop you from taking your business into the huge US market. What getting started costs is covered in our article on the costs of entering the US market; and if all you need is a US LLC without a US permanent establishment, our sister site zerotax.llc is the most direct route.