Small business in the USA
The U.S. Small Business Act becomes his enterprise:
- Who employs no more than 500 people;
- Assets that do not exceed $5 million;
- Annual profit, which does not exceed 2 million dollars.
The authorities educate citizens who are engaged in private business and increase quite loyal conditions for doing their business. There are rumors on the net about inadequate tax increases or excessive additional payments, but this is not entirely true. The real level of taxes is only slightly higher than in some countries. At the same time, the entire tax system is absolutely transparent and understandable for a novice businessman. For non-residents, the conditions for starting a business are exactly the same as for US citizens.
Also in running a small business remember to keep all tax returns for different periods. Tax receipts and declarations must be kept for 3 years or more. So, for example, you must save 2021, 2020, 2019 tax return that you received.
We offer you a step-by-step guide to starting a small business in the USA.
- Choosing a business organization
There are 4 main forms of legal business organization in the USA. Each of them has its pros and cons, so before registering, you need to decide what suits your expectations and capabilities.
- Individual entrepreneur (Sole proprietorship). This type of business is the simplest and easiest in terms of legal formalities. Various paper documents will have to be filled out much less than in other types.
SP is ideal for the service industry. It is most often chosen by lawyers, accountants, private doctors, hairdressers, manicurists, and other specialties in the service sector.
But there is also a serious minus – unlimited financial responsibility. This means that fines and judicial compensation can also affect the personal property of the entrepreneur. And banks are very reluctant to give individual entrepreneurs loans for business development.
- Partnership – collective business management. It is divided into 2 main subspecies: general and limited liability. A general partnership is very similar to an SP – all of its members are fully financially responsible. And in a limited liability partnership, participants risk only their own contribution to the enterprise – fines and other payments do not apply to personal property.
The partnership is ideal for teams of equal professionals – lawyers, auditors, CEOs, programmers, and more.
- Corporation – a universal type of business that is suitable for almost any business. But it is the most bureaucratic – there is just a huge amount of official papers and documents that need to be filled out and maintained, so it is impossible to figure it out without an experienced consultant.
At the same time, American investors prefer to invest in corporations. Because it is easier to keep track of the use of funds in them.
- A limited liability company is the most common type of small business. It combines most of the benefits of a corporation and a partnership. There is less paperwork here than in a corporation. We strongly advise entrepreneurs who open a small business in the United States to choose this particular type of legal organization.
Of the minuses, there are only different conditions for doing business in different states, so you just need to study the legislation of the state in which the company is registered to avoid further misunderstandings.
- Name check
US law is very strict about plagiarism. Including company names. Therefore, before registering, be sure to check if there is a trademark check in your state with the same name or logo.
There are many services for checking the uniqueness of the name that you can use.
- Applying to open your own business
You can register a company online, for this you do not need a personal presence. In the questionnaire, you must specify the name of the company, information about the founders, and the legal address of the enterprise.
The cost of a cell is about $100 per year. The service is available on many sites, so finding a cell is not difficult. For the registration procedure itself on the website of the Secretary of State, you need to pay a fee. In different states, its sizes differ: from 80 to 130 dollars.
Registering a company in standard mode takes 25 business days. But on many sites, there is an urgent registration service for an additional fee. In this case, the process will take from 1 to 10 days, if all documents are executed correctly.
- Registration with the tax service
To be able to pay taxes and legally conduct business, you need to register a tax identification number. Here you will find a small disappointment. While US citizens can complete the online form, non-residents are required to send printed documents by mail. They are considered much longer than online applications, so the case may drag on for some time.
But there is a little trick. You can use the services of an intermediary in the United States. Authorized representatives are eligible to apply online, so the waiting time can be shortened.
- Opening your bank account
Most enterprises and companies prefer non-cash payments, so a bank account is essential for a full-fledged business. If the previous stages could be solved remotely, without coming to the USA, then this will not work here. After all, a personal presence is required to open a company account.
Some banks can open an account remotely, but we do not recommend using it. Too much hassle. At the same time, you need to wait for a decision for at least 28 working days, and a refusal can be justified by absolutely any reason – even the most ridiculous. If you open an account personally, the decision is made within a few hours.
- Obtaining licenses and permits
The last stage before a full-fledged launch of a business in the USA is obtaining permits for doing business. Even being a barber in many states requires a license. Serious fines are imposed for doing business or working without such a document.
To find out which licenses and permits you need, you need to specify the state in which you intend to do business and the nature of the business. For example, a makeup artist or a dentist. The system will give you a complete list of the documents you will need, as well as the addresses of all organizations where you can get them.
Relevant Sources:
https://en.wikipedia.org/wiki/Small_business
https://www.forbes.com/small-business/?sh=48894a576d24
