Starting a Business in America—U.S. Company Formation

The United States continues to be a sought-after destination for establishing and expanding businesses, thanks to its entrepreneur-friendly tax system, streamlined entity incorporation process, advanced business infrastructure, and robust economy. Our in-house company organization partner, LB Innovative Consulting LLC guides clients through the complexities of U.S. entity formation, providing information on the various corporate structures available. Additionally, the company provide business plan drafting services tailored for immigration purposes.

The first critical step in expanding a foreign company into the U.S. is to incorporate the business in one of its fifty states. Each state operates under its own jurisdiction and has unique rules and regulations that must be followed to remain in compliance with U.S. law. Given the complexity of navigating fifty different sets of rules for establishing an American company, it's essential to consult with a company organizer before selecting a state for incorporation. Clients are often misled by online articles suggesting that incorporation in a particular state will lead to favorable tax benefits, only to find themselves burdened with double or even triple taxation.

For international companies aiming to extend their operations into the U.S., it's crucial to consider how company formation interacts with U.S. immigration law. While it may be relatively quick to file articles of organization in a given state, such a step is usually insufficient for securing a U.S. expansion visa.

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What are the Different Types of U.S. Business Entities?

When establishing an office in the United States, companies have a variety of business entities to choose from, each with its own set of complexities, benefits, and drawbacks. The best entity type for your business will depend on various factors, including the number of owners, the type of U.S. visa needed, tax considerations both in the U.S. and abroad, and liability concerns.

The two most prevalent types of U.S. company formations are Corporations (Inc.) and Limited Liability Companies (LLCs).

Corporations (Inc.)

In the United States, a corporation is considered a legal entity with its own "legal personhood." This means that, under U.S. law, a corporation can sue and be sued separately from its shareholders. Each individual state is responsible for establishing the laws governing corporations within its jurisdiction. Shareholders, who own the corporation through shares, have their liability limited to their initial capital investment in the company.
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It's crucial to strategically structure a corporation for U.S. tax purposes to minimize tax liability. Corporations are subject to what's often referred to as "double taxation"—the corporation itself is taxed on its income, and individual shareholders are also taxed on the dividends they receive.

Limited Liability Companies (LLC)

A Limited Liability Company (LLC) is a legal entity in the United States that provides a broad scope of liability protection for its owners, who are known as "Members." Whether an LLC is owned by a single individual or multiple people, no shares are issued, unlike in a corporation. However, members can opt to receive Membership Certificates to represent their ownership stake in the company.
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For U.S. tax purposes, income generated by an LLC is treated as pass-through income by the Internal Revenue Service (IRS). This means that each member is responsible for reporting earnings from the LLC on their individual tax return each year. The LLC itself is not subject to a separate corporate tax. However, under certain circumstances, an LLC may elect to be treated as a corporation for tax considerations.

The Barella Global Advantage

Barella Global has established an in-house collaboration with our partner company, LB Innovative Consulting LLC, to offer comprehensive services for organizing U.S. companies and drafting immigration-compliant business plans. This includes business plans tailored for E-2 and L-1 visa applications. Our unique in-house partnership distinguishes Barella Global from other U.S. law firms. Most company organizers and business plan writers do not take into account a client's specific immigration needs, which we consider crucial.
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Because LB Innovative Consulting LLC operates in-house, all work related to company formation, business plan drafting, and U.S. visa matters can be handled concurrently. This integrated approach significantly streamlines the process and saves our clients valuable time in navigating the complexities of U.S. visa applications.