What Are the Requirements for Starting a Business in the United States?

The United States has established itself as one of the most attractive destinations for entrepreneurs from around the world looking to expand their businesses and tap into the vast global market. This trend is especially notable among Latino-owned businesses, which are increasing their number of employees at a much faster rate than businesses with native employers.

Over the past decade, Latino-owned businesses have increased their workforce by 55%, compared to just 8% in traditional companies. This growth reflects the dynamism and resilience of Latino entrepreneurs in the country, significantly contributing to the U.S. economy, with an estimated impact of $2.75 billion.

However, starting a business in the United States requires meeting certain legal and administrative requirements. In this blog, we will explore the essential steps and necessary requirements for establishing a business in the United States and how Prodezk can help you navigate this process efficiently and smoothly.

1. Choosing the Legal Structure

The first step in starting a business in the United States is deciding on the legal structure of your business. The most common options include:

• LLC Disregarded (Sole Proprietorship): The simplest structure, where one person is responsible for the business and its obligations.
• Limited Liability Company (LLC): Offers limited liability protection to its owners, known as "members." It is a popular option for small and medium-sized businesses due to its flexibility.
• Corporation (C-Corp or S-Corp): A legal entity separate from its owners, providing liability protection. C-Corps and S-Corps differ in how taxes are levied and managed.

Each structure has different tax and legal implications, so it's crucial to choose the one that best suits your business needs. We help you select the most appropriate legal structure for your business, taking into account your goals, the size of your company, and other important factors. Additionally, we advise you on the tax and legal implications of each option, ensuring that you make the best decision from the start.

2. Choosing the Company Name

The next step is choosing a name for your company. This name must be unique and not in use by another business entity in the state where you plan to register your company. It is advisable to conduct a business name search through the state’s database to ensure that the desired name is available.

Reserving the Name

Some states allow you to reserve your company name before officially registering it, ensuring that no one else can use it while you complete the other steps in the business creation process.

3. Registering the Company

Once you have chosen the legal structure and name of your company, the next step is to officially register it in the state where you plan to operate. This process varies by state and legal structure chosen, but generally involves submitting specific documents, such as the Articles of Organization for an LLC or the Articles of Incorporation for a Corporation.

Required Documents

• Articles of Organization or Incorporation: Document that establishes the official creation of the company.
• Certificate of Registration: In some states, a Certificate of Registration or "Certificate of Good Standing" is required.
• Operating Agreement or Bylaws: Document that outlines how the company will be managed, mandatory in some structures like LLCs.

4. Obtaining the Employer Identification Number (EIN)

The Employer Identification Number (EIN) is a unique number assigned by the Internal Revenue Service (IRS) that identifies your business for tax purposes. It is necessary for hiring employees, opening business bank accounts, and fulfilling tax obligations.

At Prodezk, we can handle the EIN application process for you, ensuring that it is completed quickly and accurately. With our service, you will have your EIN ready to use in all necessary business operations.

5. Opening a Business Bank Account

Once you have your EIN, the next step is to open a business bank account in the United States. This account is essential for managing your company’s finances, such as receiving payments, paying suppliers, and handling payroll.

Documents Required to Open a Bank Account

• EIN
• Company Registration Documents
• Personal Identification of the Owner(s)
• Meeting Minutes (for corporations)

6. Complying with Tax Obligations and Licenses

Depending on the type of business and location, you may need to obtain specific licenses or permits to operate legally. Additionally, it is essential to comply with all tax obligations, including filing tax returns and paying state and federal taxes.

Licenses and Permits

• Business License: Generally required by the city or county where your business will operate.
• Special Permits: Depending on the type of activity (restaurants, retail, etc.), you may need additional permits.
• Sales Tax: If you sell taxable products or services, you must register to collect sales tax.

Starting a business in the United States offers numerous opportunities but requires meeting a series of legal and administrative requirements. From choosing the legal structure to opening a business bank account, each step is crucial to ensuring that your business is properly established and ready to operate in the U.S. market.

At Prodezk, we are committed to making this process easier for you. With our advisory and management services, you can be confident that all aspects of your business creation will be handled professionally and efficiently, allowing you to focus on growing your business.

Contact us and receive a free consultation with our business creation experts.