Creating an LLC in the USA is not as difficult as you think.
I’m sure you’ve wondered how to create a Limited Liability Company in the United States? in this article we will tell you how to create this type of company in the United States, so it is important to keep in mind that creating a company in this country is easier than it seems, since the requirements to do so are really few.
Next, we will explain the characteristics of this type of company, what it is about, its advantages, and other important aspects to take into account for the creation and start-up of an LLC.
First important aspect, what is an LLC?
An LLC is an equivalent to what we know as a Limited Liability Company (LLC).
This means that the legal liability of the members is limited to the assets of the company, i.e. only the assets of the company can be claimed in any litigation.
The LLC is a type of organization that exists in the United States under state statutes.
A very important aspect worth highlighting is the fact that the members of the LLC are called members and in the event that any of them wants to resign from the membership, it requires the approval of the others in writing, that is to say, that the acquired responsibility cannot be transferred without the certainty that the other members decide to accept it.
What are the benefits of an LLC?
Since the liability is limited to the company’s assets, this figure protects the owner’s personal assets.
According to the legislation that regulates this type of company, the owner is free to decide how the company will be taxed.
The LLC as a legal entity is not required to pay federal or state corporate taxes; therefore, each member must file a personal tax return.
No documentation required:
No U.S. visa or Social Security Number (SSN) is required for the incorporation of an LL.
All procedures related to the opening and operation of the LLC can be performed 100% remotely.
How many members should you have?
In principle, the number of members required to open the company is a minimum of one, but it can have an unlimited number of members.
How much does it cost to open an LLC?
As in any business, the opening cost will vary depending on the state in which it is established, given that the following are derived: filing costs, taxes, among others, taking into account that each state of the country has its own regulations regarding commercial rates and taxes.
Below are some approximate cost figures for the creation of the LLC:
The States charge a fee on the filing of the documents for the creation of the company. The costs for this procedure are in a range between 50 USD and 500 USD; however, the states that have a lower price are Arizona, Colorado, Iowa.
When selecting the name, and after verifying in the database that it can be used, you can pay 10 USD (may vary in each State) to the Secretary of State to reserve it.
Agent service costs:
The amount to be paid is approximately 125 USD and upwards.
Here you can view the values
Which taxes should be assumed?
There are two types of taxes payable in the U.S. at the corporate level: federal and state. It is important to note that only U.S.-source income is subject to U.S. income tax. federal which are collected by the Internal Revenue Service (IRS) of each State, however, a foreign LLC may be required to file a tax return with the Internal Revenue Service (IRS). no will have to pay federal taxes in the following cases:
- If there is no permanent establishment in the U.S. by the LLC.
- If there are no dependent agents or workers in the US.
- If none of the members of the LLC is a U.S. resident.
By meeting these requirements, you can be exempted from paying these corporate taxes and will only have to account for your personal taxes on your annual tax return.
On the other hand, state taxes state taxes will not have to be paid depending on the State in which the LLC is registered.
This tax will apply when the company sells tangible products in the U.S., has exceeded a certain invoiced amount or has an increase in a certain amount of profits.
Tax rates are within a range of 1% to 12%.
Here is a step-by-step guide to open an LLC
Select the state of incorporation:
There are several states that provide better benefits for the interested parties (the incorporation and maintenance costs of the LLC are lower, they guarantee the privacy of the members of the company and some do not require the collection of taxes).
All these characteristics vary according to the State selected. These include Florida, Wyoming, Delaware and Nevada.
Choose a name for the LLC:
A name for the company must be selected and it is required to verify in the State’s database that it is not in use.
Establish a virtual business address:
This is a service available in the U.S. that allows the registration of a remote address for the operation of the LLC, which is required by law.
Establish a registered agent:
This is the person in charge of receiving and handling the tax and legal documentation of the LLC in the United States. It is essential that one be hired because it is required by law (in most states).
Register the LLC:
You will have to send a formation document to the State, which will eventually issue a certificate of incorporation of the company.
The minimum fee for this certificate is 90 USD.
At the moment of creating the LLC, a charter must be prepared, and exceptionally, an operating agreement (depending on the State, this document may or may not be required).
Apply for an Employer Identification Number (EIN):
The SS-4 form must be filled out and then mailed to the Internal Revenue Service to request the tax number to be used for invoicing and to open a bank account.
This process takes 45 business days. At the same time, it is necessary to indicate which is the EIN of the LLC since only with this one it is possible to operate. This procedure is free of charge.
Open a bank account for the company:
There are multiple online banks through which you can open your account from anywhere.
Once you have fulfilled the requirements in each of the above steps, you will have your LLC set up and ready to operate.
Internal Revenue Service – IRS (2023). Limited Liability Company (LLC). Retrieved from: https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
Moyer, P (2023).
How to set up an LLC in 6 steps.
LLC buddy (2023).
LLC cost: How much does it cost to form an LLC.
Active Filings (2023).
FAQs for Non Us residents incorporating in the USA.