Starting an overseas business may seem like an overwhelming task. People who live in countries/jurisdictions with large and difficult bureaucracies might find it hard to believe how easy it is to start a business in Delaware. Incorporating firms in Delaware can have new businesses ready to start operating within one business day. Here are some of the essential steps, laid out clearly, to starting an offshore business in Delaware.
Decide between Corporation and LLC
The first step that foreigners need to complete when opening a business in the United States is deciding what type of corporate entity suits their business. This means choosing between a corporation and an LLC (limited liability company). Many new businesses form as corporations because they pay can lower taxes and because it is easier to raise investment capital by offering stock in the company. Other businesses choose to form LLCs because it is easier to file tax returns. Most entities that own investment properties are formed as LLCs.
Select a name
The next step in forming an entity is deciding what to call it. The Secretary of State restricts new businesses from using names that are already being used. There are also restrictions on using names that sound similar to businesses that in operation.
Find a registered agent
Businesses in Delaware are required to have a legal address within the state. The Registered Agent’s address is where business receive official mail from the state and federal governments. Court subpoenas are received by registered agents.
Obtain Employer Identification Number
Employee Identification Numbers (EINs) are like Social Security numbers for companies. Businesses that wish to hire employees must obtain EINs in order to pay employee withholding taxes for Social Security. Most banks will not open accounts for businesses that do not have an EIN. Investors and banks will usually require an EIN before lending money to a business.
Create an operating agreement or by-laws
This document establishes how the company will be run. This agreement can specify how profits and losses will be allocated to owners. It establishes the responsibilities of directors and owners of the corporation. This document also lays out how corporate governance meetings will be held. Operating agreements can also include provisions dictating how a buyout will be structured in the event that one partner wants to sell his stake in the company.
The State of Delaware is justly famous for making the incorporation painless and profitable. The cost is relatively low and the compliance requirements are small and “business friendly.”
It is not surprise that so many businesses choose to incorporate in Delaware. Over half of Fortune 500 companies are currently headquartered in Delaware. Inc. Plan (USA) can have your business operation in one business day.