How to Incorporate Company in Panam...
Panamanian Corporations are incorporated under the law no. 32 of the year 1927 and the Commerci...
The Registration of Different Corporate Structures in the USA is a very easy process. Registration can be done through an online or offline process. The person who is applying for Registration of Corporate Structures in the USA is required to follow the prescribed guidelines by each state.
Any individual, whether foreign national or not, can go for Registration of Different Corporate Structures in the USA. Whenever any individual starts a new business, there are necessary steps that are to be taken. The necessary steps includes choosing the correct Corporate Structure as one of the important steps.
The kind of Corporate Structure has a direct impact on the way how the Different Corporate Structures in the USA will be taxed. In the article, we will discuss in detail the complete overview of the Different Corporate Structures in the USA.
Corporate Structures refers to how the organization of a business is done to accomplish its aimed objectives. The Corporate Structure of business is fundamental as it determines the control, ownership, and authority of the new organization set up by an individual. In a Corporation, the characteristics mentioned earlier are represented by three groups, the directors, shareholders, and officers.
The ownership of the organization belongs to the shareholders. The control of the organization is exercised by the Board of Directors on behalf of all the shareholders. The authority of the day-to-day operations of the organization is vested in the officers.
Each state has its own laws, rules, regulations, and requirements for Different Corporate Structures in the USA. All the officers have to work in the place where the company is incorporated. In the case where the business is open in another state, the owners of businesses are required to register their businesses once again in that state.
Thus, each business that is registered is only limited to a particular state, and such a business comes under the State authority of that state only.
The Different Corporate Structures in the USA are as follows:
The owner can run any form of formal Corporate Structures in the USA after getting it registering with the authority. A single-owner simply runs Corporate Structures in the USA as a Sole Proprietorship. The owner of Sole Proprietorship is required to simply report their losses and profits. These profits and losses are to be reported on the personal tax return of the owners of Sole Proprietorship.
Out of the Different Corporate Structures in the USA, when a business is incorporated as a sole proprietorship, it allows the owners of such business to have total control over company operations and management. The types of companies that typically form Sole Proprietorships in the USA are a shop or retail businesses, and one-person consulting firms, and home-based businesses.
There are three types of Corporations in the USA:
A C Corporation is the most commonly chosen corporate structure for the medium and large companies.
The primary characteristics of General Corporation are as follows:
A Close Corporation in the USA is similar to a C Corporation or General Corporation.
There are some of the exceptions for the following aspects in case of Closed Corporations:
An S Corporation is actually a form of C Corporation which obtains special tax status from the IRS or Internal Revenue Service in the USA. The S Corporation must apply to get the special tax status within a specific time period after the incorporation of such S corporation.
When S corporation is being taxed at a corporate level, the losses and profits are transferred, for the purpose of tax, to the Shareholders as they were partners of the Corporation. At the Corporate level and the personal level, double taxation is avoided, and there is no alteration in any of the legal protection offered by a Company.
The characteristics of S Corporations are as follows:
Limited Liability Company was introduced in the USA by the State of Wyoming in the year 1977. Now, Limited Liability Company is recognized by all the states in the USA. The LLC or Limited Liability Company is a profitable mix of a Partnership and a Corporation.
As a general rule, the losses and revenues of a Limited Liability Company or LLC are allotted to the members of the LLC, which are equivalent to the shareholders in a Corporation. The limited liability of the members avoids double taxation to the Limited Liability Company and the members of the LLC. This type of Limited Liability Company is similar to the S Corporation, but without the restrictions attached to the S Corporation.
There are two types of LLC’s or Limited Liability Companies in the USA:
A Partnership is often operated when two or more owners want to participate or contribute to the daily operation of the business. The Partnership begins as soon as the business activity commences with another individual.
Even though the law does not require documentation, most partners draw up a written agreement of the Partnership to outline the responsibility of partners.
The agreement of Partnership is required to state in detail how the profits and losses are to be distributed among partners. If any written agreement is not created by the partners, then the law of Partnership laws of the state will govern the operations of the Partnership. Making the Partnership agreement will allow the partners of the Partnership an opportunity to clearly spell out the expectations that they have from each other while working.
There are three kinds of Different Partnership Corporate Structures in the USA, which are as follows:
In simple terms, a Non-Profit Organization takes any profits it receives from the services, goods, donations, or sponsorships. The Non-Profit Organisations then cycles all the profits back into the organization to further achieve its goals and mission set while incorporation of the organization.
Non-Profits Organisations commonly serve communities like clubs, associations, churches, chambers of commerce, etc., or are organized around the social causes like disease research, humanitarian aid, education funding, etc. In contrast, the for-profit businesses distribute their profits to the investors and shareholders.
The advantages of Different Corporate Structures in the USA are as follows:
The advantages of Sole Proprietorship Corporate Structure in the USA:
The advantages of Corporation in the USA are as follows:
The advantages of Partnership in the USA are as follows:
The advantages of Limited Liability Company in the USA:
The advantages of Non-Profit Organisations in the USA are as follows:
The most common forms of Corporate Structures in the USA are Sole Proprietorship, Corporation,and Partnership. A recent development to these forms of Corporate Structuresin the USA is the Limited Liability Company or LLC. Each Corporate Structure in the USA comes with different tax consequences.
So, the person going for the incorporation of the entity is required to make the selection of Corporate Structures in the USA very wisely. One should choose that Corporate Structure, which most closely matches the business needs of the person.
Also, read: Professional Corporations in USA: A Complete Overview