How to Register a Business in the US from United States of America

Step 1: Benefits of starting your US business from United States of America

Starting a business in the United States comes with numerous advantages that can pave the way for success and growth. One of the most significant benefits is access to one of the world's largest and most diverse markets. With a population of over 330 million people and a strong consumer culture, businesses in the U.S. have the potential to reach a wide array of customers with varying tastes and preferences. This market diversity allows entrepreneurs the flexibility to innovate and cater to different demographic segments, thereby increasing their chances of success.

Another key advantage of starting a business in the U.S. is the robust support system available for entrepreneurs. The U.S. boasts a well-developed network of financial institutions, venture capitalists, and government programs that provide funding and resources to startups and small businesses. Additionally, the country has a strong legal framework that protects intellectual property, ensuring that innovations and business ideas are safeguarded. Furthermore, the entrepreneurial culture in the U.S. encourages risk-taking and innovation, creating an environment where new businesses can thrive and grow.

Step 2: How to start your US business from United States of America

Starting a business in the United States is a structured process that often involves several key steps. First, it’s important to conduct thorough market research to understand your industry, target customers, and competitive landscape. This initial research helps in crafting a solid business plan, which is crucial for obtaining funding, forecasting growth, and guiding your operations. A business plan typically includes an executive summary, business description, market analysis, organization structure, product or service line, marketing strategy, and financial projections.

Next, choose a suitable legal structure for your business. Common structures in the U.S. include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has different legal and tax implications. After selecting your structure, you’ll need to register your business name with the appropriate government authorities. This often involves registering with your state and obtaining a federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes. Additionally, ensure compliance with local, state, and federal regulations by acquiring the necessary licenses and permits pertinent to your business’s operations.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in United States of America

Understanding Compliance Requirements for Running a US Business

Compliance is a crucial aspect of operating a business in the United States. Understanding the various requirements can help you avoid legal issues and ensure that your company operates smoothly. Several key considerations need particular attention.

Legal Structures

The type of legal structure you choose for your business (such as sole proprietorship, partnership, corporation, or LLC) will influence your compliance requirements. Each structure has specific:

• Tax implications
• Regulatory requirements
• Liability considerations

Licenses and Permits

Businesses in the U.S. must often obtain various licenses and permits to operate legally. The type and number vary depending on:

• Industry
• Location
• State and local regulations

Labor Laws

Compliance with labor laws is essential for any business with employees. Ensure you're familiar with:

• Minimum wage regulations
• Overtime pay requirements
• Health and safety standards
• Non-discrimination policies

Compiling an employee handbook that outlines these policies can be a helpful tool for staying compliant.

Tax Obligations

Meeting your tax obligations is another critical aspect of running a business in the US. This encompasses:

• Federal taxes
• State taxes
• Local taxes

You'll need to understand the various forms of taxation, such as income tax, employment tax, and sales tax, and ensure timely filings and payments.

Consumer Protection Laws

Adhering to consumer protection laws is vital for businesses that deal directly with the public. Key aspects include:

• Accurate product labeling
• Fair advertising practices
• Data protection and privacy

Environmental Regulations

Depending on your industry, you may also need to comply with environmental regulations. Consider:

• Waste management practices
• Emissions standards
• Proper disposal of hazardous materials

By thoroughly understanding these compliance requirements, you can better navigate the complexities of running a business in the United States. Always consider consulting with a legal or compliance professional to ensure you meet all required regulations.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in United States of America

Understanding Tax Obligations for Running a US Business

Running a business in the United States comes with a range of tax obligations that vary depending on the structure and operations of the business. Understanding these considerations is crucial for compliance and financial planning. Here are some key points to keep in mind:

Business Structure and Taxes

Your business structure significantly influences your tax obligations. Common structures include:

1. Sole Proprietorship: Income and expenses are reported on your personal tax return. You must also pay self-employment taxes.
2. Partnership: Each partner reports their share of income and expenses on their personal tax returns. Partnerships are required to file an annual information return.
3. Corporation: Corporations are subject to corporate income tax. Shareholders are taxed on dividends, leading to potential double taxation.
4. S Corporation: Income is passed through to shareholders and reported on their individual tax returns, avoiding double taxation.
5. Limited Liability Company (LLC): Taxed based on their classification (sole proprietorship, partnership, or corporation), offering flexibility.

Federal Tax Requirements

All businesses must meet federal tax requirements, such as:

• Employer Identification Number (EIN): Required for most businesses for filing and reporting purposes.
• Income Tax: Annual federal income tax return and estimated tax payments may be required.
• Self-Employment Tax: Covers Social Security and Medicare for self-employed individuals.
• Employment Taxes: Includes Social Security, Medicare, federal unemployment tax, and federal income tax withholding.

State and Local Taxes

Beyond federal taxes, businesses must comply with state and local tax requirements, which can vary significantly:

• State Income Tax: Rates and regulations differ by state. Some states do not impose income tax on individuals or businesses.
• Sales Tax: Collected on the sale of goods and services, rates, and rules vary by jurisdiction.
• Property Tax: Levied on real estate and, in some cases, business property.
• Gross Receipts Tax: Applied to a company’s total revenues in some states.

Deductible Business Expenses

Understanding what business expenses are deductible can lower your taxable income, such as:

• Operating Expenses: Costs necessary for running the business, like rent, utilities, and office supplies.
• Travel and Meals: Business-related travel and meals may be partially deductible.
• Employee Salaries and Benefits: Wages, health insurance, and retirement plans.
• Depreciation: Deducting the cost of business assets over time.

Recordkeeping and Reporting

Maintaining accurate records is essential for compliance and can help during audits:

• Sales Records: Track all income from sales and services.
• Expense Receipts: Keep detailed records of all business expenses.
• Employee Documentation: Payroll, benefits, and tax withholding records.
• Financial Statements: Prepare balance sheets, income statements, and cash flow statements.

Understanding and managing tax obligations is a critical aspect of running a business in the United States. Consulting with a tax professional can help ensure compliance and optimize your tax situation.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country