How to Start a Business in The USA by MyUSACorporation - HTML preview

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  1. If your business establishes physical presence in another state, such as opening an office, hiring full time employees, opening a store, or leasing a warehouse, among other activities, you might be creating "hard nexus", which would require you to register your company in that state as "foreign entity".

 

Consulting an attorney

 

If you are still not sure where to register your company it's always a good idea to consult a corporate attorney. Though it might be a bit expensive, there are plenty of online resources allowing you to ask for a free consultation, or free answering service that you could use for that purpose.

 

Should I register LLC or Corporation?

Question of "LLC vs. Corp" is one dealing primarily with taxation and with formation and maintenance costs. We will consider several points on interest and show you how those two entity types compare to each other.

 

Limited Liability Protection

 

Both entities provide limited liability protection to the owners, so in that regard there is probably not much meaningful difference between the entities.

 

Formalities

 

As far as formalities go, corporations require somewhat more formalities, while LLCs go easier on formalities.

 

Corporations have three levels of ownership and management - shareholders own the corporation through holding of shares, and they elect directors who manage the affairs and decide on the general business strategy of the corporation. Board of directors in turn appoints officers, who run the day to day operations of the corporation. All that is governed by the corporate bylaws, and the ownership and management of the corporation is defined through series of meetings, for which minutes must be created and maintained in company records.

 

LLC has two levels of ownership/management - members of the LLC are the owners, and managers manage the LLC. LLCs can be memeber-managed, which means all managers are also members (but not necessarily all members are also managers), and manager-managed, meaning some or all managers are NOT members of the LLC. LLC typically would need an Operating Agreement to govern its structure and operation, and in which membership and management are defined, among other things. LLCs also need to have meetings of members, which should be recorded via minutes, however this requirement is less strict for LLCs compared to corporations.