Business Registration

Business Registration/ Formation

If you’re a business owner looking to expand your business into the United States, it’s recommended that you register a corporation and establish a virtual office. Proper registration of your corporation based on US laws is crucial for starting your business operations on the right foot.

Anty Virtual provides solutions to help you register your Corporation and obtain the necessary documentation to get started. Virtual addresses allow you to run your business from anywhere, and they significantly enhance your credibility while saving you a lot of money compared to traditional office costs and commercial leases. This is particularly true when combined with our virtual reception service.

As the owner of a virtual business, it is important to have a physical address where you can receive your mail, including tax papers, bills, letters, and other important documents.

Business Entity Types

A. LLC: Limited Liability Corporation
The term LLC stands for “limited liability company.” It refers to a type of business entity that provides protection to its owners from personal liability in case of any business-related lawsuits or debts. This means that the personal assets of the business owners, such as their house or car, are generally not at risk in such situations.
A LLC is a type of business structure that has its own legal existence separate from its owners. This means that the owners and managers of a LLC are not personally responsible for the company’s debts and obligations. One of the advantages of a LLC is that it can be treated as a pass-through entity for tax purposes. This means that the LLC itself is not taxed, but instead, the profits and losses are passed through to the owners and are taxed on their personal tax returns. It is important to note that while LLCs can be treated as legal partnerships, they are not corporations. The owners, or members, can be individuals or any type of entity, from anywhere in the world, and there is no limit to the number of members that can be a part of the LLC.

Advantages of LLC

Creating a Limited Liability Company (LLC) offers several advantages, such as low start-up costs and an affordable Franchise Tax. Setting up a LLC is easy, affordable, and beneficial, which is why most businesses create their business in Delaware, even if they are operating elsewhere. The Delaware LLC has unique features that make it an attractive option for non-resident aliens of the United States. When combined with non-U.S. source income, they can avoid U.S. taxation by using an LLC. The Delaware LLC is a unique business entity because the structure of the company and the rules that govern the members or owners are contained in a contract called the operating agreement. This agreement is drafted by the members of the company and can be customized to provide for whatever terms they want, subject to law and public policy. The contractual flexibility offered by the state of Delaware is unmatched by any other LLC statute in any other state. When creating an LLC in Delaware, members will have asset protection against liability and creditors. A limitation on personal liability means that LLC members cannot be held responsible for an amount higher than their initial investment in the LLC, even if they participate in management. Therefore, if a member is sued and a judgment is levied against them personally, the judgment creditor cannot take the assets owned directly by their Delaware LLC.

Creating a single-member LLC can be a good way to purchase assets anonymously. For instance, if you form a single-member LLC in Delaware, you can enter into a contract to buy a piece of real estate without disclosing your personal identity to the seller. Once you buy the property and title it in the name of your Delaware LLC, your identity will remain private because no one can search public records to connect you with the LLC. Similarly, if your LLC faces legal action and a judgment is made against it, creditors cannot go after assets that are not owned by the LLC.

B. C-Corporation

A C corporation, also known as a C corp, is a type of legal entity for a corporation where the owners, or shareholders, are taxed separately from the company. C corporations are the most common type of corporation and are also subject to corporate income taxation. Due to double taxation, the profits from the business are taxed at both the corporate and personal levels.
Nowadays, many people have startup ideas such as an app that saves time, a healthy food delivery service, or a way to train a dog through osmosis. However, before you start dreaming about making millions of dollars, you need to form a Delaware C corporation. Almost every company that appears on “Shark Tank” is already a Delaware C corporation, or they are ready to become one quickly. This is because the first requirement of any serious investor, angel investor, or Venture Capitalist is that your company must be a Delaware C corporation before they can even consider investing in it.

Advantages of C Corporations over LLC’s

There are many reasons why investors prefer corporations over LLCs. Firstly, it is difficult to sell or transfer membership or ownership in an LLC, whereas it is relatively easy to trade shares in a corporation. Secondly, corporations offer more consistency on managerial duties and responsibilities.

Why Venture Capitalists Prefer Delaware C-Corps?

Venture capitalists consider stock as a crucial aspect of their investment. C corporations are preferred by VCs because Delaware law permits multiple classes of stock. A venture-funded company usually has common stock, founder’s stock, and different classes of preferred stock, including convertible preferred stock, allowing an investor to convert it to common stock once the company goes public. Delaware C corporations are also able to grant stock options as incentives to employees, board members, and directors. VCs approve of this since talented, successful, and innovative employees are essential to the success of a startup company, leading to growth and profitability. Stock options are an effective and cost-efficient means of motivating and rewarding hardworking and ambitious employees, board members, and directors. VCs also consider taxation when investing. In C corporations, fringe benefits can be deducted as a business expense, allowing a corporation to pay all its employees’ benefits and deduct the amount from their taxes as business expenses. Typically, neither the employees nor the owners owe any income tax on the value of many common fringe benefits.

Virtual Business Address:

As the owner of a virtual business, it is important to have a physical address where you can receive your mail, including tax papers, bills, letters, and other important documents. To address this need, virtual mailing address companies can receive and scan your mail before sending it to your digital mailbox. Additionally, having a professional address can help maintain your business’s image.

Anty Virtual registers a virtual address

Once we register your business, we will provide you with the exact address details, including the street number and suite number, which you can use in your marketing materials.
Now you can establish your business presence in the US with a virtual address. This way, you can work remotely and still maintain a professional image.
Anty Virtual will notify you and email you a copy of the mail once it’s delivered to your virtual address. we’ll also open and scan it for you.

Comparison Between LLC and C-Corporation

	Limited Liability Company (LLC)	C-Corporation
Formation	State filing required	State filing required. Within 75 days of formation, Form 2553 required to be filed with the IRS
Liability	Typically, members not personally liable for the debts of the LLC	Typically, shareholders are not personally liable for debts of the corporation
Raising Capital	Potential to sell interests, contingent upon Operating Agreement restrictions	Shares of stock are usually sold to raise capital. Venture capitalists and angel investors are typically a good source of funding
Taxation	Not taxed at entity level if properly structured. Profit/loss passed through directly to the members	Fringe benefits and owners’ salaries can be deducted as business expenses. Shareholders may face double taxation
Formalities	Less formal meetings and minutes are required; state reporting required	Board of Directors, formal meetings, minutes and annual state reports required
Management	Members have an Operating Agreement that outlines management responsibilities	Shareholders elect Board of Directors to appoint officers for day-to-day management
Existence	Perpetual unless otherwise specified	Perpetual unless otherwise specified
Transferability	Contingent upon Operating Agreement restrictions	Restrictions on transferring shares of stock.