A Comprehensive Guide to Incorporating a Business in the United States

Incorporating a business in the United States involves the establishment of a separate legal entity, shielding owners from personal liability. Benefits include asset protection and enhanced credibility.

Par value is the minimum price at which a share can be issued. For businesses, particularly Delaware C Corporations aiming to raise venture capital, a low par value is generally preferred, as it impacts the annual franchise fee. In contrast, Wyoming-based businesses are not subject to franchise fees.

For Delaware corporations, franchise fees can be calculated using two primary methods. The lower resulting fee is generally chosen.

Authorized Shares Method:

• The annual fee starts at $175 for up to 5,000 shares.
• The fee increases progressively for additional shares, with a maximum annual tax of $200,000.

Par Value Method:

• This calculation involves the number of authorized and issued shares, as well as total gross assets.
• The tax rate is $400 per million or portion thereof in assumed par value capital.

The incorporator is responsible for filing the Certificate of Incorporation and other essential documents. Their authority concludes once the corporation is registered and the initial director is appointed.

• CEO: Oversees daily operations and strategic decisions.
• President: Manages logistics and policy implementation.
• CFO: Responsible for financial management.
• Secretary: Manages corporate records and documentation.

Note: A single individual can hold multiple roles.

The Certificate of Incorporation, submitted to the Delaware Secretary of State, marks the legal inception of a company. Minimal information is required for this document.

The Board of Directors adopts the company's bylaws, which outline internal governance procedures.

The selected company name should be unique to avoid legal issues. Business name checks and trademarking services are often offered by incorporation service providers.

Both shareholders in corporations and members in LLCs represent ownership, with the key difference being the extent of involvement in day-to-day operations and liability. There are no citizenship requirements for ownership.

Wyoming

• Advantages: Lower costs, flexibility, and privacy.
• Franchise Tax: None.
• Ownership Information: Kept confidential.

Delaware

• Advantages: Strong legal protections and favorable corporate laws.
• Franchise Tax: Annual fee of $300 for LLCs; $175-$400 for Corporations depending on the chosen calculation method.
• Ownership Information: Not publicly disclosed.

Incorporating in the U.S. involves various steps and decisions, from choosing the state of incorporation to selecting the right business structure. For more information, consult with professionals and complete the relevant online applications.

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