LLC (Limited Liability Company):
- Ideal for Small Business Owners: LLCs are often more attractive to small business owners due to the absence of corporate-level taxation. Members file income taxes based on their share of the profits.
- Document Requirements:
- Certificate of Formation: This document is essential for registering the LLC with the state.
- EIN (Employer Identification Number): Issued by the IRS, this number is necessary for tax filing, hiring employees, and opening a business bank account.
- Operating Agreement: Outlines the internal operating procedures and member responsibilities.
C Corp (C Corporation):
- Ideal for Raising Capital: C Corps can participate in the stock market, making them better suited for ventures looking to raise outside capital.
- Document Requirements:
- Certificate of Incorporation: Required for registering the C Corp with the state.
- EIN (Employer Identification Number): Required for the same purposes as an LLC.
- Bylaws: These function similarly to the LLC’s Operating Agreement but for C Corps.
- Minutes of Organizational Meeting: Documents the initial meeting of the corporation’s board of directors.
- Stock Ledger and Stock Certificate: Track and certify stock ownership.
Additional Steps for Both Entities:
- Registered Agent: Both LLCs and C Corps need to hire a registered agent, an individual or entity that serves as an intermediary between the business and the state.
- Virtual Address: Required for receiving IRS mail, opening a bank account, or registering the business on platforms like Amazon. Services like Export Manager can provide a virtual address and handle these administrative tasks remotely.
Summary:
- LLC: Suitable for small businesses due to simpler tax requirements.
- C Corp: Better for businesses planning to raise substantial capital through investors or the stock market.
Practical Assistance:
- Export Manager Services: They offer comprehensive services including EIN application, registered agent service, and virtual address provision, making it easier for foreign entrepreneurs to establish a US-based business without being physically present in the country.
This summary should help you understand the basic requirements and advantages of both LLCs and C Corps, guiding you in making an informed decision based on your business needs.