LLC or C Corp?
Starting a business in the USA requires great diligence and a good understanding of how companies operate in the United States.
Before starting the process, take the time to learn about the type of business you can start in the USA. Indeed, as in any other country, there are rules to follow. For example, as a non-U.S. resident, certain business structures are prohibited to you.
Put simply, you have 2 main options for your company in the United States:
- The C Corp (C Corporation)
- The LLC (Limited Liability Company)
What type of business is each status intended for?
The C Corp
A C Corporation is a status primarily intended for large companies:
- Those listed on the stock exchange
- Those that seek investment
Our firm does not handle the registration of companies under this status. In fact, large companies are not part of our target audience. Small and medium-sized businesses would take too great a risk by choosing this status.
However, if you feel that a C Corp is the status you need to enter the US market, we can recommend a reliable partner who can assist you with all your procedures.
The LLC
The LLC (Limited Liability Company) is an ideal business structure for entrepreneurs who want to launch a small or medium-sized business in the United States. To date, it is the structure that presents the fewest risks for business owners who want to get started in the USA. In addition, the LLC offers a number of advantages that allow entrepreneurs to easily set up and then develop their company under good conditions.
We chose to support business owners who want to set up an LLC in the United States, particularly because it is the structure that best meets our clients' needs.
The main advantages
Benefits of a C Corp
This status is highly advantageous for large companies:
- A distinction is made between the shareholders and the company itself
- Profits, as well as losses, are taxed within the company
- Shareholders can decide to raise capital by selling shares
- Finally, this status makes it possible to transfer shares
Benefits of an LLC
An LLC is a highly advantageous business structure. Here is a list of its benefits (please note that this list is not exhaustive):
- The company can have an unlimited number of members.
- No taxation at the company level itself.
- The owner can choose the tax status of their business (corporation or pass-through).
- Limited risk: the members' personal liability is limited to their contributions, and their assets are protected. In addition, creditors cannot seize the company's assets or the voting rights of the company's members.
- Profit distribution is flexible.
- Freedom to draft the operating agreement. This also makes it possible to reduce certain administrative formalities, such as preparing minutes or meeting records...
Is an LLC the structure that interests you for the business you want to launch in the USA? If you have any questions, please do not hesitate to contact one of our advisers. We will do our best to provide you with the information you need.