New Federal Requirement: Starting January 1, 2024, most business entities in the US will need to report Beneficial Ownership Information.
I have a Canadian Incorporated entity (ABC Canada Inc.) to provide IT services in Canada. ABC Inc likes to open an entity in the USA (in one of the states: Michigan, Illinois, New York). Say, the USA entity will be like a sister company of ABC Canada Inc.
I plan to have USA based clients and employees. The USA Entity will generate income from USA clients. My employees who are residents of USA will work for my USA clients.
I do not plan to move to USA. I like to maintain a Bank Account and phone #, address for the USA clients and my employees, so it is easier to manage the income, salary for USA employees.
What type of USA entity that ABC Inc should register in the USA? What are formalities? Can I register over the Internet? After registering the USA entity, can I just visit the USA and open the Bank Account for the entity?
Dear Arun,
Allow me to answer your questions one by one:
1. What type of entity should ABC Inc. register in the USA? Judging by the description of the business your best bet would probably be to form an LLC. Corporation would also work of course, however keep in mind that since the owner of the corporation will be a non??US entity you will not be able to elect it to be taxed as S-Corp, meaning you are facing the problem of double taxation.
2. What are formalities? Opening an LLC requires filing Articles of Organization with the Secretary of State where the company is to be formed, obtaining an EIN from the IRS and probably a few more procedures, depending on the state. We offer full service company formations, so our clients just submit their request on our website and we take it from there. As far as formalities to maintain the company go, LLC typically has less formalities than corporations, and they include creating an Operating Agreement and filing reports (annual, biennial, etc, again, depending on the state).
3. Can I register over the Internet? You can register an LLC online using a service such as ours.
4. After registering the USA entity, can I just visit the USA and open the Bank Account for the entity? Yes, to open a bank account you would need to travel to the US. Once you have your company documents you can plan your visit to the US. Make sure to bring a piece of ID (passport would work) and a bank statement from your Canadian bank (as a proof of address).
(a) You made a typo in the card number, CCV code, expiration date, name or address;
(b) Your card balance is too low;
(c) Issuing bank has declined this transaction for some other reason related to your account.
