The United States of America is known as a land of opportunities. In human known history, no nation has ever come close to the tenth of what the USA has achieved. The country is also popularly known as the land of immigrants. The versatility and diversity of immigrants that we see in the U.S. are incomparable.
Doing business in the U.S. is a dream of probably every ambitious soul on the planet. Some significant factors that influence business growth are a) consumers’ buying power b) abundance of dispensable income c) access to cutting-edge technology d) strong global trade ties e) access to raw materials and most skilled human resources f) progressive government policies g) stable political system, etc.
Types of business structures in the U.S.
In the U.S., entrepreneurship is encouraged at every level of society. There are hundreds of examples where college drop-outs chose to pursue their dreams instead of conventional education and were able to build an empire. The system supported and propelled these dreamers by providing easy, accessible, and economical opportunities.
Business structures that are permissible in the U.S. are stated here.
| S# | Type of business structure | Local Name | Min.paid-up capital required |
| 1. | Sole Proprietorship | Sole Trader | No minimum capital required |
| 2. | Partnership | – | No minimum capital required |
| 3. | Limited Liability Company | – | $1 – $100 or more (depending on state) |
| 4. | Public Limited Company | Corporation | $ – $100 or more (depending on stat) |
| 5. | S Corporation |
Sole proprietorship
A sole proprietary business is owned and managed by a single person. The owner is responsible for all aspects of the business without any legal cushion against liabilities and debts.
Partnership
This is a business structure in which two or more people share ownership of a business. Partners share in the profits and losses of the business, and each partner is responsible for the business’s debts to the extent agreed mutually, i.e., whether with personal assets or merely to the extent of their contributions.
Limited liability company (LLC)
An LLC is a type of business structure that combines the advantages of a partnership and a corporation. Owners of an LLC are referred to as members and enjoy limited personal liability for the debts and obligations of the business.
Corporation
A corporation is recognized as a legal person. The shareholders own the corporation and elect a board of directors to oversee the corporation’s management. The corporation’s profits are taxed separately from the shareholders’ personal income.
S Corporation
In an S corporation the profits and losses of a company are reflected in the shareholders accounts, as they are directly passed on to them. It means that the shareholders report them on their personal tax returns.
Costs involved in registering a company in the US
The costs involved in registering and incorporating a company in the US are influenced by several factors such as the state where the company is being registered, the type of business entity, and any additional legal or professional fees.
Here is a general breakdown of the costs involved in registering and incorporating a company in the US:
State Filing Fees
Each state charges a fee to file the necessary documents to form a new company. These fees vary by state but generally range from $50 to $500 or more.
Legal Fees
Many business owners choose to work with an attorney to help them navigate the legal requirements of forming a new company. The cost of legal fees can vary widely depending on the attorney and the complexity of the legal work involved.
Registered Agent Fees
In many states, a registered agent is required to accept legal documents on behalf of the company. The cost of a registered agent can vary but generally ranges from $100 to $300 per year.
Publication Fees
A few states require new companies to publish a notice of their formation in a local newspaper. The cost of publication fees can vary depending on the newspaper and the location of the company.
Business Licenses and Permits
Depending on the nature of the business, the company may need to obtain additional licenses and permits to operate legally. The cost of these licenses and permits can vary widely depending on the state and the type of business.
In summary, the cost of registering and incorporating a company in the U.S. can range from a few hundred dollars to several thousand dollars, depending on the circumstances and nature of the business.
Cost of doing business in the US
In the U.S., costs incurred while doing business purely depend on the nature, size, and location of the company. Here are some costs that are most likely to be incurred in almost every state of the country. They may, however, vary from state to state.
Labor Costs
One of the biggest costs for most businesses is labor. The cost of wages, salaries, benefits, and taxes can vary widely depending on the state, industry, and type of job. The minimum wage in the US ranges from $7.25 to $15 per hour, depending on the state, and many states have additional labor regulations that can impact labor costs.
Taxes
Businesses in the US are subject to federal, state, and local taxes. Federal taxes can include income tax, employment taxes, and excise taxes, while state and local taxes can include sales tax, property tax, and business taxes. The exact tax burden will depend on the type of business, its location, and its profitability.
Real Estate
The cost of real estate can vary widely depending on the location and type of property. Commercial real estate prices are often higher in major cities and can be a significant expense for many businesses.
Regulatory Compliance
Depending on the industry and type of business, there may be a significant cost associated with complying with various regulations and standards. These can include environmental regulations, safety standards, and industry-specific regulations.
Marketing and Advertising
The cost of marketing and advertising can vary widely depending on the size of the business and the channels used. Online advertising, social media marketing, and traditional advertising methods such as print and television can all have significant costs associated with them.
Technology and Equipment
Businesses often need to invest in technology and equipment to operate efficiently. Especially in the US, where the consumers and B2B clients are used to a certain level of service; things that may be considered a luxury elsewhere, in the US it may be taken as a given. Hence, to keep up with the expectations companies may require regular upgradation of their systems, service delivery, products, and other consumer interaction points. These costs can include hardware, software, and ongoing maintenance and support.
