The following are the most widespread corporate forms:
We note that the concept of Sole Proprietorship is applicable only to the individual entrepreneur, while the other types of listed companies can be applied to companies of different sizes, from small to major multinational. Costs for setting up companies are roughly equivalent, and there are no prejudices against any of the categories, in either the formal or economic sense.
It should also be considered that the most commonly used corporate categories in the United States are Corporations, also called Inc. or Corp. and the Limited Liability Company, also called LLC, the peculiarities of which are similar, respectively, to the Italian S.p.A. and S.r.l.
On the other hand, the Italian S.a.s. is quite similar to the Limited Partnership, except for the liability of active partners which is much lower in the American case. Finally, it is curious to note that as LLCs have taken hold, the establishment of Limited Partnerships has diminished exponentially.
At the level of taxation, the Corporation is fundamentally different from the Limited Partnership and the LLC, while the latter has many points in common, especially in the purposes for which they are used. Generally speaking, LLCs are more versatile and better manageable from the point of view of procedures to be carried out; in addition, LLCs have more efficient bodies than Corporations, although it is also common practice to apply many classic institutions of the Corporation to LLCs, so that the two corporate typologies differ even less.
U.S. companies are regulated by the jurisdiction and administration of the State in which they were founded, as well as the State in which the company is physically located and where it trades. American companies are subject to the administrative and judicial power of the State of establishment, as well as the State where companies are physically domiciled and where they have active business relations; this is due to the fact that each State has its own legislation. As for the foundation of a Corporation or an LLC, it is commonly believed that, for companies, the State of Delaware has developed a cutting-edge legal and tax affairs structure that favours very functional management of a company; this virtue is particularly efficient for sufficiently large companies that trade their products in different States. In fact, and also thanks to the many companies that decide to elect it as their home State, Delaware has a set of tax tribunals and agents of the administration itself with major experience in business and corporate law. In any case, the foundation of a company generally calls for a streamlined and expeditious praxis: for example, in Delaware and other States, it takes just a couple of days. In order to ratify the foundation of a company, a lawyer prepares a deed that sanctions its effective constitution: for example, for Corporations it is called the Certificate of Incorporation. The lawyer often also has the function of incorporator, that is, a person who deputises for the entire company until convening of the first meeting of corporate bodies.
There is no minimum share capital, and there is no need to have an American resident among the partners or on the Board of Directors of the Corporation. Likewise, it is not compulsory that an American citizen holds one of the three compulsory corporate offices: Secretary, Treasurer or Chairman.
In the U.S. corporate system there is no obligation to subscribe and deposit a minimum share capital. In fact, the capital of a company has more an accounting than legal function. When the shareholder of an American company pays money to that company's account or pays expenses on behalf of that company, it can be decided whether to consider such money as capital or as a loan to the company. The company must have an authorised capital (corresponding to the maximum number of shares that the company is authorised to issue). Authorised capital may also consist of shares without nominal value: this allows maximum flexibility and for this reason, in many cases, is the recommended form.
Another non-secondary advantage to take into account is the possibility of obtaining the E2 visa as an investor. Realising investment through a corporation is the easiest way to be able to prepare an investor visa application because the corporation is the preferred vehicle for realising the investment insofar as it creates a legal person in its own right, separate from the natural person.
The LLC has a corporate structure which is similar to the Italian limited liability company in some aspects. Quotas (so-called "Membership Interests") not shares are issued and there is only one level of administration (so-called "Managers") instead of two, namely the Director and Officer of the Corporation. The ways to set up an LLC are quite similar to those for a Corporation. An LLC is established by signing the articles of association, the content of which varies according to the State of establishment. The deed of incorporation is referred to as the "Certificate of Formation" in Delaware, while other states refer to the "Articles of Organisation". Establishment of the LLC may be executed by any of its partners or their representative, and the LLC can have a sole shareholder who may also be appointed after establishment of the Company itself. Although legally established from the time of filing the articles of association with the Secretary of State of the State chosen for establishment, the LLC can only operate when it has at least one partner. Partners of an LLC, like shareholders of a Corporation, are liable for the debts contracted by LLC within the maximum limit of the company's capital, even when there is a sole partner.
In many respects, the Limited Partnership is similar to a simple limited partnership. The limited partner benefits in that liability for business risks is limited to the share of capital contributed at the time the partnership is established. In return for this advantage, the Limited Partner waives the power to manage the company's day-to-day business activities. Conversely, the figure of the active partner (the so-called "General Partner") has all the powers of ordinary corporate affairs management and is liable to third parties for corporate debts with his/her entire personal assets. Although Limited Partnerships are often established for business activities of minor importance, it is still always advisable to draft an association agreement, the so-called "partnership agreement", which sets out the essential elements governing relationships between partners and the company itself, such as: duration, capital contributions, percentages of shareholders' participation in profits and losses, procedures for the admission of new partners, eventualities of dissolution, etc. It is also advisable that preparation of this document be entrusted to a lawyer. If there are no limited parters, the company will be a General Partnership, and all partners will be liable with their individual assets.
Of course, a foreign company that wants to operate in the United States can also use its own branch rather than establish an American company. In fact, certain types of companies (for example, financial institutions) tend to use branches because they make allow an organisation to remain more integrated with that of the parent company. However, there are some quite important disadvantages in wanting to operate in the United States with a branch rather than a subsidiary. First of all, the parent company will be directly liable for the actions of the branch according to U.S. law. Where U.S. judges consider that the activities carried out by the parent company through its branch are sufficiently "regular and systematic", they may be deemed to have general jurisdiction (so-called "personal jurisdiction"), with the consequence that the parent company may be subpoenaed in a U.S. court, running the risk of being held liable with all of its assets (and not just those in the United States) in the case of an unfavourable verdict. Secondly, a foreign company operating through its branch in the United States will be directly subject to the tax jurisdiction of the United States ("IRS") and the States in which it operates, will have to submit a tax return and pay tax on income generated in the United States. What part of the total income of the foreign company is attributable to its American business is difficult to establish and the outcome of the audits of tax agencies is unpredictable.
The U.S. tax scheme pivots on federal, state and local taxation. Federal taxes should therefore to be added to state taxes and those of some municipalities, such as that of the city of New York. Generally speaking, every natural or legal person that produces, sells goods or services or is a member of a Partnership or Limited Liability Company is subject to the tax jurisdiction of the United States.
Delaware is considered one of the most interesting and advantageous offshore destinations in the world.
Although frequently used for the registration of boats, automobiles and real estate purchases, Delaware companies are not allowed to carry out billing in Europe (requalification risk) but still represent an excellent way to obtain a Green Card for living and working permanently in the United States. To become a true American citizen, it is necessary to have held a green card for at least 5 years and apply for naturalisation.
|Average start-up times||
|Availability of pre-established (ready-made) companies||Si|
|Published information about the company's directors||
There is no public register of corporate positions.
|Accounting obligations||No obligation|
|Legislation and controls||
The Delaware Secretary of State is the reference authority and companies are regulated under the "Delaware Corporation and Business Law"
|Confidentiality||Bearer shares are not permitted|
|Risk indicators||Average political risk: 12%