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[Guide] How To Legally Start Your Business In The U.S.

Discussion in 'Business & Tax Advice' started by Zwielicht, Jul 13, 2015.

  1. Zwielicht

    Zwielicht Moderator Staff Member Moderator Jr. VIP

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    This is a post that I've wanted to create for a while now here on Black Hat World since I didn't find any specific information pertaining to legally starting a business when I first started (which involved a lot of running around between the city hall, my home, the county clerk, and the gas station.

    Before we start, this guide is for starting a sole proprietorship in the United States since I live here and I've been through the steps, although the steps are pretty much the same if you start an LLC; the FBN part will just be a little more complicated.


    Fictitious Business Name (FBN)
    An FBN is the name of your business. You're required to get one if you conduct business using a business name that doesn't include part or all of your real name (e.g., "Joan's SEO" and "Smith's SEO" would not need an FBN as these are the first and last name of the owner, but "Xetorv SEO" does since it doesn't have any part of the owner's name in it). If you live in the United States, you can obtain a fictitious business name for a sole proprietorship (this is simple to set up, although your business will not be a separate entity from yourself, which means you'll maintain full liability for your business) through your county clerk, which you can find by using Google Maps and typing in "county clerk of (insert your county name)".

    Once you've done that, you'll have to go through some newspaper publication nonsense for around 4 consecutive weeks, which usually ranges in price between $35 and $200 (it was $35 for me, but most are somewhere in-between). When that's done and over with, you either need to go back to the county clerk's office and finish the filing process or let the newspapers handle it (again, I got this done with the same $35 fee).

    Employer-Identification Number (EIN)
    The purpose of an EIN is to allow the IRS to track wages and payments from your business, although it's also useful for using in place of your SSN if one of your clients hands you a W-9 form. You can actually get this before the FBN if you want, although the order doesn't matter much and depends on when you need it. The process is actually fairly simple and doesn't take long to complete (30 minutes to an hour). It can also be completed entirely online through the IRS website, where you'll receive your EIN immediately after.

    Home Occupation Permits (HOP)
    Now it's time to apply for a home occupation permit (if you don't have an office). Contrary to what you may think, even if you don't do business directly from your home, you'll need to apply for a home occupation permit as this permit allows you to accept self-employment income coming into your home.

    Before you apply, you'll need to pick up the registration forms from your city hall or their website, fill out the forms, and ensure that you do not have to get approval from your Home Owners Association.

    Now, the process of receiving a home occupation permit is simple for Internet-based businesses as our equipment usually doesn't use up that much space (a laptop at the minimum). The city will send someone down to your residence who will ask to see where you'll be conducting business (if it's a computer, show them the room where the computer is at. If its a laptop, point to the laptop), they'll approve you, give sign off on your HOP, and then you'll need to make one more trip to the city hall.

    Business License
    We're almost done. When you've received your FBN, EIN, and Home Occupation Permit, you'll have to make a trip to your city hall to find out if you need a business license to conduct business in the area and accept transactions (you'll more than likely need it, and I'll explain why in the Home Occupation Permits section). This is usually handed to you on the spot and costed me around $35 (although the prices vary between businesses and cities).

    Once you've completed all of the steps above, you'll have officially have a registered business, which you can use to show prospects and clients that you are taking what you do seriously, which is great trust factor when you're starting out.
     
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    Last edited: Jul 13, 2015
  2. V

    V Elite Member

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    Thanks for the share mate :) Gonna come in handy, my friend is thinking to setup a company in US.
     
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  3. soccerlover

    soccerlover Jr. VIP Jr. VIP

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    Thanks for your efforts :)
    It will help our colleagues a lot.
     
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  4. netcelal

    netcelal Senior Member

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    Hi, thank you for the infos..
    i want to start a Deleware LLC soon..do you have some insider tipps for non resident EU Citizen ?
    I know that i have to visit USA for US Bank account...Is there any ways to creating a Bank Account without visiting the US ?

    Thank you
     
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  5. patrickthomas

    patrickthomas Junior Member

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    Thanks for this great info buddy Indeed a nice share for the community.
     
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  6. letstrade

    letstrade Newbie

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    What if any would you say are the best states to file a corp in? With regard to taxes and such.
     
  7. Zwielicht

    Zwielicht Moderator Staff Member Moderator Jr. VIP

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    I'm not an expert on setting up corporations, although I've heard of some people setting up their LLC in states like Wyoming, Delaware, and Nevada because of their purported "liability benefits" and reduced annual fees (I live in California, and LLC's need to pay $800 a year in addition to their state an federal taxes).
     
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  8. Ramse

    Ramse Jr. VIP Jr. VIP Premium Member

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    Thank you for sharing this guide.
     
  9. punkstar69

    punkstar69 Junior Member

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    Thanks for your useful information OP.

    I run into EXACTLY the same situation. I currently operate a UK based company. I live in EU and noone can guarantee to open a US company with US bank account. The only available option seems to be opening an US company and having an offshore-country bank account (Cyprus etc).

    Any ideas/suggestions? :)
    As you can understand, our point is to reduce tax, as much as we will LEGALLY be able to reduce it (Delaware-based LCC, Wyoming etc)
     
  10. ja1myn

    ja1myn Senior Member

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    You pay $800 a year just to renew the LLC? Damn. My GA LLC only costs like $100 (maybe less, can't remember) to renew each year.
     
  11. Zwielicht

    Zwielicht Moderator Staff Member Moderator Jr. VIP

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    I'm not certain about this as I know less about LLCs than I do about sole proprietorships (and I know even less about non-residents registering U.S-based businesses), although I believe that you would be able to get an L-1 or an E-2 visa, which would allow you to open a U.S-based branch of your business as well as possibly getting a U.S bank account. I'll uodate this post if I find any more information about how you can procure a U.S bank account as a non-resident. :)

    Yeah, in California, the annual LLC tax is a minimum of $800, which you have to pay even if you make a loss.
     
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    Last edited: Jul 15, 2015
  12. Nerzhul

    Nerzhul Newbie

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    Whew the rates in CA are kinda high, but I still want to see what I can do. Thank you so much for this!
     
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  13. Advancing

    Advancing Newbie

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    I'm in California set up as a sole-p. I'm switching to s-corp beginning of next year. $800 sounds like a lot, but I think it's well worth the protection.
     
  14. LoftPower

    LoftPower Elite Member

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    Great info. Wonderful post with useful information.