Setting up a company in the US and ensuring legal compliance is a complex process that requires careful planning and attention to detail; so don’t leave home without seeking expert advice!
GTM Global’s accredited legal and accounting partners Thorelli & Associates and International Management Solutions Inc. can provide you with critical guidance as to how you position your business for long-term success ‘across the pond’, and here’s a checklist to consider.
Intellectual Property Protection
Intellectual property (IP) protection is a critical consideration for any company, regardless of its size or industry. In the US, there are several different forms of IP protection, including patents, trademarks, copyrights, and trade secrets. Each form of protection provides different legal rights and benefits, and it’s important to understand which ones are most appropriate for your business. For example, patents can protect inventions and other novel ideas, while trademarks can protect your company’s name, logo, and other branding elements. Copyrights can protect creative works such as books, music, and artwork, while trade secrets can protect confidential information such as formulas, designs, and customer lists.
Choose a Business Structure
The most common business structures in the US are sole proprietorship, partnership, limited liability company (LLC), and corporation. Each structure has its own advantages and disadvantages, so it’s important to choose the one that best suits your needs. In the UK, the most common business structures are sole trader, partnership, and limited company. The main difference is that a limited company in the UK is similar to a corporation in the US, with its own legal identity and liability protection.
Filing Taxes
Filing taxes in the US can be a complex and challenging process, particularly when it comes to sales tax. Unlike value-added tax (VAT) systems used in many other countries, the US sales tax system is decentralised, with each state setting its own rules and rates. This means that there are thousands of different sales tax combinations to consider, each with its own unique rules and regulations. To complicate matters further, many states have different rules for when a business has “nexus,” or a physical presence, in the state. This can include having an office, warehouse, or sales representative in the state, or even selling a certain amount of products to customers within the state. If your business has nexus in a particular state, you will typically need to register with that state’s tax authorities and collect and remit sales tax on your sales within the state. Failure to comply with these rules can result in costly fines and penalties, so it’s important to stay on top of your tax obligations. In addition to sales tax, US businesses are also required to file annual federal and state tax returns with the IRS and state tax authorities. You may also need to pay estimated taxes throughout the year.
Register Your Business
Once you’ve chosen your business structure, you’ll need to register your business with the appropriate government agencies. In the US, this typically involves registering with the state where your business will be located and obtaining any necessary business licences and permits. You may also need to register for federal taxes with the Internal Revenue Service (IRS).
Obtain Business Insurance
In the US, business insurance is essential for protecting your company from liability and other risks. The most common types of business insurance in the US include general liability insurance, property insurance, and workers’ compensation insurance.
Comply with Employment Laws
If you plan to hire employees for your US-based company, it’s important to comply with all applicable employment laws. This includes laws related to minimum wage, overtime pay, workplace safety, and anti-discrimination. In the UK, employers must comply with similar employment laws, such as minimum wage and anti-discrimination laws. However, the specifics of these laws may differ from those in the US.
If you would like to know more and get 1-2-1 advice from Thorelli & Associates, International Management Solutions Inc, and other American in-country experts, check out our upcoming North American expansion workshops here.
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