Choosing the legal form of the company – commercial law in the USA?

If any company owner (Corporation – shareholder / LLC – shareholder) is not a US citizen, you can choose one of two forms of running the company:

  • Corporation (Joint Stock Company)
  • often referred to as C-Corporation or Ordinary
  • LLC (limited liability company)

If you’ve ever heard the name S-Corporation, then with this company model, all shareholders must be US citizens.

In the United States, there is no limit to the maximum number of owners of a joint stock company or LLC, which countries they come from, and whether they are individuals or companies.

DBA (Doing Business As)

It is the equivalent of our Indian sole proprietorship. The owner of the company is responsible with his person and property for all liabilities. All business income is added to his private tax return. If a company requires two owners, a so-called “General Partnership” opens, which is the equivalent of an Indian civil law partnership. It can only be operated by US citizens or residents.

Corporation (also as C-Corporation)

A corporation is the equivalent of a joint-stock company that protects the owner and protects him from personal liability against the company’s obligations. If you associate an incorporate company in USA, this is what this form is. It is a separate legal entity, it can purchase real estate, sign contracts, sue and be sued, completely independent of its owners.

The Corporation can raise money much easier by selling shares. Corporation property may be transferred along with the securities. The time of the company’s operation is unlimited, it can exist regardless of who is its owner. Tax protection is also important. We can deduct business costs and health insurance from the tax.


After the company is registered as an American Corporation, we can establish a model and transform it into the S-Corporation. We do this by establishing and filling in the appropriate documents. After performing the activities and establishing the S-Corporation, the company settles the tax exactly as the DBA described above. For this reason, the company’s income is “passed on” to shareholders for tax settlement.

LLC – Limited Liability Company (Limited Liability Company)

Limited Liability Company is a hybrid of a Corporation and a DBA. It requires uncomplicated management and transfers the proceeds for taxation to shareholders. This is a relatively new form of business. It can be run in all 50 states of America.

As with Corporation, LLC is an independent legal entity. Contrary to it, however, we are not dealing with actions and so many formalities. LLC owners are called shareholders, not shareholders. To put it simply, LLC is similar to a Corporation in the way it operates, but it does not require so many formalities and is not so complicated in terms of taxation.

LLC activity is based on one main document – “Operating Agreement”. It is a type of company agreement that regulates its activities. The content of the document may be changed along with the development of the business. Running a limited liability company in the US is less complicated than in a joint stock company. cfo services for small business also help people to manage the financial status of their company. It usually requires one general meeting of shareholders per year during which strategic decisions are made.



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