Investors outside the United States can choose a variety of corporate forms to do business in the United States. The main forms are: companies, American subsidiaries of non-American companies, branches of non-American companies in the United States, limited liability companies (LLC), partnerships, unlimited partnerships, limited partnerships and limited partnerships. A joint venture is a commercial enterprise established by two or more unrelated enterprises with the same investment. A joint venture may take the form of a company, a limited liability company or a partnership. Individual investment or husband-and-wife investment can take another mode, namely "individual enterprise".
2, the main problems to be considered when choosing the enterprise form.
The most important factors that need to be considered when choosing the enterprise form are as follows: limited liability (that is, to what extent the individual liability of investors for debts, taxes and other liabilities of the new American entity should be limited so that creditors can only claim compensation from the assets of the American entity), management and control, capital and credit requirements, tax considerations, difficulty in organization and operation, transferability of ownership and continuity of existence.
3. Company
Companies are the most commonly used form for foreign investors to establish business entities in the United States. The company has the following two modes:
Set up a new company (or acquire an existing American company) in the United States. If the owner of this new American company is another non-American company, then this American company is called an American subsidiary of a non-American company.
Set up branches of non-American companies in the United States. In this case, non-American companies are still doing business in the United States. From the perspective of company law, no new legal entity has been formed. But from the perspective of American tax law, the branch is an independent taxpayer.
B. nature American company is a legal entity established according to the laws of one of the fifty states in the United States, and it is also a legal existence form independent of its owners, controllers, managers and operators. The company signs contracts, purchases, holds and transfers property in the name of the company; The company is an independent taxpayer; The company is responsible for its debts and other responsibilities; And can file a lawsuit or be sued in the name of the company. A company issues shares to investors who contribute capital or other assets (that is, capital or owners' investment funds), and then the company uses these capitals to conduct business. When the company is liquidated, shareholders have the right to share the dividends distributed by the company and recover all the remaining assets of the company after paying off all debts.
C. limited liability. The main reason why most commercial entities take the form of companies is to limit the personal liability of company owners for corporate debts, taxes and other responsibilities. Generally speaking, the shareholders of a company are not personally liable for the debts of the company, so their liability is usually limited to the amount of capital they have invested in the company to obtain shares in the company. Exception: Although not common, in some cases, the company owner is responsible for the company's debts, which is called "unveiling the company". This exception may occur in the following situations, such as: the owner of the company fails to comply with the form of establishment of the company or fails to maintain the independent existence of the company; Or in the case of fraud or improper transactions with creditors, the company's capital (owner's money) is far less than its debt funds (borrowed money), also known as "weak capital". At the same time, some special laws also stipulate that some individuals are personally liable for specific corporate debts. For example, in some cases, company managers are obliged to withhold federal income tax from employees' wages. If the administrator fails to withhold and remit it to the tax authorities as required, he shall be responsible to the US tax authorities.
D. Other main features. The management of the company is concentrated in the board of directors. The board of directors is elected by shareholders and is responsible for formulating the company's policies. The management personnel of the company are appointed by the board of directors and are responsible for the daily operation of the company.
The ownership of the company takes the form of shares. Shares are usually freely transferable unless the shareholders agree. However, the way in which stocks are sold, issued or transferred to the public through advertisements shall be governed by federal and state securities laws.
Unless otherwise stipulated in the company's articles of association, the company is sustainable and permanent. The change of shareholders of the company will not affect the company's situation. Insolvency, incapacity or death of the shareholders of the company will not lead to the dissolution of the company.
E. The company is incorporated in the United States, and the company (or other private legal entity) must be established according to the laws of one of the fifty states. Every state has its own laws. Although each state has different regulations on details (these details are sometimes important). But the overall structure of these laws is similar in essence. The three favorite states for foreign companies to set up companies in the United States are California, Delaware and New York. The reason is that there are many court decisions to interpret the law, which makes the bills and guidance of these three States more flexible. As far as California and new york are concerned, another reason lies in their importance as American business centers. The state company laws are all-encompassing, involving all aspects of the company's internal operation, such as the statutory minimum number of shareholders, the authority of directors, the number and appointment of managers, and the minimum capital. However, the company law often uses general and permissive terms in its wording, so that the company's operation is subject to government intervention as little as possible. Compared with other countries, the procedure of setting up a new company in the United States is time-saving, money-saving and relatively informal. The process of establishing a company can usually be completed in 2 to 5 days. The following describes the procedures for companies in California, Delaware and New York.
F. company registration certificate. The registered company shall submit the registration documents to the relevant state government (usually the office of the secretary of state of a state).
Certificate (in some States, this document is also called "Articles of Association" and sometimes informally "Articles of Association"). American lawyers of investors are usually responsible for drafting the company registration certificate after consultation with investors. The lawyer also serves as one of the formal and temporary "founders of the company" in order to submit the company certificate to the office of the Secretary of State. In addition to other provisions, the company registration certificate must usually include the following contents:
G. company name. The selected company name shall not be similar to other registered companies or pre-registered trademarks. It is suggested that American lawyers check the company name registration records through the computer to confirm the availability of the selected name, so as to avoid future troubles. The company name is very important to the company image and to let the public know the company's business scope. Investors choose natural, non-descriptive or distinctive names in order to obtain trademarks or service marks. States also have some other regulations on company names. The company name must include "company" or "limited company" or its abbreviation. At the same time, many States also stipulate that the company name must not contain some words such as "bank", "finance" and "insurance" unless approved by the relevant state departments.
Purpose. In the past, the purpose of establishing a company must be clear. But now, California and New York, like most other states, allow a general description of the company's purpose. For example, according to the Company Law, "a company can engage in any legal activities or business", except for certain behaviors and activities that require special approval.
H. capital. The company registration certificate must specify the approved share capital and its explanation. Every company should have at least one voting "common stock", which is the most basic stock. Companies may also have "preferred shares". Compared with common stock, preferred stock has specific priority when paying dividends or liquidating the company. Common stock and preferred stock can also be divided into different categories, and different categories are also divided into different groups. Each class or group of stocks has its own specific voting rights and characteristics. These should be indicated in the registration certificate. The simplest and typical initial capital is just a kind of "common stock". California, Delaware and New York all have no minimum capital restrictions. Therefore, investors can only pay nominal capital to set up a company, such as $65,438+$0,000, which should be deposited into the company's initial bank account. Follow-up funds can be supplemented as needed. The company registration certificate should be drafted flexibly from the beginning, even if the capital is increased, it is not necessary to modify the registration certificate. Each stock must either have a specified "par value" (that is, the nominal benchmark price) or declare that it has no par value. The purchase of such shares should pay at least the prescribed par value. At present, the common practice is to specify the face value, such as $ 1 The amount paid by investors that exceeds the par value is called "premium" in the financial statements. For example, the company registration certificate stipulates that the company is authorized to issue no more than 65,438+000 ordinary shares at a price of $65,438+0 per share. In fact, the company will issue no more than 100 shares to the first batch of shareholders according to the amount agreed between the company (represented by the board of directors) and shareholders, provided that the amount paid is at least not lower than the par value.
Indicate the registered agent or address for service of documents. California and Delaware require companies to have a registered office address in the state to serve documents, and also require an agent to be appointed at that office address. Delaware stipulates that an agent can be an individual or any entity legally operating in the state. However, California stipulates that agents can only be individuals or companies registered in California or limited partners. The State of New York is not required to specify the office address and agent registered in the state, but the registration certificate of new york Company must specify the address inside and outside the state. Once the obligee delivers the documents to the Secretary of State, the Secretary of State can deliver the documents (such as litigation documents) to new york Company. In addition, the company can also designate an agent registered in new york to receive the service documents.
If registered in new york, the registration certificate should also indicate the county where the company office is located.
Other provisions can also be written into the registration certificate as required, for example, provisions that restrict directors from taking personal responsibility for the company or shareholders when they violate their duties and cause some damage to the company or shareholders.
Once the registration certificate is filed in the state secretary's office, the registration fee is paid and accepted by the state secretary's office, and the company officially becomes a legal entity.
1. Articles of Association. The articles of association are internal documents that stipulate the basic procedures of the company's internal operation. The adoption of the articles of association is a national law.
According to the requirements of the law, the articles of association should also comply with the provisions of the national company law. The articles of association generally include the following contents: the establishment and functions of the board of directors, the management personnel and their responsibilities, the procedures of the shareholders' meeting and the regular and special meetings of the board of directors, the determination of the accounting year, the procedures of share transfer and other basic matters of company management. Generally speaking, the articles of association of the company are adopted after the sponsors negotiate with the first investors. The Articles of Association may be amended by the general meeting of shareholders or the authorized board of directors.
J. The sponsors of the board of directors can appoint the first board of directors after consulting with the first batch of investors. There should be at least three directors, but in Delaware and New York, regardless of the number of shareholders, the company may have only one director. In California, if there is only one shareholder, the company can have only one director; If there are only two shareholders, the company may have only two directors; Otherwise, there should be at least three directors. Directors must be individuals, but there is no requirement that directors must be American citizens or permanent residents. The board of directors may be held in or outside the United States. Shareholders, employees or labor representatives are not required to participate. Shareholders have the right to appoint members of the board of directors on their own according to the applicable state company law and articles of association, and to remove directors with or without reasons. The term of office of directors usually ends at the next general meeting of shareholders, when shareholders elect (or re-elect) the next board of directors. In the United States, directors are generally not allowed to vote on the board of directors through authorized representatives or other directors. However, directors can participate in the board meeting by teleconference, all directors attend the meeting, or take company action by signing a written resolution unanimously adopted.
K. the directors organize the shareholders' meeting. After the appointment of the first board of directors, the directors shall hold an organizational meeting. The activities of this meeting include:
Appointment of administrative personnel. Usually, managers refer to the president, one or more vice presidents, financial personnel and staff. The supervisors or managers commonly used in many countries are not common in the United States. The executive has no requirements of American citizens or permanent residents. The board of directors has the right to replace administrative personnel. Usually, executives are appointed or reappointed at the annual meeting of the board of directors.
The length receives the stock subscription of the first shareholders. The board of directors has the right to issue shares. At the meeting of the board of directors, the first batch of shareholders' share subscription letters are usually received, and the issuance of shares and stock certificates is authorized as evidence that shareholders pay the subscription funds. The form of payment can be cash, property or services, or other forms that the board of directors thinks fit, as long as its value is at least equivalent to the face value of the shares. Minimum number of shareholders in California, Delaware and New York. One shareholder is enough. Shareholders can be individuals or other companies. Usually the shareholders are Americans or American companies or foreigners or foreign companies (but in a few specific fields, such as aviation, communication, power supply, transportation, specific mining, banking and insurance, some laws restrict the participation of foreign investors).
Authorized to open a bank account. After the resolution of the board of directors (usually the meeting of the board of directors), the company opens an initial bank account and designates the personnel authorized to use the account for commercial operation. Under normal circumstances, the selected bank will have some specific resolution forms that need to be passed by the board of directors, but the forms can be modified as needed.
Records, files and account books.
Meter (short for meter)) company meeting minutes. Record all resolutions passed by the shareholders' meeting and the board of directors in formal written form to prove the company.
Legal independence is crucial. Minutes of meetings are usually kept by company employees or legal advisers. Shareholders' meetings and board meetings should be held on time, that is, according to national laws, at least once a year.
Stock register The issuance, withdrawal and transfer of all shares shall be recorded in the stock register. Stock transfer is usually evidenced by a stock certificate indicating the number of shares held.
O. company seal. Although there is no provision in the Company Law, it is customary for companies to use seals frequently. Third parties dealing with companies, such as banks, usually require companies to use seals. The company's legal counsel is usually responsible for keeping the above records and seals.
Federal tax number. The first step that the new company must take is to obtain the federal tax identification number (also known as the employer number) from the US Federal Taxation Bureau. The lawyer in charge of forming the company will fill in the form and should know how to get the tax number in the fastest way.
Page (abbreviation of page) books and other records. American companies can usually decide to keep all kinds of documents and records of daily operations, such as accounting books, invoices, receipts, etc. However, in practice, companies should keep formal accounting books, normal invoices and receipts, and business records, so that federal, state and local tax authorities can conduct audits. The Company shall employ an accountant to assist in handling the above affairs and tax returns, or an external independent certified public accounting firm according to the company's business volume.
Q: Open a bank account. Companies can explore the establishment of various appropriate banking relationships, including opening checking accounts for different purposes, future capital needs and the needs of international trade. Once the company is established, it should open a bank checking account in order to deposit the stock subscription money and other funds paid by the first shareholders. The company shall submit to the bank a copy of the resolution of the board of directors (for limited liability companies or partnerships or other authorized institutions) and its signatory, a card with the signatory's signature in the format provided by the bank, the company's federal tax identification number and other information about shareholders (or members or partners) required by the bank, so that the bank can confirm the ownership of the company, its owner and its related businesses. In fact, because American federal law requires banks to "know their customers", the information that banks should provide to companies is becoming more and more strict.
R. tax returns. In addition to filing the federal income tax, the company must also submit the annual tax statement of the state where the company was established. If applicable, local income tax should also be declared. No matter how much, the company must pay the minimum state tax and franchise fee every year, but the amount stipulated by each state is different. In addition, if any American company has at least one foreign shareholder who owns 25% or more directly or indirectly (in the form of voting or real value) at any time in the tax year, and there are transactions that should be reported according to the following provisions, the company should fill in the annual report on Form 5472 at the same time of reporting the US federal income tax. The report includes the reporting company and its foreign shareholders who directly or indirectly own more than 25% of the shares of the company, and also records the transactions between the company and its shareholders who directly or indirectly own 50% or more of the shares and the relevant personnel of the reporting company. Reportable transactions usually include sales and purchases of inventories, other tangible assets and intangible assets; Rent and royalties; Commission and interest on income and expenses; And loan funds.
Nan's qualification to do business in other states. When a company is established in a certain state (such as California, Delaware and New York), it can only engage in business activities in that state. If a company wants to do business in other states of the United States, it must apply to these states as a "foreign company". The "foreign country" here refers to the establishment of a company in another legal jurisdiction (including another state or other country in the United States). In order to enable a company to be qualified to engage in business activities according to the company law of a certain state, or to enable a company to declare and pay taxes according to the provisions of that state, legal counsel should provide legal advice on what will be regarded as "engaging in business activities". Company law and tax law have different standards for "engaging in business activities". According to the degree of communication between companies and countries, different standards will produce different results. To apply for business activities in other states, an application fee must be paid, and residents of that state must be designated as agents to receive and serve legal documents, and the company should also declare and pay taxes to that state. If the company fails to obtain the qualification to engage in business activities in another state as required, the company will not be able to exercise its contract and other rights in that state and may be punished.
T. a company whose shares are controlled by a few people. A company whose shares are controlled by a few people is a common form of company with only a few shareholders. The company laws of some states have a special chapter on companies whose shares are controlled by a few people, which usually allows companies to enjoy great flexibility in management structure. For example, in some cases, there can be no board of directors and shareholders can directly manage the company. Regarding companies whose shares are controlled by a few people, there are other provisions in this chapter, such as methods to resolve disputes or deadlock between shareholders.
American branch of a non-American company. After a non-American company sets up a branch, it actually has the qualification to engage in business activities in the state. Generally speaking, non-American companies that set up branches can engage in the same activities under the same conditions as subsidiaries established under the laws of the state. As far as the responsibility of non-American companies is concerned, non-American companies should bear legal responsibility for claims, lawsuits and direct obligations arising from the actions and business of their American branches. In contrast, if a non-American company sets up a subsidiary in the United States, the non-American company is not responsible for the behavior and business of its American subsidiary in most cases. For this reason, most foreign investors tend to choose American subsidiaries instead of American subsidiaries to engage in business activities in the United States. Taxation is also a very important consideration when choosing whether to engage in business activities in the United States in the form of subsidiaries or branches.
4. Limited liability company
A limited liability company is an unincorporated business entity established under the laws of one of the fifty states in the United States. Usually there must be two or more owners, called "members"; But in some states, such as California, Delaware and new york, a person can also set up a limited liability company. Members of a limited liability company may be individuals or entities, including Americans and foreigners. There is no upper limit on the number of members of a limited liability company. Limited liability company is a relatively new company model stipulated by American state laws, and it has become a popular form of ownership in a short time.
5. Partnership
A. A partnership is established by two or more people through a contract, that is, a partnership agreement. Partners can be individuals or any type of entity, American or foreign. In the United States, partnerships are established according to the laws of a state. The laws of each state are very similar, but they are different in details. When drafting a partnership agreement, we should not only pay attention to the issue of consultation and consent, but also consider the federal and state tax regulations. Although the oral partnership agreement can have legal effect as long as it contains all aspects of the legal requirements of the host country. The author still suggests that partners sign a written partnership meeting, especially drafted by American lawyers, and attach relevant partnership laws and tax law suggestions.
B the partnership agreement shall at least include the following contents: contribution to the partnership (with what property should each partner contribute to the partnership? How much is the investment? When can I ask my partner for additional funds? ); Valuation of paid assets, how to distribute profits and losses among partners, when and how partners quit the partnership, whether and when partners should be paid for their services or funds provided to the partnership, and how to deal with ownership changes. Generally speaking, a partnership has a duration. Unless otherwise agreed in the partnership agreement, if a partner dies or withdraws from the partnership, the partnership enterprise shall be terminated. This is in sharp contrast to the indefinite existence of the company. Moreover, according to the laws of most States, no matter what the partnership agreement stipulates, the bankruptcy of the partners or the bankruptcy of the partnership itself will lead to the dissolution of the partnership. Partnership enterprises can be divided into three types: unlimited partnership, limited partnership and limited partnership.
C. unlimited partnership. Unlimited partnership is a combination of two or more unlimited partners to obtain commercial benefits.
6. Joint ventures
A joint venture is usually a special form of partnership, that is, a partnership with a specific project or purpose and a limited operating period. Each partner and "joint venture" can contribute funds, products and expertise according to their strength and technology, as well as their expectations for profit sharing and risk sharing. The main advantage of this joint venture model is that there is no formal constraint, which is conducive to the flexibility of the joint venture to share financial risks and benefit from the joint venture (the joint venture has the strength that neither party alone does). The joint venture agreement between the joint venturers shall usually stipulate the amount of capital contribution of the joint venturers' property or services, the purpose and duration of the joint venture, management methods, profit sharing and loss sharing methods, transfer or restriction of ownership, termination and dispute settlement methods, etc. As a temporary partnership, a joint venture shall be governed by the Partnership Law, and the joint venturers shall bear unlimited liability, and the Partnership Tax Law shall apply. Although any individual or entity can become a joint venture, a joint venture is usually established by two or more companies. Generally speaking, there is no special requirement that joint ventures must be American. Legalization of joint ventures is also feasible. If established, the joint venture company shall be governed by relevant state laws and have the characteristics of limited liability and corporate taxation.
7. Individual enterprises
Individual enterprise is an informal entity established and owned by a single individual (or husband and wife). The owner is personally liable for the debts and other responsibilities of the enterprise. Like other business forms, individual enterprises also need local business licenses and permits. Owners usually hold management positions. Ownership can be transferred. If the owner dies or loses his ability, the individual enterprise will be terminated. It is also easier for foreigners to start individual businesses. However, since the owner's assets of individual entrepreneurs may be used to pay off the company's debts and other liabilities, it will be more sensible to set up companies and limited liability companies if the business activities reach a certain level or there are any special liability risks.
8. Taxation
There are essential differences between "company" and "partnership" in American tax. The company is an independent tax entity and pays taxes according to its taxable income. When a company distributes dividends or other distributions to shareholders, shareholders must also pay taxes on their dividend income. This is the company's "double taxation". On the contrary, the partnership itself is not a taxpayer. The tax obligation of the partnership is "transferred" to the partner, making him the only taxpayer in the partnership. Companies that enjoy "partnership" tax treatment must declare federal and state taxes, but this application is for reference only. In this statement, the partnership shall state the income or loss of each partner, tax credit, etc. Partners should also declare these items in their personal income tax returns. Therefore, if a foreign company is a partner of an American company that enjoys the tax treatment of "partnership", the foreign company shall be subject to the tax laws of the United States and make tax returns in the United States.