top of page

Frequently Asked Questions and Answers for Registering a US Company (Part 2)

Q9. What are the steps to establish a US company that can sell on e-commerce platforms?

 

 

As shown in the figure, the establishment of a US company capable of online sales generally requires the following steps:

1. Determine the company's type and business method

Before establishing a company, e-commerce operators should determine whether the type of company is a joint-stock company (C-Corporation) or a limited liability company (LLC) based on the actual situation. The respective advantages and disadvantages of these two types of companies are detailed in Q3.

2. Apply to register a US company

After determining the type of company, the company owner needs to submit a formal application to the Secretary of State's Office, fill in the relevant registration information and pay the application fee. Generally, it takes 10-15 working days to get the company registration certificate from the date of submitting all the required materials. If necessary, you can apply for rush. See Q10 for details.

3. Apply for an Individual Tax Number (ITIN) for Foreigners

Individual cross-border e-commerce operators, as a shareholder of a U.S. e-commerce company, need to declare personal income tax in the U.S. for the profits obtained from the company. To this end, cross-border e-commerce operators need to apply for an Individual Tax Number (ITIN) for foreigners. In addition, when U.S. e-commerce companies apply for a federal tax number, they also need to provide the person in charge's personal tax number. To apply for a foreigner’s personal tax return number, the applicant’s original passport must be submitted.

4. Apply for a Federal Tax Number (EIN)

After obtaining the official company registration certificate, the company needs to apply to the Internal Revenue Service (IRS) for a federal tax number as the identification number for the company to pay taxes. After submitting complete application materials as required, the company can obtain a federal tax number for free, laying the foundation for opening a company bank account. See Q11 for details.

5. Open a company bank account

Most banks in the United States require the actual controller of the company to visit the bank to verify their identity when opening an account. Due to the current inconvenience of personnel exchanges between China and the United States, this is not possible in most cases. This problem can be solved by the client entrusting relatives and friends in the United States to open an account as a company director or executive at the bank, and then resign as a director or executive after the account is opened. If the customer does not have relatives or friends in the United States, we can also assist in the selection of relevant candidates (the customer needs to pay certain remuneration to the selected person). We will assist customers to strictly screen the credit and background information of relevant personnel, and restrict the behavior of relevant personnel by agreeing on high liquidated damages. At the same time, during the account opening process, we will accompany the customer to choose or assist in the selection of personnel throughout the entire process. After the account opening is completed, all account opening materials will be kept by us on behalf of the customer and transferred to the customer at an appropriate time.

6. Apply for sales permit

In California, for example, even if it only conducts online sales without offline physical sales, the company still needs to apply for a sales license. After submitting complete application materials as required, no application fee is required to obtain a sales permit. If the product being sold requires a special license, you also need to apply for a special sales license. See Q11 for details.

7. Make online sales

After the company obtains the sales license, it can register and sell products on the relevant e-commerce platform.

 

Q10. What information is required to register a US company? How long will it take?

U.S. companies need to submit an application in the state where the company is established. Each state has slightly different regulations for company incorporation.

 

 

 

It usually takes 10-15 working days to get the company registration certificate from the date of submitting all the required materials. If necessary, you can apply for an expedited application.

 

 

Q11. After the company registration is completed, what registration or permits need to be processed before it can operate normally? What information do I need to provide?

After the company is registered, it needs to go through some follow-up registrations and applications to be able to operate normally, usually including the following:

1. Federal Tax Number (EIN)

EIN refers to the unique identification number issued to U.S. companies by the IRS. Both the establishment of a joint-stock company and a limited liability company need to apply for EIN as the company's identification number. In addition to tax filing, the company’s EIN is required to open a bank account and apply for various permits and licenses. The materials required to apply for EIN mainly include:

(1) Company name, address, specific scope of business, date of establishment, and place of establishment;

(2) The name and tax filing number of the person in charge of the company;

(3) The company's estimated number of employees and total wages in the next 12 months;

(4) Other tax declaration information of the company.

2.Seller's Permit

In California, you need to apply for a sales permit to sell or lease tangible goods. Internet sales are the same as other sales methods. Unless specific tax exemption clauses apply, they all need to apply for a license and pay sales tax. The main materials required to apply for a sales license are:

(1) The company's registered name, address, registration number, date of establishment and contact information;

(2) Company EIN;

(3) The company's business scope, website, and whether to conduct online sales;

(4) Estimated company's monthly turnover and taxation;

(5) Applicant's name, position and personal information;

(6) Company bank account information.

3. Other special permits or licenses

Some special sales, such as the sale of cigarettes and tobacco products in retail, the sale or lease of electronic equipment, the sale of replacement lead-acid batteries, and the purchase of goods from abroad and use in California, also require corresponding permits or licenses.

The main areas that need to apply for special permits or licenses are:

(1) Sale of alcoholic beverages;

(2) Sell tire products and accessories;

(3) Sell or lease electronic equipment, sell replacement lead-acid batteries, etc.;

(4) Sell cigarettes and tobacco products through retail.

 

Q12. If the company does not carry out business after establishment, do I need to submit annual reports and tax returns?

After the establishment of the company, regardless of whether it is engaged in business, it needs to submit an annual report (Statement of Information) and tax returns according to the regulations of the local government every year or every two years. Even if the company is not doing business or making a profit, most states still require the company to pay a minimum tax or annual license fee. California currently charges a minimum franchise tax of $800 per year for all C-Corporation and LLC.

bottom of page