TAX ACCOUNTANTS & ADVISOR

CELL: 917-294-8833

BUSINESS REGISTRATION

1. The advantages of establishing a company/Business Benefits

  1. Limited Responsibilities (Limited Responsibilities): The main advantage of establishing a company is the separation of company and individual responsibilities. The shareholder has limited liability to the company, but the shareholder's liability to the company is limited to his investment in the company. If it is a self-employed person, personal property, such as personal real estate, cars and all real estate may be involved in the company's debts to repay the company's debts. As a shareholder of a company, your personal property will not be implicated by your company's debts. On the other hand, the company as an entity has the same rights as individuals. A company can own its own property, operate a business, assume debts, and sue.

  2. Unlimited Life: The life of the company is unlimited. Even if the shareholders leave or die. The form of the enterprise or company changes, and the company exists until it is dissolved.

  3. Easier to raise funds: U.S. companies have no foreign exchange controls, capital flows in and out freely, and companies have a better ability to raise funds. This will allow your business to grow and develop better. The company can obtain financing from the bank or issue stocks. One of the major advantages of raising equity and issuing shares is that the equity does not have to be repaid or interest.

  4. Expend Company Business: American companies have a good business infrastructure, so a formally registered company feels more stable and safer than an unregistered private company. If you are a contractor, you will find that some companies only do business with officially incorporated companies. Establishing a company in the United States can increase the credibility and competitiveness of the company. Conducive to market promotion. Especially at present, the Chinese mainland's economy is developing rapidly and the global economy is integrated. Companies in mainland China are more willing to do business with companies registered in the United States. Domestic consumers are also more willing to buy products from American companies.

  5. Easier visa to come to the United States (Various US Visa Option): Sending an invitation letter to a U.S. company will help Chinese people apply for passports and visas; registering a company in the U.S. will help you obtain various business and work visas; if a U.S. company is a year later It still exists. You can apply for a residence card to the U.S. official through a lawyer to achieve immigration purposes.

2. What are the conditions for business registration?

  1. Anyone can set up a company in the United States. Registering a company does not require a U.S. identity. Some Chinese have no identity in the U.S., in order to do business. They ask someone with identity to come forward and set up a company. Actually, it’s not necessary to do so, because The establishment of a company does not require a U.S. identity. In addition, people living abroad can also apply for the establishment of a company in the U.S. Anyone in the world can register a company in the U.S. wherever you are. Non-U.S. resident companies and U.S. resident companies The methods of operation and tax filing are the same. In recent years, China's economy has developed rapidly, and more and more domestic companies have set up branches in the United States to develop overseas business. Domestic companies often send one or two senior managers to take charge of the United States branch. The company's business. This person in charge can obtain a multinational company manager visa (L-1), and then apply for a green card.

  2. There are many Chinese in the United States who have an (H-1B) visa and can also form a company, but your role is just an investor, a shareholder, and you cannot work for this company and receive salary. You can only work for the company that guarantees your work visa Work. You can assign a CEO or manager to manage the company.

3. What information is required to register a business?

  1. Generally speaking, one person (or more) can set up a company.

  2. The social security number (Social Security Number) or tax number (ITIN #) of the person who established the company

  3. Company registered address: You can use the company's business address or home address, but not an email address.

  4. The company name cannot be the same as (the state where the company was established) other existing company names.

4. Type of Business

  1. Most small or growing companies start from a general company limited by shares (C Corporation). Here are five basic types of companies for reference:

    • Self-employed (Sole Proprietorship)

    • C Corporation

    • S Corporation

    • Limited Liability Company (LLC)

    • Non-For-Profit Corporation (Non-For-Profit Corporation)

  2. Comparison of company types: C-type limited liability company is a taxable entity. Limited liability companies (LLC) and self-employed individuals are not taxable entities themselves. Income is transferred to the owner through the company, and the shareholder’s personal income tax is levied.

5. Understanding of Tax Liability

  1. As an employer, you must understand your tax responsibilities, abide by various tax laws, file taxes on time, and pay taxes specifically as follows:

    1. Corporation Income Taxes: (Corporate Income Taxes) declared once a year. Use your company's gross income for a year minus all expenses. This is your company's net income or loss for a year. If you lose money, you don't need to pay federal taxes, but you have to pay the state Government or municipal maintenance tax. What kind of expenses can be deducted as company expenses? Your expenses must meet the following four basic conditions:

      • Cost must be normal

      • Expenses must be necessary for business

      • Expenses that are not extravagant, these costs generally include: state registration company fees, filing fees and license fees, market research, advertising, attorney fees, billing, consulting fees, employee salaries, labor taxes, taxes, office facilities, telephone, Internet, Utility bills, etc...

    2. Sales Taxes are declared once a quarter. Sales tax is a tax levied by state governments on sales of products or goods. If you provide services to customers, it will generally not be the object of sales tax collection. Sales tax is neither your income It's not your expenses, but you, as an employer, help the state government to collect from your customers. With the quarterly sales tax form submitted to the state government. So, no matter whether you set up a company or not, there are There is no profit, as long as there is sales, sales tax must be paid to the state government.

    3. Payroll Taxes are declared once a quarter and once a year w-2/w-3.

  2. If you hire employees, you must first purchase labor insurance and then pay salary tax in accordance with the employment tax law. The government requires every boss to withdraw or pay federal, state, city, and social security taxes on behalf of employees. The IRS collects and pays from employers and Employee social security tax is levied on both sides. Employer and employee each pay 6.2% social security tax. The maximum salary for employees in 2009 is $10,6800. The medical insurance tax rate is 1.45%. There is no maximum limit.

  3. The difference between Form W-2 and Form 1099: There are two types of manual tax forms, one is Form W-2, which is a tax return for company employees, and the other is Form 1099. It is a tax return for independent workers, and Chinese people often Send 1099 to part-time or part-time workers. Actually, this is wrong. The fundamental difference between W-2 and Form 1099 is whether the boss has the right to control how employees work, not the length of time the workers work. Full-time or part-time. The boss decides to hire Of workers are employees or independent workers. However, they have to be reviewed by government agencies, such as the Internal Revenue Service, State Revenue Service, State Labor Bureau, Unemployment Compensation Insurance Agency, and Workers’ Compensation Insurance Agency. Once it is discovered that the employer has misclassified W-2 employees (misclassify) or 1099 independent workers. Employers will face heavy fines.

  4. These two forms are fundamentally different in taxation. If a worker gets a W-2, his tax liability will almost fall on the employer's shoulders. The employer will draw and pay the necessary employees from the employees' wages Income tax. These taxes include federal income tax, state income tax, social security tax and medical care tax. In addition, employers also pay the necessary employer tax, which has 7.65% of social security tax and medical care tax, federal unemployment tax and State unemployment tax. An independent worker is responsible for paying his own tax, even if he submits his own statement. The company can avoid the following responsibilities: the employer’s social security tax and medical care tax, the federal and state unemployment insurance taxes, and the state Disability insurance tax, workers' compensation expenses, and other taxes are paid.

6. After the establishment of the company, it is necessary to pay attention to the following accounting and tax issues:

  1. Separate personal accounts from company accounts: After the company is established, you must open a separate bank account. Treat the company as a completely separate entity from yourself. Public or public, private or private. Use company accounts to pay all company expenses, and private accounts to pay All private expenses. The two cannot be the same.

  2. Monthly bank statement: All the company's incoming and outgoing accounts should be taken from the company's bank account. Make a bank statement every month.

  3. Keep a good record of current accounts: Accounting is to use the language of accounting to organize the company's daily business activities. The basis is your daily business records. Such as sales invoices, accounts receivable, accounts payable. A question often asked by Chinese : What should I do with cash transactions? Do I need to file tax returns? In fact, the tax reporting method for cash transactions is the same as cheques. It's just that cash transactions are more difficult to track. You should also do a good job of daily accounting.