Research on the type of business in the USA

Not only to choose the right one for you but also to better understand your partner. For the Indian business to come to the USA for the first time, the most suitable state to set a company or branch is Delaware. Through a brief overview of the following types of businesses in the United States, it can be seen that a relationship with a sole proprietorship or partnership can be more risky than with a joint stock company or limited liability company.

Sole Proprietorship

Usually, you just need to fill out an application form at a stationery store and send it to your state or county registrar. Depending on state and state regulations, you may be required to submit multiple copies and/or obtain a signature certificate. With the application, you must pay a small registration fee, usually by cashier’s check or money order.

The primary purpose of registration is to help interested persons find people doing business by name other than their own. The business owner has full discretion and unlimited liability (with his/her personal property) for all business-related matters. At the end of the year, the profit or loss in the business will be included in the income of the business owner to pay personal income tax.


A joint stock company is a more formal type of company or incorporate company in USA. The leading large enterprises in the United States are all joint stock companies. A joint stock company is an independent legal entity that can continue to operate even if the owner no longer exists. Ownership of a joint stock company is transferable to another person. Businesses in this category can sell shares to raise capital, and the business owner is not personally liable for legal judgments.

A main joint stock company’s primary qualities are:

  • Limited number of shareholders and shareholders must be US citizens;
  • Shareholders and directors must be individuals, not legal entities;
  • Limited liability like a normal joint stock company;
  • They don’t need to pay corporate tax. The profit or loss of the company divided by the company owner is included in the income of these people to pay personal income tax (business owners avoid double taxation including dividends and personal income tax);
  • Financial settlement according to the calendar year;

Limited Liability Company

A limited liability company is a combination of a joint stock company and a partnership. The limited liability company has become a very popular business type in recent years in the United States. Like a joint stock company, a limited liability company exists legally independently of the owner; Owners and managers are not personally responsible for the debts and obligations of the company. Just like a partnership or small joint stock company, a limited liability company does not pay corporate income tax and just need to obtain an ITIN number, but the profit or loss of the company divided among the owners is included in the income of these people to pay personal income tax. The name of the limited liability company must end with: LLC., LLC or Limited Liability Company.

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