Everything you need to know before you start your company in the United States

What is an LLC?

The LLC is a hybrid business entity form that combines corporation-style limited liability with partnership-style flexibility. The flexible management structure allows the owners to shape the LLC to meet the needs of the business. The owners of an LLC are "members" rather than shareholders. A member can be an individual, a corporation, a partnership, another limited liability company, or any other legal entity.

The company direction, or rules, are created in a contract called the Operating Agreement. Express the terms and rules in any way you want in the partnership agreement. This is the greatest benefit of an LLC compared to any other form of entity. It is called Freedom of contract.Its training document is called: Articles of Organization.

A general benefit of the LLC is the simplicity of its incorporation and permanent annual maintenance as the entity performs its duties.

Advantages of creating an LLC:

1. Protect your assets.
2. LLCs don't pay taxes, members do.
3. They can be created with a single member or several.
4. LLCs have fewer expenses for maintenance and administrative paperwork.
5. Flexibility, allowing foreigners and other companies to be members.

What is a CORP?

This type of company has a quite different model from LLCs, it is organized under a board of directors, these being shareholders, presidents, directors, secretaries, among others.

The Corporation also provides protection against the company's debts but pays taxes on its annual earnings. It is attractive because it can issue shares for anyone who wants to invest in the company in the future. It is similar to the "Sociedades Anónimas" in Spanish-speaking countries.

This is a more "conservative" type of company, being the oldest model of the company in the U.S. Follow some rules such as frequent meetings between shareholders, presentation of annual reports, and issuance of shares. It is even subject to state and federal taxes. Their addresses are governed by a document called: Bylaws. Your formation document is called: Articles of Incorporation.

In general, CORPs are the best option for companies that aim to go public.

Advantages of creating a CORP:

1. Permite formar líneas de crédito a nombre de la empresa.
2. Pagan sus propios impuestos, los propietarios no declaran ingresos corporativos a menos que la utilidad sea distribuida.
3. Soy muy atractivas para inversores, ya que estas podrán emitir acciones.
4. Ciudadanos extranjeros que no vivan en EUA, así como otras empresas americanas o extranjeras pueden ser propietarios de la CORP.