Many clients, faced with an increase in their business in the United States, decide to create a subsidiary in this country in order to facilitate business development, the hiring of local personnel and the movement of displaced persons and expatriates.
If we go to Google trying to find useful information to help us make our decisions in this regard, we find a lot of terms and possibilities that we do not handle: Corporation, LLS, LLP, Partnerships, etc.
No problem. It is normal, since we are faced with an unknown legal framework and with important differential nuances with ours, the one here, the one we know.
The objective of this article is to establish the existing parallelism between both systems as the best way to understand the new concepts and not err in decision making.
The main options we have to create a company in the United States would be the following:
- Create a Partnership.
- Create an LLC.
- Create a Corporation.
Let’s see the main differences between all of them.
Partnership, Limited Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP)
A Partnership is an agreement between several people to jointly develop an activity. The relationship between the partners is defined by a private contract between the parties (the partnership agreement) in which aspects such as the participation that each partner has in the association, the responsibility of each of them, the functions and how they are distributed are defined. profits and losses.
A partnership therefore has its own legal personality, but any of the partners can acquire obligations on behalf of the company and all the partners are jointly and severally liable with all their assets for the debts or obligations acquired by the company regardless of who has been the partner who created them.
They are created by means of a private contract without the participation and intervention of the state, which does not inhibit their obligation to pay taxes on the profits generated by the association. The American Tax Agency known as IRS (Internal Revenue Service) requires them to request the EIN (Employer Identification Number). We will have to request the activity license (Business Licenses) and register for tax purposes at the state level. The name with which you are going to act must also be registered at the state level and even, in some cases, at the municipal level.
They are regulated at the state level, not the federal level, through laws known as the Uniform Partnership Act (UPA).
Limited Liability Corporation (LLC)
LLCs would be seen to be the equivalent of our limited partnerships. That is, the partners are not responsible for the debts and/or obligations of the LLC. The partners of an LLC are known in English as “member” and can be both US citizens and foreigners with or without legal residence. Legal entities can also be partners in an LLC, which is why they are ideal for creating subsidiaries.
The legal obligations are minimal if, for example, we compare them with what a corporation should have.
For example, although it is advisable to have a contract between partners that defines the fundamental aspects regarding the management and operation of the LLC (LLC operating agreement), they are not obliged to do so.
They are also not required to keep a public record of partner meetings and the decisions made therein.
The company can be managed by the partners themselves or by professionals hired for this purpose.
From the tax point of view, there is a clear difference with respect to our SL and that is that the LLC does not pay taxes on the profits generated by the business, but these profits are applied directly and proportionally to each one of the partners, increasing their income on which the corresponding taxes will be applied.
When creating it, it must be taken into account that we have a general requirement at the federal level (for the whole country) that can be increased at the state level.
- You have to choose a name and you must register it. Each state may have its rules regarding what these names can be.
- A registered agent must be assigned. Registrar Agents are individuals with an official state level license that the state will use to communicate with the LLC. It would be like a “proxy to receive notifications”
- Register at the local office of the Secretary of State the deed of incorporation, which in this case is called “Articles of organization” or “certificate of formation” or “certificate of organization”. Unlike what happens in Spain, the intervention of any notary is not necessary to define the “articles of incorporation”
- The equivalent of our “status” would be the “operating egreement”. There is no explicit obligation to register it in the local office of the Secretary of State, but it must be kept internally since it will be enforceable in the event of a conflict between the partners.
- Registration at the tax level through the EIN (Empoyer identification number) that is identified with the CIF of the company, the federal ID number. LLC that has a single partner does not need an EIN and in this case you have directly given them a federal ID number.
- Request the activity license and the different permits that are required.
The great drawback of this figure: the departure of one of the partners will generate the dissolution of the LLC.
corporation
To finish making the simile, we could say that in some way, a corporation would come to be a Public Limited Company of ours, but in what sense?
The obligations before the American administration are much greater than those of the LLC.
It must have perfectly defined and public administrative bodies (board of directors) that would be the board of directors of a Spanish company.
By demanding a much clearer, more public and restrictive direction, they are the ideal vehicle to attract investors, buy and sell shares.
From the training point of view, they are much more demanding, as is the case with the SA in our country, although many of their obligations regarding the rules that regulate shareholder meetings, the publication of their minutes, etc., would be very similar to those of the Spanish SL.
There are different types of Corporations, such as the C-corporation, or the S-corporation. In C-corporations, there is what would be a “corporation tax” that records the profits of the company, while in S-corporations, the profit of the company goes directly to increasing the income of the shareholders via dividends with which that double taxation is avoided but they cannot have more than 100 shareholders. They would come, then, to be something similar to our SICAVs.
If you need more information about any immigration procedure, which visa corresponds to you or what may be your best option, at Visas Empresas we will be happy to help you with the process.
For any additional questions about visas, do not hesitate to contact us on our telephone number 91 847 87 30 or by email at consultas@visadosempresas.com
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