The Ultimate Guide to US Business Registration: Steps, Costs, and Legal Requirements

Starting a business in the United States is an exciting endeavor that offers access to one of the world’s largest and most dynamic markets. However, the process of US business registration can be complex if it is not approached correctly. This guide walks you through the essential steps, costs, and legal requirements to help you plan a smooth and compliant incorporation process.

Understanding US Business Registration

The term “US business registration” refers to the formal process of establishing a legal entity that is authorized to operate in the United States. In practice, this is done primarily at the state level (for example, by filing with a Secretary of State or equivalent office), followed by federal and state tax registrations.

Whether you are:

• An entrepreneur exploring how to set up a US corporation or LLC, or

• An international business expanding into the US market,

understanding the key elements of this process is critical.

Proper registration:

• Ensures compliance with local, state, and federal laws

• Protects owners through limited liability (for LLCs and corporations)

• Enables access to US banking services and payment processors

• Builds trust with customers, partners, investors, and regulators

Reference link:

• U.S. Small Business Administration – “Register your business”

Steps to Incorporate a Business in the United States

1. Choose a Business Structure

The first step is selecting the most appropriate legal structure for your business. The most common options are:

• Sole Proprietorship

• Partnership

• Limited Liability Company (LLC)

• Corporation (C-Corp or S-Corp)

Each structure has different implications in terms of:

• Taxation

• Liability protection

• Governance and formalities

For example:

• Corporations (C-Corps) are generally preferred for high-growth startups and businesses that plan to raise venture capital or go public.

• LLCs offer flexible management, pass-through taxation by default, and fewer formalities, making them a popular choice for small and closely held businesses.

• S-Corps provide pass-through taxation but have strict eligibility requirements (for example, usually only certain US individuals as shareholders and a limit on shareholder numbers), which often makes them unsuitable for foreign founders.

A brief professional consultation at this stage often prevents costly restructuring later.

2. Select a State

You must choose a state of formation. Popular options include:

• Delaware – widely used by startups and international structures for its business-friendly corporate law and sophisticated Court of Chancery.

• Nevada, Wyoming – often considered for their business-friendly regulations and privacy protections.

• The state where you actually operate – if your main physical operations, employees, or customers are concentrated in one state, it can be simpler and more cost-effective to incorporate there.

Each state has its own:

• Formation requirements

• Fee structure

• Annual reporting obligations

• Franchise or other business taxes

Note: If you incorporate in one state but physically operate in another, you may need to register as a “foreign” entity in the state where you do business. This adds extra costs and compliance, so the choice of state should be strategic, not automatic.

3. Register a Business Name

Your business name must comply with state naming rules and must be distinguishable from existing entities on the state registry.

Typical actions include:

• Conducting a name search in the state’s business database

• Ensuring you include required suffixes (e.g., “Inc.”, “Corp.”, “LLC”)

• Optionally checking trademark availability and suitable domain names

A clear, compliant, and memorable name supports both legal certainty and branding.

4. File Formation Documents

To legally create the entity, you must file the appropriate formation documents with the state authority:

• For corporations, this is usually called Articles of Incorporation or a Certificate of Incorporation.

• For LLCs, the equivalent document is typically Articles of Organization or a Certificate of Formation.

These documents generally include:

• Legal name of the company

• Principal office address

• Registered agent and registered office

• Purpose (broad or specific, depending on state practice)

• Share structure for corporations (number of authorized shares, par value, etc.)

• Names of initial directors (for corporations) or managers/members (for LLCs), where required

Once the state accepts and files these documents, your company comes into legal existence.

5. Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a federal tax identification number issued by the Internal Revenue Service (IRS).

An EIN is typically required for:

• Opening a US business bank account

• Hiring employees and running payroll

• Filing federal tax returns and certain information reports

Key points:

• The application can be completed directly on the IRS website.

• There is no government fee for obtaining an EIN.

• Very small sole proprietorships may use the owner’s SSN instead of an EIN, but corporations and multi-member LLCs will generally need an EIN.

For non-US founders, the procedure is slightly more complex (for example, when no Social Security Number is available), but still entirely feasible.

Reference link:

• Internal Revenue Service – “Get an Employer Identification Number (EIN)”

6. Comply with State and Federal Regulations

After formation, you must ensure that your business is properly licensed and registered for tax purposes.

This often includes:

a) Licences and Permits

• General business licences (where applicable)

• Industry-specific licences (e.g., food and beverage, healthcare, financial services, construction)

• Zoning or home-business permits if you operate from a physical location

b) Tax Registrations

• Federal taxes – corporate income tax, payroll taxes, information returns, etc.

• State and local taxes, such as:

  • State corporate income or franchise tax

  • Sales and use tax (for goods and certain services)

  • Employer withholding tax if you have employees in that state

Failing to register and file correctly can result in penalties, interest, and in serious cases, administrative dissolution or loss of good standing.

7. Open a Business Bank Account

A dedicated business bank account is essential for:

• Keeping company finances separate from personal funds

• Demonstrating respect for the corporate or LLC veil

• Simplifying bookkeeping and tax reporting

Banks and financial institutions will typically require:

• Certified formation documents

• EIN confirmation

• Identification and KYC documents for beneficial owners and signatories

• In some cases, in-person verification, especially for non-US residents

This step is crucial if your business will rely on US payment processors such as Stripe, PayPal, or traditional merchant services.

Costs of Setting Up a US Corporation

The overall cost of setting up a US company depends on:

• The state of incorporation

• The type of entity (LLC vs corporation)

• Whether you engage professional service providers (registered agent, legal, accounting, advisory)

Below is a general breakdown.

1. State Filing Fees

State filing fees vary widely. As an orientation:

• Initial formation filing fees typically range from around USD 50 to about USD 520, depending on the state and entity type.

• For example, forming a Delaware LLC currently involves a state filing fee of around USD 110 (excluding other costs such as franchise tax or business licence).

• In California, the filing fee for standard Articles of Incorporation providing for shares is generally around USD 100, with separate rules for minimum franchise tax and other charges.

These fees cover the state’s processing and acceptance of your formation documents and any certified copies you request.

2. Registered Agent Fees

Most states require you to appoint a registered agent with a physical address in the state of incorporation.

• Professional registered agent services generally cost approximately USD 50–300 per year, depending on provider and service level.

• While some states allow you to serve as your own registered agent, using a professional service ensures reliability and privacy (your personal address does not appear as the public registered office).

3. Legal and Accounting Fees

To reduce risk and ensure correct structuring, many founders engage:

• Business lawyers – to review formation documents, shareholder/operating agreements, and regulatory considerations.

• Accountants or tax advisors – to advise on initial tax classification (for example, LLC taxed as partnership vs corporation) and ongoing compliance.

Depending on complexity and jurisdiction, combined legal and accounting fees may range from a few hundred dollars to several thousand dollars.

4. Annual Maintenance Costs

Once formed, you must budget for ongoing costs, such as:

• Annual franchise taxes or other state levies

• Annual or biennial state reports to keep your company in good standing

• Registered agent renewals

• Tax preparation and filing fees

For example, in Delaware (as of 2025):

• The minimum annual franchise tax for corporations currently starts at USD 175, and can increase depending on share structure.

• LLCs pay a flat annual Delaware franchise tax of USD 300 (separate from the initial filing fee).

Exact amounts vary by state and can change over time, so it is important to confirm current rates before finalizing your plans.

Legal Requirements for Incorporating in the US

Meeting legal requirements from the outset helps prevent penalties, disputes, and administrative dissolution.

Appointing a Registered Agent

You must appoint and maintain a registered agent in your state of incorporation. The registered agent:

• Receives official government correspondence

• Is served with legal notices on behalf of your company

The agent must have a physical street address in the state (not just a PO box).

Maintaining Corporate Records

Corporations and LLCs should maintain clear internal records, including:

• Company bylaws (for corporations) or operating agreement (for LLCs)

• Resolutions and minutes for important decisions, where required

• Share/ownership registers

• Financial and accounting records

Good recordkeeping supports limited liability and is essential in audits, banking, or M&A due diligence.

Filing Periodic Reports

Most states require annual or biennial reports to maintain your company’s good standing. These reports typically contain:

• Current principal address

• Names and details of directors/managers and officers

• Confirmation of the registered agent

They do not usually require detailed financial statements, but failure to file or pay associated fees on time can lead to penalties or suspension of the company.

Adhering to Tax Obligations

Your company will generally be required to:

• File federal tax returns (even in years with no revenue, in many cases)

• File any required state corporate or LLC tax returns

• Collect and remit sales tax where applicable

• Handle payroll taxes if you have employees

Engaging a qualified tax professional is strongly recommended, especially if you have cross-border elements (foreign shareholders, foreign-sourced income, or operations in multiple jurisdictions).

Beneficial Ownership Information (BOI) and the Corporate Transparency Act (CTA) – 2025 Update

Beneficial ownership reporting requirements in the US have changed significantly.

• Under the original Corporate Transparency Act (CTA) framework, many entities were expected to file BOI reports with FinCEN (the Financial Crimes Enforcement Network).

• In March 2025, FinCEN issued an interim final rule that removes the requirement for US companies and US persons to report BOI under the CTA.

• As a result, all entities created in the United States (domestic companies) – including those previously defined as “domestic reporting companies” – and their beneficial owners are now exempt from BOI reporting.

• Certain foreign reporting companies that register to do business in the US may still have BOI reporting obligations and specific deadlines.

Because this area continues to evolve, founders should always:

• Confirm the latest BOI rules at the time of incorporation, and

• Seek professional advice where there is any doubt about whether a particular entity must report.

Reference link:

• FinCEN – “Beneficial Ownership Information Reporting”

Statistics Highlighting Business Growth in the US

• According to data from the US Small Business Administration and related summaries, there are around 33 million small businesses in the United States, accounting for approximately 99.9% of all US businesses and employing close to half of the private sector workforce.

• In the World Bank’s last “Doing Business 2020” report, the United States ranked 6th globally in overall ease of doing business (although the specific “Starting a Business” indicator ranked lower). The index is no longer being updated, but it reflects the US’s long-standing attractiveness as a business environment.

• On the Fortune Global 500 list, the United States is home to around 138 of the world’s 500 largest companies (roughly 28%), underlining its status as a central hub for global commerce and capital.

These figures highlight the scale, maturity, and competitiveness of the US business ecosystem.

Common Challenges and How to Overcome Them

Navigating Regulatory Complexity

Each state has its own corporate statutes, tax rules, and filing procedures. For international founders, the patchwork of:

• State formation requirements

• “Foreign qualification” rules

• Annual compliance obligations

can be difficult to manage alone. Working with an experienced US company formation and compliance partner can significantly reduce the risk of errors or missed deadlines.

Cultural and Market Differences

For international entrepreneurs, success in the US market requires more than just incorporation:

• Understanding consumer expectations and business culture

• Adapting branding and compliance (for example, in regulated sectors such as financial services or healthcare)

• Planning distribution, logistics, and local partnerships

Conducting targeted market research and building local advisory relationships can greatly improve your chances of sustainable growth.

Staying Compliant with Evolving Laws

Regulations change frequently in areas such as:

• Tax

• Employment

• Privacy and data protection

• Anti-money laundering and beneficial ownership reporting

Regular compliance reviews and ongoing support from legal and tax professionals help you stay ahead of these changes and avoid unnecessary risk.

How Mirr Asia Can Assist with US Business Registration

Navigating the process of incorporating a US company can be challenging, especially for founders and businesses based outside the United States. Mirr Asia provides end-to-end support so you can focus on strategy, operations, and growth instead of paperwork.

With Mirr Asia, you can:

• Select the right structure and state based on your business model, investor expectations, and tax considerations

• Complete formation correctly, including state filings, EIN application support, and initial corporate records

• Understand banking and KYC requirements, particularly for non-US founders

• Maintain ongoing compliance with annual reports, franchise tax requirements, and key filing deadlines

Our team closely follows regulatory changes—including developments under the Corporate Transparency Act and BOI reporting—to provide practical, up-to-date guidance.

Let us handle the technical and compliance-heavy aspects of US business registration while you concentrate on building and scaling your business. Contact Mirr Asia today to simplify your US company formation journey and ensure your structure is set up correctly from day one.