United States

Currency

US Dollar (USD)

Payroll Frequency

Bi-Weekly or Monthly

Employer Taxes

15.3%

About United States

The United States is an economic, technological, and military powerhouse bordering just two countries, Mexico and Canada. The US comprises of 50 states, with Washington, D.C. (District of Columbia) as its capital. The country has a wide variety of natural minerals, including the largest reserves of coal in the world. Its agricultural land amounts to almost 45 percent of the total landmass, and forests comprise 33 percent. Various natural disasters have been known to affect different areas of the country. The United States has an estimated population of over 326 million people with a breakdown as follows: 72.4% white, 12.6% black, 4.8% Asian, and the rest classified as ‘other’ or various ethnic groups including native Americans. As of 2018, urban areas contained 82.3 percent of the country’s total population. The U.S. has a constitutional federal republic type of government. It has the largest economy in the world, with a GDP growth of 1.5 percent and a GDP per capita of $57,500 at the most recent tally.

Company Formation Services in the United States

Aadmi makes the process of company formation in the United States easier and simpler. The process includes business registration at the state level, selecting the most appropriate structure (sole proprietorship, partnership, LLC, or corporation), and complete compliance with U.S. federal and state business regulations. An LLC or corporation is the popular choice of most entrepreneurs in the U.S. because of their flexibility, limited liability shield, and tax savings.

With our professional assistance, establishing your company in the United States is seamless, keeping you compliant and growth-focused.

Company Types

Limited Liability Company (LLC)

A Limited Liability Company (LLC) in the United States is an adaptable business form that provides limited liability protection to members. It is a distinct legal entity, shielding members from personal responsibility for business debts and liabilities. One or more members may form an LLC, and it can be taxed as a sole proprietorship, partnership, ‘S’ corporation, or ‘C’ corporation.

Corporation (C-Corp and S-Corp)

Corporations are separate legal entities owned by their shareholders. A C-Corporation (C-Corp) is separately taxed from its owners, whereas an S-Corporation (S-Corp) passes profits (and limited losses) directly to the owners’ individual income without having to pay corporate tax rates. Both entities provide limited liability protection. S-Corp designation is only for U.S. citizens and residents, and for 100 shareholders or fewer.

Branch Office

Foreign businesses wishing to operate in the U.S. can create a branch office. A branch office is not a distinct legal entity but is part of the parent company, and its liabilities are directly linked to the parent company. The structure is less popular because of regulation and tax complexity.

Partnership

A business relationship between two or more persons or organizations that enters into an agreement to share profits and losses of the business. The United States recognizes General Partnerships, Limited Partnerships (LP), and Limited Liability Partnerships (LLP). Partnerships provide the benefit of pooled capital and shared responsibilities, but may make partners liable depending on the form.

Incorporation Requirements

Paid Up Capital

There is no minimum paid-up capital requirement for setting up a company in the United States.

Foreign Percentage Ownership

Foreign companies can establish wholly owned subsidiaries in the U.S. There are no restrictions on foreign ownership of most types of businesses, although certain sectors (e.g., aviation, communications) may have limitations.

Local Director

There is no obligation for a U.S. company to have a local director. Directors and officers may live anywhere in the world.

Corporate Secretary

There is no statutory obligation to have a corporate secretary. If the company does, the secretary may be of any nationality and location.

Local Office Address

A physical address in the U.S. is required for company registration. This will serve as the official registered office to receive state correspondence. A virtual office may be employed in most situations.

Incorporation Documents

What are the Company Incorporation Documents to file?

Articles of Incorporation or Certificate of Formation (state-dependent)

Company name and purpose of business

Name and U.S. address of registered agent

Directors’/members’ names and addresses

Operating Agreement (for LLCs)

Corporate bylaws (for corporations)

Employer Identification Number (EIN) application

Incorporation Process

Register and Reserve the Company Name

Company names are registered on a state-by-state basis. Name availability may be checked through the website of the Secretary of State in the desired state. A few states permit (but do not mandate) name reservation before incorporation.

Choose Filing Method

Companies may be registered:

Online via the State Portal – the Fastest and most convenient method. Fees and turnaround times differ by state.

By Mail – The documents can be sent by mail to the office of the Secretary of State. Generally takes longer and might cost extra administrative time.

Through Registered Agents – Most foreign investors employ service providers or agents to assist with incorporating and filings.

Prepare Incorporation Documents

Fill out and file the Articles of Incorporation or Certificate of Formation with the state agency. Draft supporting documents like the Operating Agreement or Corporate Bylaws.

Secretary of State’s Office

This office regulates the incorporation and state-level registration of business entities. Every U.S. state also has a Secretary of State and associated rules and fees for incorporation.

Bank Account

To establish a U.S. business bank account, the majority of banks require:

U.S. business registration documents

Employer Identification Number (EIN), i.e., Social Security Number or Individual Taxpayer Identification Number (ITIN)

Operating Agreement or Bylaws

Personal identification of company directors/members

Some banks might insist on physical visits. JPMorgan Chase, Bank of America, Citibank, and Wells Fargo are typical banks.

Statutory Registrations

Internal Revenue Service (IRS)

The IRS is the federal taxing authority responsible for administering federal income tax, payroll tax, and other fiscal obligations. Businesses are required to register and receive an Employer Identification Number (EIN).

State Tax Registrations

Depending on the type of business and the state, businesses can be required to register for state income tax, sales tax, franchise tax, and other taxes.

Payroll Taxes

In the event of hiring employees, businesses need to register for payroll taxes such as:

Federal Income Tax Withholding

Social Security and Medicare Taxes (FICA)

Federal Unemployment Tax (FUTA)

Workers’ Compensation and Unemployment Insurance

Every state requires insurance coverage for workers’ compensation and unemployment. Usually, registration is necessary prior to hiring employees.

Workplace Retirement Plans

U.S. companies can provide retirement options like 401(k)s. There is no federal requirement, but some states mandate that employers provide retirement savings plans if there is no plan offered. Employers will have to abide by Department of Labor and IRS regulations.

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Employment Relationship

• Permanent Employment

In the United States, permanent employees are presumed to work at will. This means that employers can terminate an employee with an indefinite-term contract at any time, for any reason, or for no reason, without incurring legal liability. Similarly, an employee can leave their job at any time, for any or no reason, and with no adverse legal consequences. The only exception to the "at will" presumption is that employers cannot terminate an employee for an unlawful reason (for instance, discrimination and retaliation are not legal reasons for employee termination). Full-time employees (who are usually offered benefits) generally work at least 36 hours per week. They can be salaried employees, meaning they earn a fixed amount per month, or they can be paid hourly.

• Fixed-Term or Specific-Purpose Contracts

Under the law of the United States, written employment contracts are not required, and there are generally no minimum requirements for an employment contract. Additionally, in most states, no written memorialization of terms is required. Some written contracts are required for at-will employment. A written employment contract may limit the employer's right to terminate an employee. Most written employment contracts describe the job's scope, duties, salary, and any other compensation and benefits. A written employment contract may also contain clauses related to the job's duration, grounds for termination, provisions about trade secrets or client lists, an employer's ownership of employee work product, and dispute resolution methods related to the employment contract. Depending on the state, certain provisions heavily slanted towards an employer may be found unconscionable or in violation of public policy. All employers that use written employment contracts have a special obligation to deal fairly with employees. This obligation is known as the "covenant of good faith and fair dealing." An employer can be held responsible for breaching this duty in some states. Without an employment contract, employment relationships are presumed to be "at-will," meaning they can be terminated by either party at any time, with or without cause.

• Temporary Employment Contratcs

In the United States, temporary employees, often called "temps," are employed only for a specified period. For example, they are typically hired to cover absent employees (such as those on maternity or disability leave), to fill temporary vacancies, or to fill other gaps in the organization's workforce. They may work part-time or full-time hours. However, they are generally not eligible to receive employee benefits. Many temporary employees are hired through temporary employment agencies, and some are employed on a "temporary to permanent" basis, which allows for permanent hire after a probationary period. In some states, companies that hire temporary employees may be subject to federal discrimination and harassment lawsuits and other claims. Also, there are circumstances in which temporary employees may claim rights under the Family Medical Leave Act. The Equal Employment Opportunity Commission (EEOC) provides specific guidelines regarding temporary employees: "Staffing firm workers are generally covered under the anti-discrimination statutes. This is because they typically qualify as "employees" of the staffing firm, the client to whom they are assigned, or both. Thus, staffing firms and the clients to whom they assign workers may not discriminate against the workers based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), or disability."

Probationary Period

In the United States, there are no national laws governing probationary periods. However, many employers have policies regarding trial periods, otherwise known as “introductory periods” or “probationary periods.” Such policies are devised based on the needs of the employer. They generally provide for a formal performance evaluation after an initial employment period (often 90 days). Montana is the only state with legislation concerning probationary periods. If the employer does not specify a probationary period or state that there is no probationary period, a 12-month period is implied. This period may be extended further but may not exceed 18 months in total. The probationary period commences on the first day of employment. If the employee takes any leave of absence during the probationary period, these days are not counted towards the completion of the probationary period.

Working Hours

According to the U.S. Wage and Hour Division (WDH), hours worked ordinarily include all the time an employee must be on the employer's premises, on duty, or at a prescribed workplace. The law of the United States indicates that the standard workweek is 40 hours. Generally, employees working more than 40 hours per week are eligible for overtime. The Fair Labor Standards Act (FLSA) contains the federal overtime provisions. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Internal Revenue Service defines a "full-time employee" as an employee working an average of at least 30 hours per week or 130 hours per month per calendar month.

Holidays / PTO

• Statutory Holidays

2026

January 1 - New Year's Day
January 19 - Martin Luther King Jr. Day
February 16 - Presidents' Day
May 25 - Memorial Day
June 19 - Juneteenth
July 3 - Independence Day (substitute)
July 4 - Independence Day
September 7 - Labor Day
October 12 - Columbus Day
November 11 - Veterans Day
November 26 - Thanksgiving Day
December 25 - Christmas Day

2027

January 1 - New Year's Day
January 18 - Martin Luther King Jr. Day
February 15 - Presidents' Day
May 31 - Memorial Day
June 18 - Juneteenth (substitute)
June 19 - Juneteenth
July 4 - Independence Day
July 5 - Independence Day (substitute)
September 6 - Labor Day
October 11 - Columbus Day
November 11 - Veterans Day
November 25 - Thanksgiving Day
December 24 - Christmas Day (substitute)
December 25 - Christmas Day
December 31 - New Year's Day (substitute)

• Paid Annual Leave

In the United States, the Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave, or federal or other holidays. Vacation leave benefits are matters of agreement between an employer and an employee (or the employee's representative). Employers decide how much vacation to offer and to which employees to offer it. However, the Davis-Bacon Act provides paid leave to specified government contractors and subcontractors. In the United States, employers can adopt vacation accrual schedules and cap the vacation time employees can accrue (many organizations take advantage of this right to encourage employees to use their vacation time regularly). For instance, company policy may provide that an employee earns a certain number of vacation days each month or a certain number of hours each pay period. Some companies impose a waiting period before new employees may accrue vacation time.

• Sick Leave

The United States has no federal legal requirements for paid sick leave. However, the Family and Medical Leave Act (FMLA) does require unpaid sick leave, which organizations subject to the FMLA must provide. The FMLA provides the employee or a member of the employee's immediate family with up to 12 weeks of unpaid leave for certain medical situations. In many cases, paid leave may be substituted for unpaid FMLA leave. Employees are eligible for FMLA leave if they meet the following conditions: They have worked for their employer for at least 12 months. They have worked at least 1,250 hours over the previous 12 months. The location where they work is one where the employer has at least 50 employees within a 75-mile radius. As the momentum for a federal paid sick leave requirement grows, some states and municipalities have started requiring employers to provide paid sick leave to specific qualified individuals. The size of the employers subject to paid sick leave mandates, and the amount of paid sick leave granted to employees vary by jurisdiction.

• Maternity Leave

United States federal law does not provide cash benefits to women during maternity leave. Several states have enacted laws to provide new parents with leave and pay. The following states have maternity leave requirements and/or have implemented or are in the process of implementing a family leave insurance program: California Connecticut Washington, D.C. Hawai'i Maine Massachusetts Minnesota New Jersey New York Oregon Rhode Island Vermont Washington state Wisconsin The benefit formula and eligibility criteria vary in each state. Under the Family and Medical Leave Act (FMLA), U.S. workers generally have the right to take 12 weeks of unpaid leave. The FMLA applies to employees who have worked at least 12 months at a company with at least 50 employees. All states and territories are subject to the federal FMLA.

• Paternity Leave

The federal Family and Medical Leave Act (FMLA) guarantees 12 weeks of unpaid paternity leave in the United States. An employee's entitlement to FMLA leave for birth and bonding expires 12 months after the date of birth. A few states also have laws requiring paid paternity leave. California, New Jersey, New York, Rhode Island, and Washington currently require paid family leave for fathers in some form. FMLA leave may be taken before a child's actual placement or adoption if an absence from work related to the placement for adoption or foster care is required. When FMLA leave is taken after the child's placement to ensure bonding, it must be continuous leave unless the employer agrees to intermittent leave. Entitlement to FMLA leave for the placement of a child for adoption or foster care expires 12 months after the placement.

Termination of Employment

• Notice Period

United States federal legislation does not expressly address notification procedures for dismissing a worker whose employment is governed by a contract. Generally, workers in the United States are at-will and do not have employment contracts. However, if an employment contract exists, the parties can bargain for terms governing notification procedures.

• Severance Benefits

In the United States, there is no requirement in the federal Fair Labor Standards Act (FLSA) for severance pay. Nevertheless, it is common for employers to provide this type of compensation (unless the employee was fired for misconduct). Severance pay is a matter of agreement between an employer and an employee (or the employee's representative). It is usually based on the length of employment upon termination. The Employee Benefits Security Administration (EBSA) may assist an employee who did not receive severance benefits under their employer-sponsored plan. Some states require immediate payment of terminal wages as well as reimbursement for accrued or unused vacation days.