Question Hi Marina, I’m planning on creating a company that imports products from another country and sell these products here in the U.S. I have social security and I am in the residence process.
The company wouldn’t have more than three employees at best.
Should I create a corporation or an LLC?
Will the percentage of tax that I’ll have to pay be higher because I’m not a resident?
Can I create a company myself from the Secretary of State of Georgia site or is it imperative that I get an accountant.
I don’t need a business plan because I am currently been doing this business for another company and the requirement for an initial investment is very low and that’s why I don’t need a loan.
Can the type of business be changed later on? Like from a corporation to a LLC or vice versa?
Answer Dear Giuly:
> The company wouldn’t have more than three employees at best.
> Should I create a corporation or an LLC?
Corporation - better legal protection and better write off for tax purpose.
> Will the percentage of tax that I’ll have to pay be higher
> because I’m not a resident?
It depends. You will pay the same taxes as the US Citizen, but you might check with your CPA if you need to pay additional taxes to your country of origin. IRS will not collect them. In some cases foreign citizens can be excused from paying US taxes at all - consult CPA.
> Can I create a company myself from the Secretary of State of
> Georgia site or is it imperative that I get an accountant.
You can do it by yourself. Keep in mind it is tricky to set up a proper corporation, so you must spend a lot of your time making sure that everything is done according to the law or choose one of the reputable online services that for a fee will do everything for you: http://66.181.246.172/incorporate/?altid=183 (used by our clients)
> I don’t need a business plan because I am currently been
> doing this business for another company and the requirement
> for an initial investment is very low and that’s why I don’t
> need a loan.
The fact that one needs business plan only when applying for a loan is a terrible misunderstanding. A company could not function without business plan. One writes it not for a nice guy at the bank - one writes it for himself. Business Plan is very important - it must not be fancy - but it will show you your strength and weaknesses, and where you are going, you can put your new ideas their every week, and monitor your progress. Do it for yourself, not for a bank.
> Can the type of business be changed later on? Like from a
> corporation to a LLC or vice versa?
Yes. But it is cheaper and easier to upgrade (from LLC to corp) than to down grade (from corp to LLC).
