WHAT IS VIRTUAL COMPANY ?
The virtual company carries out most of its operations online with the workers from all around the world. In short, the virtual company does not us a physical office space. This is major difference between a normal(physical) company and a virtual company.
Below are the simple steps to setting up a Limited Liability Company (LLC) in the USA
- Select a state
In doing this, you should consider choosing a state with foreigner-friendly laws and policies and low annual fees.
- Name your LLC
When doing this, ensure to avoid a name that will confuse your LLC with government agencies.
- Hire a Registered agent.
A registered agent is an entity that sends and receives legal papers on your behalf
- File your LLC with the state
To do this, you will have to file an Article of Organization Document. This document outlines the organization structure of your company, i.e., it determines how your company runs
- Create an LLC operating Agreement.
The operating agreement is a legal document that shows the ownership and operating procedures of the company. Although it is not necessary in most states, it is advisable to get one as it prevents future conflicts among website owners.
- Get an Employer Identification Number
The EIN is the tax ID for your business. You do not need a US SSN or ITIN or even a US mailing to obtain your EIN, as you can submit an application to the IRS by fax or mail.
- Get a physical US mailing account
A US mailing account is necessary for you to open a US bank account. You can get this done by employing a service that will set up a US mailing address for you, they will also receive mails on your company’s behalf and deliver them to you online.
- Open a US bank account
This is the most challenging step as it requires a trip to the bank for a physical identification according to laws. You can also use services like paypal depending on your business type.
You have to:
- Deal with Construction Permits and Getting Electricity.
- Register Property.
- Get Credit.
- Protect Investors.
- Pay Taxes
- Trade across Borders.
- Enforce Contracts.
- Resolve Insolvency.
The cost of setting up the normal (physical) company a depends on the type of company you want to set up. According to an agent, “For a limited liability company, the major cost is the state filling fee. And this fee is around $140 to $500". For more info you can visit;
https://howtostartanllc.com/cost-to-form-an-llc
What are the limitations of the Virtual Company?
- Unforeseen technical difficulties
The problem of a broken internet or even a broken computer is always unforeseen and unexpected, this alone can prevent you from working for hours or even days if it is a complex problem. However, technical problems in physical offices can be resolved and repaired while the employees continue their work.
- Accountability Management difficulty
Employees can easily slack off with flimsy excuses since they cannot be monitored closely. It is however known that this is no the case for the physical office, as you have to follow some procedures before you can make yourself absent from work
Difficulty in building a strong team bond
Studies have shown that the team bond has a direct impact on productivity. That is the stronger the team bond the stronger the productivity and vice versa. Since your workers are not interacting physically, a strong team bond is usually difficult to achieve.
- Communication can be tough.
When the means of communication does not include a verbal tone, misinterpretation can occur. The typed message can be misinterpreted and the original meaning is not understood.
- Low Productivity
All the factors mentioned above leads to one thing and that is LOW PRODUCTIVITY. This is the main and major reason people prefer the physical company, because the purpose of starting a business is to be productive and generate good income.
Q. Can we Rent an Office or Place via Virtual Company Bank account in USA?
The bank account that will be registered for you by your registered agent will be a legal and legit bank account. It will function as a normal bank account, so it can practically do anything a normal bank account can do
Q. How to do local trading from Virtual company in USA?
To do this you can use a trading platform that offers local trading and you make payments via your virtual company bank account
Q. Can we export goods from USA customs from the virtual company?
There are some platforms that can help you to clear customs and export your good. An example is Livingston Simplify trade
https://www3.livingstonintl.com/ppclp/us-customs-brokerage-solutions/?creative=537126736008&keyword=duty%20usa&matchtype=b&network=g&device=c&keyword_session_id=vt~adwords|kt~duty%20usa|mt~b|ta~537126736008&_vsrefdom=wordstream&utm_medium=ppc&utm_source=google&utm_campaign=us-customs-brokerage&gclid=Cj0KCQiAnaeNBhCUARIsABEee8UL_tfqmCHUT3fVLyemVyw-nsvfyu5q6KnWznhv5Phf4dFJ00p_emkaAqWyEALw_wcB
Q. Can we acquire export license and trading license from the virtual company?
You can obtain Your export license online in USA. But first you will a Company Identification Number (CIN). You can obtain this by filing a form online on the Department of Commerce's Bureau of Industry and Security website. Then you must apply for a license via the Department of Commerce's SNAP-R site. Pay close attention to specific instructions.
You can also get your trade license online through some registered platform. An example is Legal Raasta https://www.legalraasta.com/trade-license/
Q. Can we buy an office or home from virtual company?
Yes, you can purchase offices and homes online, you just have to visit the right platform and follow the necessary processes. To purchase a home online can be difficult, but is not impossible. First, you’ll have to find a lender who services mortgage loans online. Apply for loan through your lender of choice and get a preapproval. Then, get in contact with a trustworthy and reliable real estate agent based out of the area you want to move to. Shop for homes both online and through your agent.
Q. Can we hire US citizen and pay salary from virtual company?
You can hire and pay your oversees employee remotely. However, the mode of payment will depend on the following
- The type of worker
- The specific country’s currency, which in this case is US dollars
- The tax and the social security
- The length of the employment.
To pay your virtual workers you can
- Pay them as independent contractors
- Pay them on your country payroll
- Ask a 3rd party company to put them on their payroll.
To see more explanations on this visit
https://shieldgeo.com/can-you-pay-your-overseas-employee-remotely/
Q. Format for local invoice and purchase for virtual company?
To see the invoice template for your company, click on the link below and after entering the site, like on create my free template. Then follow the processes to get a free invoice template designed for your company.
https://www.freshbooks.com/invoice-templates/electronic
To see the purchase order template for your company, click on the link below and follow he processes.
https://freeinvoicebuilder.com/free-purchase-order-template-online/
Q. Kindly suggest the best and cheapest way to register a company in USA?
The best way is to work with a registered agent. You can browse different registered agents online to see which one has the most suitable subscription plan for you. I can however suggest this one for you;
The US corporate Services Inc. ; https://www.usa-corporate.com/
Q. What documents are required from Indian to register a company in USA?
According to US Corporate Services Inc, the table below shows the documents needed to start an online company
DOCUMENTS NEEDED TO SET UP A US COMPANY
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Summary of New Company Document Requirements
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Business Corporation
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Limited Liability Company (LLC)
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Formation
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Certificate of Incorporation, or
Articles of Incorporation
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Articles of Formation or
Articles of Organization
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|
Governance
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Organizational Minutes and bylaws
optional: shareholder agreement
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Operating Agreement
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|
Ownership
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Share Certificate for each shareholder
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Member Certificate for each Member
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Tax
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IRS Form SS4 – Application for Employer Identification Number
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Due Diligence
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Federal Law prohibits certain nationals (Iranians, North Koreans, Cubans, for example,
from owning US assets including US companies.
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|
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Source; USA Corporate Services Inc
https://www.usa-corporate.com/start-us-company-non-resident/necessary-documents/
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Q. How to transfer payment and how the accountings should be kept when we keep in USA and India?
The best methods of making payments online are to use a payment gateway. You can search for the available payment gateways in your country. However, to transfer money internationally, the best and easiest method is the Western Union. The link below shows alternative ways of transferring money internationally
https://www.compareremit.com/money-transfer-guide/best-ways-to-send-money-from-india-to-the-usa/
To keep your accounting, you can employ the services of a virtual bookkeeper online. They will take care of all your bookkeeping and accounting.
Q. What would be the tax structure in USA for Indians who opened the Virtual company?
The tax structure depends on your nexus in the state. the sales tax nexus is the connection between a state and an entity that must pay tax. Nexus tells whether a business has sufficient presence in a state for the state to tax it. There are some other factors that affects your tax structure, Read more about this on the link below.
https://taxfoundation.org/working-from-home-remote-work-tax-obligations/
Q. Which are the best bank account to opt for Indian Startups who opens the virtual company in USA?
The best type of account for a business start up is the current account. The following is a list of the best current accounts for Indian startups
- Indusind freedom
- Axis bank startup
- HDFC Bank smartup
- ICICI Istartup
- YES bank head startup.
- RBL bank Indian startup club.
To see full details on each banks, visit: http://startuphyderabad.com/best-current-accounts-indian-start-ups/
Q. Does a Virtual company or a normal company needs a local us partner? Kindly explain both these forms in detail with all the above questions answered
There is no statutory law by the federal government that is governing the establishment of partnership. However, each state has its own statutory law on this, most states have adopted the Uniform partnership rights (UPA0. In summary, there are no laws that compulsories the establishment of a partnership in the USA.
However, it is advised that a company should get a legal partner due to the following benefits. The benefits are for both the virtual and the normal company
- Building brand equity.
When you partner with a local brand and you build trust by association, you will enjoy the brand equity. Brand equity according to Investopedia “Brand equity refers to a value premium that a company generates from a product with a recognizable name when compared to a generic equivalent”
- Branching out to new audience.
This is simply expanding the horizons of your business. This is easily achieved through a marketing partnership. In this type of partnership, both parties have a mutual agreement to create and build awareness of each other’s product to their audiences. Although there are still more benefits of the marketing partnership
- Innovation
As it is known ha business improving ideas are not easy to come by, the right partnership could help you to generate more ideas for your business by hosting brainstorming sessions for both parties, or through other means
- Investments and cost saving.
The right business partner can bring the right connection to your business. This may help your company to attract potential investors and bring more capital to your business.
Your partner can also share your financial burden and expenses that could lead to significant savings in cost.
To see more benefits and he more reason you need a business partner, check out
https://www.americanexpress.com/en-us/business/trends-and-insights/articles/what-are-the-advantages-and-disadvantages-of-a-partnership/
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REFERENCES
- Truic: How to start an LLC (2021). How to open a company In the USA
https://howtostartanllc.com/open-a-company-in-the-usa
- Jason Gerric (2018). Top 10 challenges of doing business in the US. Mondaq. https://www.mondaq.com/unitedstates/corporate-governance/752934/top-10-challenges-of-doing-business-in-the-us
- Runaway (2021): 21 virtual office advantages and disadvantages.
https://runway.is/blog/virtual-office-benefits-and-disadvantages/
- Chron (2019) how to get a license for import-export business
https://smallbusiness.chron.com/license-importexport-business-14635.htm
- The US corporate Services Inc. ; https://www.usa-corporate.com/
- Wikipedia https://www.wikipedia.com
- Compare remit (2020) Best way to send money from India to USA
https://www.compareremit.com/money-transfer-guide/best-ways-to-send-money-from-india- to-the-usa/
- Rocket mortgage (2021). Buying a house online; is it possible https://www.rocketmortgage.com/learn/buying-a-house-online
- Jared Walczak (2020) Working from home brings greater exposure to state tax code. Tax foundation
https://taxfoundation.org/working-from-home-remote-work-tax-obligations/
- Anish Tadimarri (2017) Best current accounts for Indian startups. Start-up Hyderabad
http://startuphyderabad.com/best-current-accounts-indian-start-ups/
- American Express (2021) The advantages and disadvantages of a partnership
https://www.americanexpress.com/en-us/business/trends-and-insights/articles/what-are-the-advantages-and-disadvantages-of-a-partnership/
- Shieldgo (2021) can you pay your oversees employees remotely?
https://shieldgeo.com/can-you-pay-your-overseas-employee-remotely/
- Economic times https://economictimes.indiatimes.com/