Subsidiary company is a company that is owned or controlled by parent company or holding company. Most of the cases a subsidiary can be a company, corporation or a LLP. The main intention behind the creation of a subsidiary is to expand its operations and business into new industries or to establish a difference between product lines. This process also helps the business to create separate branding and campaigns relating to different marketing strategies. This system of creating one’s own brand will attract and build the strong customer base.
Whom to approach for getting registered?
If you want to establish your subsidiary in USA, you should have to contact the secretary of state’s office for getting register. Whether it is a company with limited liability or corporation, it will depends upon the nature of respective entity.
Process for registering:
These are the major processes that an entity should follow for the registration.
- Define the nature of the company in the documents.
- Complete all the paper work regarding registration process.
- Pay the appropriate filing fee.
- Nominate the Board of directors for newly formed subsidiary.
- Create articles of incorporation that outlines the business operations.
- Make sure about the capital (Number of shares to be issued).
- Define the roles & responsibilities of Board of directors.
EIN for documentation process:
Situating a subsidiary requires the Employer identification number for the documentation. Basically an EIN is a 9 digit unique number that assigned by the Internal revenue services (IRS) of United States for the purpose of identification. So getting an EIN is mandatory for the company for all the documentation such as tax returns, business banking and invoicing etc.
The EIN assigned to the subsidiary will be different from the one assigned to your primary business.
Activities should perform after documentation:
There are some tasks to be performed by the company immediately after documentation. They are comprised of
- Submitting stock transfer paper work to the SOS office.
- Create a new Book keeping system for subsidiary that is different from subsidiary.
- Create separate balance sheet, income statement and Budget.
- Transfer all materials, equipment, supplies, staff and other assets that are necessary.
What set of documents you should need to incorporate USA Subsidiary?
These are the documents that a company need to arrange before setting a subsidiary in USA.
- Deciding on a legal business structure of USA
- Bylaws and identification agreement
- Employer identification number
- Bank account, business plan & financial statements
- Documents required if raising private investment capital
If you are looking for other information on Start-ups, Capital Markets, Accounting, Taxation, Business incorporation and its legal formalities, do read more articles on my blog.
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