By Mukund Srinivas | Business Head, NYBACS · Updated · Version 1.2
Start with the operating model
A US incorporation certificate is the beginning of an operating business. Use this guide before submitting formation documents or committing to a bank application. Assign an owner and evidence file to each item; mark unresolved decisions for advice.
1. Confirm the commercial and ownership facts
- Write a one-paragraph business description: products or services, customers, delivery locations and expected transaction flows.
- Map the non-US parent, intermediate holding entities and ultimate individual owners. Record ownership percentages and proposed US directors or managers.
- List US employees, contractors, inventory, premises and customer locations. Formation in one state does not settle obligations elsewhere. [1]
2. Choose the structure deliberately
| Decision | What to resolve |
|---|---|
| C corporation | Evaluate separate corporate taxation, future investors, distributions and parent-company requirements. |
| Single-member LLC | Default federal treatment is generally disregarded unless an election applies. A foreign corporate owner may face its own US filing implications. [2] |
| S corporation | Not available for a subsidiary owned by a non-US company: corporate shareholders are ineligible. [3] |
| Formation state | Compare actual operating footprint, governance needs and recurring obligations; do not select a state on formation cost alone. [1] |
Decision record: proposed entity __________ formation state __________ adviser __________
3. Assemble the formation and governance pack
| Prepare | Evidence to retain |
|---|---|
| Parent-company identity | Certificate of incorporation, current registry details, constitutional documents and registered address. These are preparation items; the exact filing and bank pack varies. |
| Authority to invest | Parent approvals and authorised signatory details. Obtain home-jurisdiction advice on any outward investment, remittance and reporting requirements before funding. |
| US governance | Formation document, bylaws or operating agreement, initial resolutions, share/member register and documented ownership issuance. |
| Addresses and agent | Registered agent details, actual operating address and mailing address clearly distinguished. A registered agent is not evidence of operating premises. [1] |
| EIN application | Accurate legal name, entity details and qualified responsible-party information. Use the IRS application route that fits the applicant; do not assume online eligibility. [4] |
4. Make the business operational
- Confirm the bank/provider accepts the ownership, countries, business activity and address arrangement before applying.
- Set up bookkeeping from the first transaction, including payments made by the parent on behalf of the US entity.
- Document intercompany services, funding and intellectual-property arrangements; obtain advice on pricing and tax treatment.
- Review state registration, tax nexus, licences and payroll obligations before starting the relevant activity. [1]
- Assign an owner for notices, registered-agent mail, tax returns and recurring state filings.
Worked example: funding a new subsidiary
Scenario. A non-US software company forms a wholly owned US C corporation. It transfers $50,000 as approved share capital and separately advances $20,000 under a signed loan agreement. The US entity then pays $8,000 for professional services.
| Transaction | Illustrative bookkeeping |
|---|---|
| $50,000 equity funding | Debit bank $50,000; credit equity $50,000. Allocate between share capital and additional paid-in capital according to issuance documents. |
| $20,000 parent loan | Debit bank $20,000; credit loan payable to parent $20,000. Retain loan terms and approvals. |
| $8,000 service payment | Debit the appropriate expense or asset account; credit bank $8,000. Final classification and deductibility require review. |
Cash reconciliation: $50,000 + $20,000 - $8,000 = $62,000. Equity and loan proceeds are not customer sales. Keep separate ledgers for parent balances, customer revenue and third-party expenses.
Tax review: a foreign-owned corporation with related-party transactions should assess Form 5472 requirements and retain the supporting transaction schedule. The treatment depends on the transaction and reporting rules. [5]
Launch readiness sign-off
| Checkpoint | Accountable person / evidence / status |
|---|---|
| Structure and state decision | ________________________________________ |
| Parent approval and ownership records | ________________________________________ |
| EIN and banking readiness | ________________________________________ |
| Bookkeeping and intercompany agreements | ________________________________________ |
| Registrations and first-year calendar | ________________________________________ |
Suggested internal control: proceed only after each unresolved item has a named owner and agreed completion date. This is a planning control, not a legal certification.
Authoritative sources
[1] SBA - Register your business
https://www.sba.gov/business-guide/launch-your-business/register-your-business
[2] IRS - Single-member LLCs
https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies
[3] IRS - S corporations
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations
[4] IRS - Instructions for Form SS-4
https://www.irs.gov/instructions/iss4
[5] IRS - Instructions for Form 5472
https://www.irs.gov/instructions/i5472
Sources accessed 25 October 2026. Numbered references identify the authority for regulatory statements. Unreferenced workflow suggestions and the worked example are NYBACS editorial guidance.
Put the checklist to work
NYBACS supports US formation, entity compliance, accounting, tax coordination, payroll and banking documentation. NYBACS works with founders, corporate groups and their professional advisers worldwide to coordinate US requirements.
General educational guidance, not entity-specific legal, tax or banking advice. Requirements depend on the facts and may change. Obtain advice before implementing a structure, filing position or transaction.
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