Explained: Guide to incorporating company in United States

Recently, we have seen a demand for Indian entrepreneurs increasing through companies such as SaaS and Tech Products whom are interested in registering their companies in United States. So, we have partnered with some of top CPA Firms to help our own Indian entrepreneurs start their business ventures in the US.

Why do so many Indians want to start their entrepreneurship in the US? The answer is simple: it’s because the United States of America is the top number one business hub in the world. Foreign nationals are setting up US Businesses that range from major enterprises to small startups. The most efficient way to expand business worldwide is to register in the US Marketplace. This is seen as the key to success for any business around the world. The USA has proven to be the world’s largest, best, and most integrated market with the lowest tax rate. Registering a company in the USA as non-resident is a simple and 100% online process.

If you are Tech or SaaS Company you should consider these advantages:

  1. It is easier to take International Payments in a US Entity. You have access to Multiple Payment options like Stripe, Braintree and Venmo. These options are normally not available to Indian Companies. These providers have rock solid APIs, and they are loaded with lot of features that can help you to scale the American markets.
  2. Makes it super easy to charge for a subscription which is not available with Indian Payment Gateways.
  3. Makes it easier to take payments from a third party. You can receive checks, accept cash, and get wire transfers same day. You can also accept Bitcoin!
  4. Increases trust in your brand so you can also go ahead and get an EV SSL certificate for your brand. You can get all those trademarks like BBB, Trustee Privacy etc.
  5. As long as the US company is not a subsidiary of your Indian company, you don’t have to worry about the US company’s taxation here in India. Just pay taxes in the United States and relax!

Eligibility:

Any Indian citizen can open a company in the United States. For C-Corp you will need two different directors at minimum.

Options:

LLC, C-Corp, S-Corp

State:

You can choose any state(s) you want to operate in.

We prefer C-Corp in the state of Delaware. Delaware is home to many tech companies and has very sound corporate laws. Delaware corporations allow companies to issue stock to employees, raise funds from the angel investor or venture capitalist, and provides the stability of clear corporate rules and case law. Approximate 60% of the Fortune 500 companies in the United States are registered in Delaware. Delaware also offers lowest tax rate and has very liberal tax laws.

Once you have decided the desired name, ABC., Inc and arranged documents it generally takes 7-10 days to complete the Registration Process. Expect it to take another 15 days to apply for an EIN (Employer Identification Number), which is similar to getting a PAN in India.

You can then take a virtual address within United States to receive documents, and to be used as a registered address for your business. You will also need a registered service agent to receive documentation on your behalf.

Once you get Incorporation Certificate and EIN you can then apply for a bank account.

We have previously had great experiences with the Silicon Valley Bank. We recommend opening the bank account with the Silicon Valley Bank as they can open it online. However, approval varies on case-to-case basis. In some cases, you may need to visit the bank in person. Banks like the Silicon Valley Bank are interested in startups with a strong product and someone that has a strong vision for their future. If accepted, not only do they provide you with banking facilities, but they will also provide mentorship to raise funds, etc. From past experiences, their support is top notch!

If SVB denies your application then you can schedule an appointment with any other bank, and submit all the papers paperwork to open your account in person.

Once that is done you can sign up for services such as Braintree and Stripe Payment. These payment systems are gateways that help integrate their APIs to accept credit cards and other payment forms. Now it is easier for you to get money from international clients.

A company in the United States will open new opportunities for you and make it easier to do business with international clients. Most of the businesses that are going international in this manner can help their company grow, acquire new customers, and raise their brand equity!

Seeking advice : commission on selling price + VAT

Hi. I am just wondering if i can get some advice on this issue which is on the back of my mind for quite long now. As you know all online selling companies (be it Food Ordering Platforms (FOPs) or ecommerce majors) charge a certain percentage from the seller on selling price. Now in some (i guess in most) cases the commission is being charged on selling price + VAT. For example if an item’s selling price is rs. 100/- and VAT (say 10%) is 10/- so the commission would be charged on 110/- instead of only on rs. 100/-. Apart from this commission, seller is liable to pay the entire VAT as well. So these companies are eraning from a source which is not someone’s personal income and actually is govt’s money.

As I said, most companies are following this practice however I dont agree with this and think they are taking advantage of some loop here (i guess our law is quite on this issue).

What do you people think? All major companies are doing so, so it’s fine? Is there any law which allows them to do so? Is it illegal as I am taking it? What does our law say about it?

Please share your thoughts.

Avoiding trademark rejections: the basics explained

trademark

The symbolic entity of a trademark is not merely restricted to a graphical image, icon or label which is synonymous to your company’s name; rather, it holds a lot of significance to it. It serves a twofold purpose of securing a copyright for the goods and services of your enterprise and establishing a brand value of your firm reflecting the ideology which it adheres to and the values it wishes to offer to its customers.

Trademark registration: the whole concept unveiled

There are 3 aspects to any trademark, two of which have been explained above in the introduction. The third and the most vital aspect of trademark makes the whole issue of trademark registration a complex one. The trademark or a mark carries a legal aspect to it which is linked to its registration. A properly registered trademark is liable for legal compensation if an unauthorized use of the registered trademarks is observed by other parties.

Steps to ensure before filing for registration

• Prior to filing of an application seeking approval for the trademark it is advised to do a thorough trademark search.

• This search should be conducted through both online as well as offline mode.

• One can also take help from an attorney adept in trademark laws before making any decisions regarding trademarks.

• The supervision and registration of trademarks in India is monitored by Comptroller General of Patents Designs and Trademarks (Ministry of Commerce and Industry).

• The registrations of trademarks are made under the Trademark Act, 1999 which is framed keeping in mind the regulation stipulated by the USPTO (United States Patent and Trademark Office).

• Make sure you select the exact class of trademark which accurately represents the goods or services of your business. This categorization is done on the basis of <a href=”https://www.uspto.gov/patents-application-process/patent-search/classification-standards-and-development”>classification guidelines framed by USPTO </a> (United States Patent and Trademark Office).

• Mindful search and approval is also required for the following if you intent to use them as trademarks: internet domain names, blogs and trade dress.

Factors contributing towards rejection of trademarks

By now it seems very clear that a trademark bears the responsibility of establishing a brand for your company. A trademark not only adds to the brand value of the enterprise but also mirrors the core ethics and values encircling your product or service.

Doesn’t it seem naturally instinctive to ensure proper protection and legalization of such a mark which bores so much of significance? Therefore it is expected of you to choose and select a trademark which stands approved strictly according to the trademark laws that too without any loop holes. Also the trademarks need to be valid enough to be able to pass under the scanner of the USPTO (United States Patent and Trademark Office).

A trademark attorney can be of great help whose expert guidance will help you sail through every scrutiny under the above mentioned approval measures. Hence a properly registered trademarks paves way for unfettered use of trademarks thus enhancing your business prospects without any legal apprehension.

Let us go through the factors which make your trademark registration liable for rejection

Avoiding terms carrying a broader sense to it

There are certain terms carrying generic connotations to it and find their use in common things. Therefore such terms must be avoided to be included in your trademark thus saving you a potential reason behind rejection. If you name your trademark using such terms, it makes your trademark vulnerable and prone to rejection by the USPTO. An example will make you clear of what is not expected from a trademark, suppose you wish to name a detergent product with a tagline of fresh and clean as a trademark. Such a trademark with common names and words will not be accepted.

Terms vivid in nature

Descriptive terms which over explain the product or service are not fit for approval as trademarks. Such terms are used with intent of superficially describing the product/ service giving it a surreal existence. These words are used as adjectives and hence indicative of unethical promotional agenda behind it. For example words such as wow, superb, amazing etc cannot find their way for approval as trademarks.

Terms creating illusions and misleading the consumers

There are certain terms which carry no authenticity and hence are deceptive in nature. Such terms play with the psychology of the consumers leaving them betrayed and cheated on false portrayal of products or services. For example a company dealing in dry fruits tries selling their stock of ordinary almonds as Gurbandi almonds are liable for rejection on grounds of deceit.

Terms inflicting insult or offense

Terms which can hurt or cause offense to any section of the society stands strictly unfit for validation as a trademark. Any trademark failing ethically and morally to find its use as trademark cannot stand for approval. Any term which is vulgar, derogatory or insulting in any way will surely be liable for rejection by the trademark authorities.

Terms pertaining to administrative sector

There is a strict no for use of official terms in the trademarks making it suitable for immediate rejection. No trademark should bear any kind of resemblance to symbols, logos or labels bearing official names or meanings such as flags, emblems etc.

Trademark strikingly similar to some other

If you accidentally happen to make a selection that appears similar to a trademark name already registered then that would also invite rejection of application. UPTSO follows a very rigid approach when it comes to comparing of trademark names with previously registered names. Not only does it take into consideration the name of the mark but also checks for the products or the services associated with the mark. Incase similarity of goods or services is found it simply rejects the application.

Stating the true owner without any ambiguity

A trademark is owned by either an individual or an entity therefore it is necessary to precisely state in the application as to who owns the trademark. Often it is observed that trademark ownership is either shown in the name of the enterprise or in the name of the individual heading the business firm. Therefore it is advisable to ensure whether the company stated is registered and stands firm on legal grounds. This measure aids in strengthening your legal claims in near future.

Avoid overlooking of official notices

It is not uncommon during the registration process for your application to revert back on grounds of minor faults and procedural issues. The returned application is accompanied with an official notice giving a detailed explanation as to what led to the delay in the process.

Therefore it is recommended that such notices should be dealt with prompt action and a suitable reply should be filed with the trademark office.

Trademark Registration For Dummies : What, When, Where And How

Last week, I met a friend who was extremely disturbed with the fact that he registered his brand in different classification of trademark. He also mentioned that he was working for last five years & was not aware of anything related to brand registration. He realized this fact when he saw others using his brand which he has put in his heart & soul in for five years.

We all would know or have heard numerous stories of these issues in our daily course of life. There is also another side of the coin in which we are sometimes little lazy or careless in not treating a brand as an asset. This leads to losing not only rights on your brands but also can make you go out of business.

Now the following question arises;

  • Is trademark really necessary? Why?
  • What will happen if we do not register our brand?
  • How to register a brand trademark
  • When to register?
  • Where to register it from?

1. What is Trademark
A trade mark is a unique sign which helps you to distinguish your business goods or services from others.Your brand are represented by a trademark and it is of two types:

In form of a logo

trademark-logoIn form of a Signature

tademark-signature

Through a registered trademark, you can protect your brand (or “mark”) by preventing others from using your brand.

  1. Who can Register Trademark?

Any person claiming to be the proprietor of a trade mark used or proposed to be used by him may apply in writing in prescribed manner for registration.  The application should contain the trade mark, the goods/services, name and address of applicant and agent (if any) with power of attorney, period of use of the mark and signature.  The application should be in English or Hindi.  It should be filed at the appropriate office from the state in which his company is registered.

  1. When to Register Trademark?

Every Trademark should be registered as soon as possible.  Primary reason would be once you have done all the hard to build a brand/ trademark & someone else would just copy. All of your hard work &resources put in to setup the brand will go down the drain.

  1. Where to Register a Trademark?
    trademark-registration
  2. How to Register your Trademark?

Typical Problems Faced During Trademark registration

  • Many Startups are not aware of the class in which they are doing business and when they file the application, they make the biggest mistake by entering the wrong details in the application form.
  • After filing the application they can use ™ which means that the trademark is under registration process and will be registered if all the further steps moves smoothly. Many of them just consider ™ as their final process and drops out in between just by using ™ and when they come to know that their business class is used by other with ® mark they regret for not knowing the whole process.
  • After the Examination report, the designed Trademark is either selected or objected which might be due to wrong/incomplete information or explanation.
  • If the Objection is replied with accurate explanation then the Trademark will be selected and will be given with a ® certificate but if it is not accurate then it will get objection again and you have to reply with the same again.

Conclusion

Registering your brand is not a difficult process. Getting the right knowledge leads you towards successful registration for your brand. After all points explained above figure out what you lacking behind and get ® mark on your business.

About the Author:

[Lokesh Sharma is Marketing Manager at QuickCompany.in a, leading website to register a Trademark in India.]

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In this episode of eLagaan Whiteboard Friday, the eLagaan team talks about what it takes if you wish to be a Director in a Company. The new Company Law has specified multiple new conditions and checks to ensure only right people act as Directors in Companies. The video also covers on other financial aspects and reporting norms to be followed and complied by Directors.

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In this episode of eLagaan Whiteboard Friday, the eLagaan team talks about how to go about converting a Private Limited into a LLP. It also looks at various tax and compliances that needs to be complied with, various restrictions the law imposes post conversion and possible areas which needs to be thoroughly examined before taking a call to convert.

Converting General Partnership Business into Private Limited [Whiteboard Friday]

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In this episode of eLagaan Whiteboard Friday, the eLagaan team talks about how to go about converting a Partnership into a Private Limited Company. It also looks at various tax and compliances that needs to be complied with, various restrictions the law imposes post conversion and possible areas which needs to be thoroughly examined before taking a call to convert.