Corporate law in the United States

The Company Law of the United States deals with the measures provided for in the United States of America for companies legal forms. The federal system of the United States allows each state to develop its own legislative corporate law. Thus, the possible forms of society from state to state differ significantly. A standardization can only be found among the smaller states whose laws conform to the Model Business Corporation Act.

Corporation

In particular, the corporations known as the corporation have significance for the economy. Firstly, most large American companies are organized as a corporation, on the other hand some of the American society shapes as cover for their own transactions are popular because they can limit the liability of the person acting on the company's assets without the strict raising of capital provisions of the German, Austrian or Swiss company law.

The Corporation is distinguished in particular by the fact that the liability is limited to the corporate assets ( limited liability ) and the company remains at the death of the founder and shareholder addition ( perpetual lifetime).

Companies in the U.S. that have been registered in the commercial register by the applicable corporate law of a local state are considered to be incorporated. It is not imperative that a company has its registered office in the state in which it was registered (foundation theory).

The legal capacity of a corporation under U.S. law is recognized by the German legal system by virtue of the German - American Friendship Treaty of 29 October 1954.

Etymology

Corporation is a derived from the English term that is often used as an additive in the company name. This is also an abbreviation in the form of Corporal. or Inc. (incorporated ) applied. Microsoft Germany GmbH for example, is a subsidiary of Microsoft Corporation. In the vernacular is meant by Corporation only a joint stock company, which is listed on a stock exchange, but this is not always true. Rather, it can be sought as at RAND Corporation no profit.

The word comes just as the German term from body from the Latin word corpus (body). A Corporation is a corporation, therefore, that is a community of people (society) or a person representing this institution with its own legal personality (legal entity ).

In England, the institution that took care of the administration of a municipality, corporation was called. This was reversed in 1973 and only the Corporation of London bears this name.

Shares

Corporations can be for-profit or non-profit corporations. In the for-profit Corporation, a distinction between authorized shares and issued shares. All shares, the number of which is specified in the Articles of Incorporation, be authorized shares call. The so-called issued shares are those shares that have actually been adopted by shareholders. The shares must have no par value.

The non-profit corporations, the so-called "Non -profit Corporations ," thereby giving out any shares. As a " non-profit corporation" occur, for example, foundations, churches and other nonprofit organizations.

Types and forms

  • Public or publicly traded is a corporation whose shares are listed on a stock exchange where they are traded. These include the most Corporation in the USA.
  • The majority of corporations are private or privately held or close corporations or closely held and are therefore not publicly traded.
  • Another form is mutual benefit corporations, whose aim is to act in the interests of its shareholders. Examples include golf or tennis clubs who buy sports facilities as a corporation within the meaning of the members and operate.

Difference Incorporation - Corporation

The term " incorporation" is often used erroneously as the long version for Inc.. Properly, however, is " incorporated ", the appropriate form of society is a " corporation". As incorporation only the development process is to understand ( the foundation ) of the corporation.

Limited Liability Company ( LLC)

The Limited Liability Company ( LLC) is a special form of corporation in the United States, which is roughly equivalent to the German GmbH. The Limited Liability Company no member is personally liable. A limited partnership has both natural and legal persons. The tax treatment shareholders have an option model. Thus, the LLC can be taxed as a corporation, or the relevant dividend is taxed at the personal tax rate of the shareholder. Depending on the statute, the partners may cause the LLC itself without the establishment of a management body or insert a line. Due to the partners' agreement, the design possibilities LLC is mainly in the area of ​​small and medium-sized enterprises use.

Limited Liability Partnership (LLP )

The Limited Liability Partnership ( LLP ) is a legal form of companies according to English / U.S. law. Most likely this form of society is a limited partnership without complementary: compare (better unit GmbH & Co. KG ). The difference with the Limited Liability Company ( LLC) is that the shareholders may exercise the management directly. Equally, however, as in the case of a corporation, they do not have to renounce the comprehensive liability protection. In addition, this legal form can be designed as a partnership for tax purposes also.

Frequently encountered this type of society in the freelance sector, such as at law firms, accountants, tax consultants and architects ( firm, partnership company), especially because in some U.S. states, such as New York and California, this form of society is only open to certain professions.

Individual states

Delaware

The state of Delaware has a different from the other U.S. states, very liberal company law (Delaware General Corporation Law ). There are several positive advantages for the founder and shareholder of a corporation under the laws of the State of Delaware:

The establishment of a U.S. corporation under the laws of Delaware is possible in writing from any place in the world. It can be a one-man company or be established with multiple shareholders. There is no minimum capital required. Normally 1500 shares of no par value to be drawn, then, the share capital amounts to zero dollars.

The founder respectively shareholder may also be president (President), Treasurer ( Treasurer ) and Secretary ( Secretary ) in a person. The purpose may also be formulated briefly very wide, though. You must only comply with the Company Law of Delaware.

The importance of the liberal corporate law of the State of Delaware arises from the fact that more than 850,000 businesses are registered in that State, including very well-known and large global companies such as The Coca -Cola Company, General Motors, Google, Walt Disney Co., McDonald 's Co. or Goldman Sachs Group Inc. More than half of all publicly traded companies in the United States and 63 % of the Fortune 500 have their legal seat in Delaware. Derived from a settlement strategy is called by favorable legal forms in Germany and Delaware effect.

Florida

Florida is a founding state very liberal. It can be used as a one-man company multiple holding positions such as President, Treasurer or Secretary. Any natural person over 18 can form a company in Florida and take any position in the company.

For the foundation, it does not require notarization, as is usual in Germany. There is also no minimum capital required, the company may be established without share capital. The shareholder / shareholders are not entered in the commercial register and thus can remain anonymous. In the LLC 's founding in Florida also eliminated the Florida State Income Tax, should be allowed to classify the LLC as a partnership. Although this should not happen, you would pay a low tax rate of only 5.5 % to the state of Florida. In addition, the Federal Income Tax for each state, which varies between 15% and 35 % depending on income.

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