Registration of Businesses in the United States

By: Joseph J. Wielebinski

Mar 30, 2009

I. Introduction

It is very important for every professional that becomes involved in asset tracing and recovery in the United States (“U.S.”) to have a general familiarity with certain aspects of business registration, including: the various business entities that are recognized in the U.S.; the process for registering those business entities; the various governmental departments that keep corporate records; the process of how these files can be accessed; and the public disclosure of such records. This article therefore provides a brief overview of these aspects of business registration. 

II. Classification and Types of Businesses

A. CORPORATION

A corporation (abbreviated as “Inc.” or “Corp.”) is an organization formed under the authority of a state within the U.S., which acts as an artificial person, carries on business (or other activities), can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise capital. The primary benefit of forming a corporation is that it generally shields owners (in the form of shareholders), management, and employees from liability. An individual, a company, or a government may form a corporation. A corporation can take the form of a public, private (often termed a “closely held corporation”), charitable, or religious corporation. Each form of corporation has certain benefits exclusive to it.

B. PARTNERSHIP

A partnership is a business enterprise entered into for profit and is owned by more than one person, each of whom is a “partner.” It may be created by a formal written agreement, an oral agreement, or just a handshake. Each partner invests a certain amount of capital, establishes an agreed-upon percentage of ownership, is responsible for all its debts and contracts (even when another partner created the debt or entered into the contract), shares in the management decisions, and shares in the profits and losses according to his percentage of the total investment or ownership. 


Related Media