Why Nevada Is Perfect For Your LLC

Nevada LLCs Avoid Virtually All State Taxes

With your Nevada LLC, you can avoid virtually all state level taxes including:

No corporate income tax
No personal income tax
No franchise tax on income
No admissions tax
No unitary tax
No inheritance or gift tax

Just about the only fee you will have to pay is your initial filing fee and a yearly fee. This alone can save you thousands, if not tens of thousands, of dollars by setting up your LLC in the state of Nevada.

Nevada Has Strong Privacy Laws

The state of Nevada takes the privacy of you and your partners very seriously. That is why privacy standards in Nevada are so much more comprehensive than in other states. A Nevada LLC does not have to list it’s shareholders. This means your investors can remain anonymous!

Plus, unlike other states a Nevada LLC is not required to list it’s assets. This means they will not be linked to you publicly. The only connection to you will be on your federal tax forms which are protected by law.

Nevada LLCs Have Liability Protections That Are Rock Solid

You cannot be held liable for the debts incurred by your LLC. Creditors will not have access to your personal bak accounts or property to satisfy the companies debts. The only way around this is if the debts were linked to some kind of fraud perpetrated by you. This protection is also offered to you in order to protect you from the other partners in your LLC.

Because of these protections investors are much more likely to invest in your Nevada LLC over one operating in another state.

You don’t have to live in the state to have a Nevada LLC

Nevada allows you to operate an LLC within the state by using an attorney to act as your registered agent. They can forward all correspondence to you and sign for legal papers should the need arise.

Many people in other states use a Nevada LLC to safely keep possession of their assets. Along with the increased privacy protections a Nevada LLC provides this can be quite beneficial.

Dispelling Some Common Myths About LLCs

An LLC is not a corporation. It is created through a similar process by filing paperwork called articles of organization with the state. Since it is not a corporation it only limits the liability of the partners. To see if your situation warrants forming a corporation instead of a limited liability company you should consult an attorney qualified to discuss the options your company should take.

An LLC is not a tax entity. All profits and losses are passed on to the partners in full. You will need to include these in your personal tax forms.

Most people associate an LLC with a smaller business or a professional partnership like a doctor’s office. There are many large businesses that use the LLC structure including Amazon.

Disclaimer: The purpose of this article is to provide general information about this subject in order to give you a basis for discussion with your tax and financial advisers. I am not a CPA or an attorney. This document should not be construed as tax or legal advice.

A Good Business Needs A Good Plan

Turn on your television in the wee hours of the morning and you are likely to be bombarded with advertisements for fly by night companies trying to sell you on creating a Nevada corporation or a Las Vegas limited liability company through them. There is a reason these kinds of companies ads share the same time slots as spray on hair and other as seen on TV gimmicks. The services they are touting are nothing but junk and should be avoided. Your business deserves a qualified professional attorney who will work with you to develop a plan of action when creating your LLC or corporation. Do what hundreds of other satisfied business owners have done. Call on the law offices of Anthony L. Barney Ltd a Las Vegas attorney with plenty of knowledge and experience in setting up and maintaining an LLC or a corporation in Las Vegas.

When choosing which type of business entity fits your, and/or your partners, needs there are many different criteria to consider. Everything from which entity will give you the most favorable tax reduction to which entity will best protect your assets should be taken into account. Something that is often overlooked is how to best plan for the death of the business owner(s). All of this and more will be further investigated in the paragraphs to follow.

First we will start from the beginning. To set up your business entity you will be required to pay fees to the state and/or county in which you plan to operate. Fees for a corporation are much higher than they are for a limited liability company. In addition to the incorporation fees you will also be required to pay recurring fees to the state. Again, these will be higher for corporate entities.

The structure of a corporation requires several officers to perform duties that are not required by an LLC. These officers will be required to meet regularly and to keep detailed records of their meetings. This address burden often leads many perspective business owners to create an LLC instead of a corporation.

Most owners that overlook the extra work created by incorporating do so because of the tax advantages incorporating their business has to offer.

One major advantage of having a C corporation is that you can perform income shifting to lower your tax burden. In doing so a portion of the profits can be left in the corporation so they do not incur Social Security or self-employment taxes. This also can help by lowering the tax bracket of the shareholders, thereby reducing their tax bill by thousands of dollars each.

With an LLP or an LLC the profits are passed through to the partners and are taxed at their personal tax rates. This can add thousands of dollars to their individual tax bills. This is why it is important to work with an attorney who can help you structure your business in order to give you the highest tax savings possible.

Do you plan to sell your business or transfer ownership at some point? Transferring the ownership of a stake in an LLC requires the consent of the other partners. Generally this kind of consent is not required when selling it otherwise transferring the ownership of corporate stocks.

The assets of an LLC including permits and licenses each must be transferred individually while a corporation assets can be transferred asking with the corporation itself.

Both business entities protect their shareholder or partners from the liabilities and debts imposed on the company. There are also laws in place to protect stakeholders in both entities from the negative actions of a single partner.

Fringe benefits like health insurance are handled very differently in an LLC compared to a corporation. They generally will be treated and taxed as income with an LLC do to their passed through income status.  Employees of a C corporation on the other hand do not need to claim these kinds of benefits as income.

One way an LLC can be more beneficial than a corporation tax wise is in the ability of their partners to deduct losses on their personal tax forms. In doing so they can dramatically reduce their overall tax burden by lowering their individual tax brackets.

We hope this article has helped to better inform you on your decision to form either an LLC or a corporation in the state of Nevada. For further help we offer a PDF to assist you in creating a Las Vegas limited liability company. Remember, always consult an attorney before filling paperwork that will effect your business.

Should I Form An LLC Or A Corporation?

Every individual going into business will ask themselves if they should form a limited liability company or a corporation. There are many reasons to consider one or the other. The best thing you can do is contact a licensed Las Vegas attorney that specializes in the setup and planning of both LLC’s and corporations. Having good information on the subject is also important. Continue reading as we compare and contrast the two business types for you.

One of the leading reasons people set up either a corporation or an LLC is to limit their liability should the business be sued or go into bankruptcy. Both types of business entities are covered by laws that protect their owner or owners. If you’re business is failing the creditors will not be able to go after your personal assets such as your house or retirement account.

There are a lot of differences between corporation and partnerships. Right from the start there is the issue of how much money is required to setup both entities. A corporation is much more expensive to create. It is also more expensive to maintain as yearly fees paid to the state are often higher than they would be for an LLC or an LLP.

With a partnership you can escape many of the formalities associated with a corporation. With a corporation detailed minutes of shareholder and director meetings must be kept. There is also the fact that these parties must meet regularly at minimum intervals. Partnerships do not have any of these formalities to keep up with.

Another difference is in the types of taxes required by both entities. A corporation’s shareholders and employees must pay unemployment taxes on their salaries. Partnerships do not have this requirement. However, partnerships must pay self-employment taxes while corporate profits are not taxes in this way and have a lower corporate tax rate.

It is because of this difference in tax rates that many business owners chose the corporate model when setting up a business. By keeping a certain amount of the corporations profits inside the business you can dramatically reduce your overall taxes. Also, in leaving some of the profits in the corporation you may also lower your personal tax bracket. Another added bonus of having a Nevada corporation.

Having a corporation instead of an LLC can make it much easier to find funding and receive loans. Most investors are familiar with buying stakes in corporations. When investing in a corporation there is the added bonus that it will continue even in the event of a shareholders death. With an LLC this is not possible and all assets, permits and licenses held by the LLC must be transferred to any new business individually. With a corporation these kinds of assets are transferred with the business as a whole making it much easier for investors.

With an LLC you can include your business in a living trust. S corporation shares are difficult to include in a living trust. S corporations also cannot have more than 100 shareholders. Shareholders must also be a U.S. citizen.

An LLC had the option of being treated like a corporation for tax purposes.

Be sure to consult with an attorney that is well versed in business planning to assist you in choosing the right business entity for your needs. Also look for an attorney with experience in handling corporate litigation. This can save you from going through many hassles later on.

Creating An LLP vs. An LLC

As your business grows it is wise to begin looking into forming some kind of Limited Liability Company (LLC) or a corporation in order to protect you and any partners you may have from the company and its liabilities. In most cases this can also work to protect the company from the personal problems of you and your partners. But which type of partnership is right for your business? We will look into two types of partnerships. One is an LLC and the other is a Limited Liability Partnership (LLP).

First let’s look at the main differences between the two. A Las Vegas LLP is restricted to certain kinds of licensed professionals. These include doctors, lawyers and accountants, though other licensed professions can also form an LLP. Another way to reference an LLP is as a Professional Limited Liability Partnership or PLLP.

By forming an LLP each partner is protected from the debts and liabilities owed by their partners. However, the protection offered by an LLP is often less comprehensive than that offered by  an LLC. Typically an LLP is formed when state laws prohibit the partners from being able to form an LLC or a corporation.

Both forms of partnership are created by filling papers with the state and paying a filling fee. Both also require yearly registration fees.

Both partnerships don’t require extra tax filings as they are both use the pass through taxation method. Profits and losses will be recorded on the partners personal income tax forms.

Some key differences between the two are that an LLP is required to carry certain types of insurance and it is typically difficult to generate outside investment for the partnership with an LLP. Also, selling a piece of an LLP, or as a whole, can be difficult because of the partners involved.

When you are ready to begin the process of creating your own LLC or LLP in Las Vegas be sure to work with a Las Vegas LLC attorney that specializes in corporate law. You don’t want to go it alone when you are making some of the most important and far reaching decisions of your life. To get more detailed information on this topic please read our guide on maintaining your Nevada limited liability company.