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.