corporation, llc

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.

corporation, llc, llp

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.