NEVADA LLC FORMATION PROCEDURES
WHY FORM AN LLC
1) Limited Liability of the owners:
This means none of the owners (known as 'members') is personally liable for business debt of the LLC. Therefore, you are not liable for any obligations or court judgments obtained against your LLC. Thus your personal assets are safe unless you personally guarantee a debt. It offers its members all the liability protection of a C-Corporation.
2) 'Pass Through' of profit and loss:
All the profits and losses of the LLC are taxed on the member's personal income tax returns. Meaning if you are a single member of an LLC, you will report the profit or loss of your LLC in your form 1040. As such, an LLC offers the benefits of a regular Corporation without separate taxation. As with a partnership or a Sub-S corporation an LLC is a Tax Pass through entity.
What this means is: LLCs do not pay taxes. All income and losses pass-through to you as a member. So if you have losses in your LLC you can claim it against your personal income on your individual 1040. It is great for a start up business.
3) Ability to easily change to another form of entity:
It's easy to change your LLC to another form of legal entity. For example, you can change it to a C-Corporation. If you are starting a company, it may be beneficial to start a company as an LLC and write off the initial losses from your personal income and change to a C-Corp when the company becomes profitable.
4) Flexibility while allocating profits or loss:
This is a major benefit of an LLC. Unlike a Subchapter S Corporation where you are restricted as to how profit and loss are distributed among the owners and the type of losses you can pass-through to the owners, the members of an LLC can allocate ownership, profits and loss among the members anyway they like. In case of a C-Corporation, the profits and loss of the corporation cannot be allocated among the shareholders.
WHY NEVADA LLC
Nevada has surpassed Delaware in LLC formation. Last year over 40,000 corporations were formed in Nevada and LLCs are gaining grounds as the popular form of corporate entity in Nevada.
Below are a few reasons we think Nevada is one of the best places to set up your LLC:
1) Simple to set up and manage: As your Resident Agent we can set up your Nevada LLC with the information you provide on the one page form while ordering. Minimal paperwork requirement to run the entity.
2) No state tax in Nevada
3) Universal Eligibility: You do not have to be US citizen to form an LLC in Nevada
4) Single member LLCs are allowed
5) Flexibility in location: You can have provisions in your Operating Agreement allowing you to have offices (whether commercial or home-based) outside the state of Nevada. We include it by default
6) Privacy: The state of Nevada does not share information with the IRS.
7) Asset protection: Nevada is one of the toughest states in which to pierce the corporate veil.
8) Corporate Ownership:
A Corporate entity (such as a corporation) can own an LLC unlike in case of an S-Corporation. In fact an LLC can be owned by a corporate entity formed anywhere in the world.
9) Same-Day Creation:
Nevada allows you to set up your LLC same day. We are able to offer you this service because we are located where the Nevada Secretary of State's office is located.
Overall, we think an LLC is a better option for start-ups, online, e-commerce and home-based, small and medium size businesses and for personal privacy purposes.
STEP BY STEP TO FORM A NEVADA LLC
1) As soon as we receive your order, we check for availability of your name. If none of the 3 names you specify is available, we will call or email you.
2) After finalizing the entity's name we prepare your Articles and file it with the Nevada Secretary of State. If you need expedited service, we personally go to the Secretary of State's office in Las Vegas to file. If your order is received after 4 PM Pacific time we file it the next day.
3) From the Secretary of State's office, we receive (in case of expedited service, we personally pick up) your Charter and the filed copy of your Articles.
4) We help you get your Employer Identification Number. (Federal Tax ID).
5) We help you open your Las Vegas business bank account, if needed.
6) Next we file the Initial List of Officers with the Secretary of state.
7) We prepare your Operating Agreement/ ByLaws.
8) After that we can provide you with various services as needed: Telephone answering service, trust or will fcreation, obtaining Nevada business license etc.
Below are the five documents you will need to know about:
1) Articles of Organization: We prepare and file it with the Nevada Secretary of State to create your entity.
2) An Operating Agreement: This is the agreement describing the formation and provisions of the LLC. We do it for you.
3) IRS Form SS-4: To obtain the Employer Identification Number/ Federal Tax ID: We help you obtain the Tax ID instantly online from the IRS.
4) List of members: We file it with the NV Secretary of State. The fee to file this is already included. If you choose us to be Nominee Manager for your privacy, the Nominee's name will be on this form instead of yours.
5) S-Corp Election: If you are forming a Nevada Corporation (yes, we do form Nevada corporations) and you want it to be an S-Corp, you must file the S-Corp election form with the IRS within a specific time. Send us an e-mail for details.
TAX FORMS YOU WILL NEED
A Nevada LLC doesn't have to pay Nevada state taxes and is not required to file for Federal taxes. However, your LLC will have to file a form with the IRS yearly. The form shows the profits or losses of the LLC and how the profits or losses are divided among the members.
Therefore, if you are the only member of the LLC, you will report the profits or losses on Schedule C as part of your individual Form 1040 tax return.
If you have other members in your LLC, you will be taxed as a partnership by default. In this case the LLC will have to file IRS Form 1065 to report the profits and losses of the LLC. Each member of the LLC is issued a Schedule K-1 by the LLC that shows the member's share of the profit or loss. The amount shown in the K-1 has to be reported on the member's individual form 1040.
Your LLC can also elect to be taxed as a C-Corporation. IRS Form 8832 allows you to do so. If you elect to be taxed as a corporation you will file form 1120.
For an explanation, please see IRS publication Regarding LLC Taxation.
Please consult a tax adviser to determine your individual situation. Or we can provide you a local Las Vegas tax professional at a good rate. Please let us know. If you are not a US Citizen and do not live in the USA, you can still form a Nevada LLC but you don't fall under the above requirements.
NEVADA LLC FORMATION AND MAINTENANCE FEES
Name availability search, name reservation, preparation and filing
of the Certificate of Formation (including all filing fees), preparation
of members register, issuance of membership interests, preparation
of LLC operating agreement, liaison with client.
Each LLC is provided with a filed copy of the Certificate of Formation,
standard LLC operating agreement, Form 8832 (Entity Classification
Election) and Form SS-4 (Application for Employee Identification
Our Nevada LLC service also includes the provision of a company
kit which contains member certificates, company seal, member transfer
ledger and a register of members.
Annual Maintenance US$525
Payment of annual filing fee, providing Registered Office and Registered
Agent services including forwarding of LLC Tax Notice.
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