Many business men are normally confused when it comes to choosing suitable business structures. For many deciding between a Nevada Incorporation (INC) and a Nevada Limited Company (LLC) is a daunting task. Choosing between a corporation and LLC goes way beyond simply deciding an abbreviation to appear at the end of your business name. The two business structures both have advantages and disadvantages that accrue to them. The two have a great impact on how your business will be taxed and its liability as a whole.
When you choose to establish a Nevada LLC there are some benefits you are bound to enjoy. Some of the benefits include the following:
Liability protection for you as the business owner-when you set up an LLC your personal property cannot be sold so as to pay off business debts. This is because your business is treated as a completely separate entity from the business owner. This therefore means that should your business run into debt then personal belonging such as cars, home cannot be sold to repay the debt.
The second benefit LLC owners get to enjo0y is that of lower tax rate. When you register your company as an LLC you enjoy a lower tax rate than you would if you registered it as a Nevada corporation. This is because with LLCs the business is treated as a different entity from the owner. With Nevada corporations however the case is not the same. A Corporation is taxed twice; once for the business venture and secondly for the shareholders themselves.
Thirdly, with LLC there is no need to file annual end year reports. This is advantageous in that it reduces the number of paper work require for the business. The same however cannot be said of Nevada corporation where filing of end year reports including minutes and shareholder notifications is obligatory.
Fourthly when you establish a Nevada LLC you are bound to enjoy a business venture with less regulations and requirements. This therefore makes this venture flexible compared to Nevada corporations. Corporations have many rules and regulations guiding their formation and operation.
Above all it is prudent to remember that the costs of establishing LLCs and corporations differ from state to state. There are states in which forming an LLC is a cheaper option and vice versa. Before deciding on what structure to adopt for your business it is advisable to find out from the relevant authorities what the costs are. |
