With so many businesses moving overseas for tax advantages, cheaper labor, and other (financial) reasons, one is to wonder if there are going to ever be any more companies left in the states. Most small businesses don’t have that choice though, and have to do it the old fashioned way, high taxes and all. However, thanks to a sponsored post, I learned today that starting a business in Nevada has quite a few advantages over other states. Due to no state tax, no franchise tax, and minimum bureaucracy, Las Vegas is becoming a very popular place to start a small business.
Today’s sponsored post comes from IncParadise.com, whose total package for Nevada incorporation costs $283. I don’t know very much about incorporating a company, but from what I do know, it seems rather inexpensive. If you have your own Registered Agent, the total is only $194.
Not knowing much about the process and details, I was wondering what the differences were between a corporation and LLC, the difference between a “C” and “S” corporation, etc, so I headed over to their Corporation Entities FAQ page. Here’s an example of what they gave me:
What is the difference between INC and LLC?
“LLC” and “Corporation” have many of the same characteristics. The most important characteristic they share is that they both offer limited liability protection to its owners. Typically, shareholders are not liable for the debts and obligations of the corporation; thus, creditors will not come knocking at the door of a shareholder to pay debts of the corporation. In a partnership or sole proprietorship the owner’s personal assets may be used to pay debts of the business. With an LLC, the members are not personally liable for the debts and obligations of the corporation.
There are many important differences between the corporation and LLC. The entities are taxed differently. An LLC is a pass-through tax entity. This means that the income to the entity is not taxed at the entity level; however, the entity does complete a tax return. The income or loss as shown on this return is “passed through” the business entity to the individual shareholders or interest holders, and is reported on their individual tax returns.
With a standard corporation, the corporation is a separately taxable entity. Corporations are treated as a separate legal taxable entity for income tax purposes. Therefore, corporations pay tax on their earnings. If corporate earnings are distributed to shareholders in the form of dividends, the corporation does not receive the reasonable business expense deduction, and dividend income is taxed as regular income to the shareholders. Thus, to the extent that earnings are distributed to shareholders as dividends, there is a double tax on earnings at the corporate and shareholder level. We can do S Corporation status election with IRS for $25.
That will come in handy, I’m planning to start a business for liability purposes within the next few months. I live in Iowa though (soon to move to North Carolina.) Thankfully, they offer a page with every state and their respective charges for incorporation and registering an LLC, and even offer a place to fill out the paperwork.
As far as the website, each informational page is laid out in a simple way. This page where they show every type of company and how to create on is especially useful, and couldn’t get any simpler.
I’m bookmarking this one.
