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May232011
Different Forms of Nevada Incorporation
Monday, May 23, 2011 at 12:36PM
Different Forms of Nevada Incorporation
Knowing the advantages of Nevada incorporation lets you make an informed decision as to whether or not it will be right for you and your business. Also knowing the different types of corporations that you can form for your company will help you choose the best and most productive path to take for your business concerns. There are several different routes you can take when forming your business into a corporation. It would be wise for you to research each type of corporation and its advantages and disadvantages before making a choice and filing the paperwork.
If your Nevada incorporation is to be a non-profit organization then you will certainly find that the state is good for such a business. Non-profits are generally charitable organizations which are exempt from state and federal taxes and since Nevada has no state income taxes to begin with, it’s easy to setup a non-profit here. Then you have limited liability companies (LLC’s) which grant their owners and shareholders (investors, backers, etc…) protection from liability should the corporation fail or be sued. If the corporation is unable to pay its debts, the owner is not liable thus personal assets are safe and protected.
The other two types of Nevada incorporation are a bit more complicated. You have S corporations and C corporations. They are formed in nearly the same way with the S corp. only needing to file an additional form with the IRS to declare special tax status. C corporations must pay corporate taxes whereas S corporations elect to have special tax status that allows them to pass the earnings of the company directly to the shareholders who then pay taxes on the money as income. C corporations must pay corporation tax and then the income dispersed to shareholders is taxed again, resulting in the phenomenon known as double taxation which can be an unattractive prospect to business owners and shareholders alike. Since Nevada doesn’t have state income tax, they don’t recognize S corporations, though.
Knowing the advantages of Nevada incorporation lets you make an informed decision as to whether or not it will be right for you and your business. Also knowing the different types of corporations that you can form for your company will help you choose the best and most productive path to take for your business concerns. There are several different routes you can take when forming your business into a corporation. It would be wise for you to research each type of corporation and its advantages and disadvantages before making a choice and filing the paperwork.
If your Nevada incorporation is to be a non-profit organization then you will certainly find that the state is good for such a business. Non-profits are generally charitable organizations which are exempt from state and federal taxes and since Nevada has no state income taxes to begin with, it’s easy to setup a non-profit here. Then you have limited liability companies (LLC’s) which grant their owners and shareholders (investors, backers, etc…) protection from liability should the corporation fail or be sued. If the corporation is unable to pay its debts, the owner is not liable thus personal assets are safe and protected.
The other two types of Nevada incorporation are a bit more complicated. You have S corporations and C corporations. They are formed in nearly the same way with the S corp. only needing to file an additional form with the IRS to declare special tax status. C corporations must pay corporate taxes whereas S corporations elect to have special tax status that allows them to pass the earnings of the company directly to the shareholders who then pay taxes on the money as income. C corporations must pay corporation tax and then the income dispersed to shareholders is taxed again, resulting in the phenomenon known as double taxation which can be an unattractive prospect to business owners and shareholders alike. Since Nevada doesn’t have state income tax, they don’t recognize S corporations, though.
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