Why form a Corporation
or Limited Liability Company?
Asset protection, privacy and tax savings.
How can a business person save tax dollars and
assure business privacy while protecting their
assets? First, and most importantly one must set
up a business entity other than a "sole
proprietorship". Probably, the best choices are
to incorporate a Nevada corporation or organize
an LLC (Limited Liability Company). These
business entities enable the business person to
conduct business while in most cases separating
their potential liabilities that go along with
doing business from their personal financial
matters.
Liability and Personal Asset Protection
Suppose your employee goes on a business
errand, perhaps a delivery, and an accident
occurs. Or, suppose you hit a bus full of
people and there are injuries and perhaps
deaths. If you are incorporated or operating
under an LLC, in most circumstances, the
business entity will be liable rather than you
personally. Consequently, if you lose the case,
then more than likely you will get to keep your
personal assets - your house, boat, car and bank
accounts etc. Perhaps this allows you to start
over and even avoid personal bankruptcy. Check
with your favorite injury lawyer to find out
just how much insurance is enough to protect you
from such a circumstance! These days insurance
even works to attract lawsuits. One of the first
items a commissioned lawyer checks before a
lawsuit is to see that you have a sufficient
amount of insurance or assets to cover the
suit.
Tax Savings
Most states impose income taxes on
individuals and on business entities such as
corporations and LLCs. These taxes run from 3.5%
to 9.6% depending upon the amount of money you
and/or your business entity make, and what state
you are located in. (State
Tax Rate Chart) Take a look at your last
year's state tax return for both yourself and
your business. And don't be fooled. State taxes
aren't deducted from your federal taxes, nor is
there a tax credit. Rather, it is only a
calculation which prevents you from paying tax
on tax. So, believe it, this is real money out
of your or your business' pocket.
Why incorporate in
Nevada?
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