Las Vegas: Pros and Cons of Forming an LLC Online Business
[Guest Post]
Nevada, and particularly Las Vegas is currently the leader in new business creation in the US. It is closely followed by Florida. Various reasons make some states more attractive for startups than others, including low corporate taxes, business-friendly policies, lower operation costs, etc.
New business creation leads to job growth and most startup activity is currently concentrated in those business areas offering new opportunities, especially e-commerce, online education, information, construction, and real estate. Declining startup rates are more prominent in the food trade, retail, and accommodation industries.
Forming a Las Vegas LLC
There are several advantages to forming an LLC in Las Vegas. The owners of an LLC, or limited liability corporation, are exempt from business liability on their personal assets.
The business formation process is easy, cheap, and fast in Nevada, making cities like Las Vegas a popular choice for startups. Resident businesses with a physical presence in the state of Nevada receive optimal tax benefits.
Additionally, LLCs are not subject to a minimum number of members nor a minimum sum for their corporate capitalization.
Corporate formality requirements in Las Vegas
To maintain the status of an LLC, a business must ensure that certain corporate formalities are maintained. Depending on the business structure, these include the company bylaws, ensuring annual shareholder meetings held, keeping of corporate minutes, and maintaining records of transactions.
Advantages of Forming a Las Vegas LLC
The owners and board members of a Las Vegas LLC are not listed in the public record. This means there is no personal connection if the LLC is ever sued. An LLC formed in the state of Nevada is a recognized business entity in all the US.
Another advantage of a Las Vegas LLC is that it is not subject to taxation on corporate shares or stock transfers. Nevada also has no personal, franchise, gift, business, occupation, or inventory tax. There is a payroll tax of less than 1 percent of gross wages.
The sole proprietor of an unincorporated business is liable for FICA tax of about 45 percent, but a Las Vegas LLC only pays 15 percent for a $50,000 net income.
In Las Vegas, an LLC can have an unlimited number of owners and investors, and none of these people are required to live in or do business in the state. LLCs can also choose a flexible income distribution policy, but the outlines must be outlined in the business’s operating agreement.
Annual meetings are required by the state, but members have the option of holding them anywhere else globally or via teleconference calls. The state does not provide information to the IRS about the stockholders or board members of any enterprise. If a company is not involved in fraudulent activities, no company asset list is required.
Nominee officers can stand in for the actual director of the LLC, adding another layer of privacy. This nominee has minimal authority to sign documents, cannot control corporate funds or operations, and a majority vote can remove that person if desired.
Disadvantages of Forming a Las Vegas LLC
In Nevada, and therefore Las Vegas, in the event of a bankruptcy or death of a member, an LLC is automatically dissolved. Therefore, a new startup that plans to go public or issue employee shares, should opt to form a corporation.
LLC formation services in Las Vegas
Incorporation Rocket offers a range of services and plenty of information for startups. One of the most important services for a new business is its formation. Since there are plenty of online business formation services available, they help entrepreneurs get a business started correctly and quickly.
In Las Vegas, forming an LLC requires the filing of the signed business articles of incorporation. Once the article of incorporation is filed with the Secretary of State, this can be done by phone or online, the business receives approval within 24 hours.
Choosing the best LLC formation service depends on the needs of the business owner. These cost far less than hiring an attorney and offer a range of services that go way past the formation stage.
Final take
Las Vegas is a city in one of the business-friendly states of the US, thanks to the state’s low regulation and favorable tax policies. These have helped to support its most recent economic development.