Limited Liability Company (LLC)

Liabilities for a C corporation are similar to the S corporation.

Limited Liability Company (LLC)

In the most basic of concepts, this is a company is a partnership company with corporate elements blended in. This type gives little liability to the actual owners of the company. In reality it is also not an actual corporation, rather it is an unincorporated association. While you are protected from most liabilities that arise, any fraudulent or misrepresentations are not protected as determined by a court of law. This also means any individual hiding behind an alter ego.

Most LLC can operate with the tax rules of either an S corporation or a C corporation depending on how the owner(s) prefer to have their income handled. Ideally handling it as an S corporation provides the best solution for most individuals considering a LLC when it to taxes. So a benefit is the pass-through taxation available.

The liability on a LLC is a little stricter than those of the corporations as well. While personal property cannot be seized for failure of the business to pay, the limited liability is only from a financial stand point. The following items are your biggest concerns of liability. The company results in bodily harm of any individual. You personally guarantee a loan for the company. Taxes for employees are not paid that you have withheld. Any illegal or fraudulent activity. Using the LLC as an extension of your personal affairs.

Sole Proprietor

This is the most simple of business structures. A sole proprietorship is an individual that is the business entity. This means there is no legal distinction between the individual and the company. Any profit or loss of the company is the tax responsibility of that individual, and they are responsible for all legal instances that arise as a result of their business.

A benefit to these types of business is they are very easy to start up. There are minimal regulations, and the owner has more of a say in how the company is run. However, it can be a financial burden for anyone attempting to run the company.

Most banks tend to shy away from loaning to sole proprietors, as they don't tend to be as successful as major corporations. Since the owner has the financial backing for the company they are legally responsible for all financial loans associated with the business.

Limited Liability Partnership (LLP)

Simply put this is a partnership where each of the partners has a limited responsibility in the company. Depending on what State you are opening one of these companies will determine the maximum number of partners you may have.

None of the partners in a LLP are responsible for the actions of the other partners, thus liability remains on a single partner for their business. However, as a whole they must elect one individual who maintains unlimited liability for the corporation as a whole. At the same time, each of the partners runs the business together as a whole.

All profits in a LLP are divided among the partners evenly, and they are responsible for income tax depending on the amount of income.

As a result of Limited Liability Partnerships in the United States, the Uniform Partnership Act was created to help govern the LLP as it moved across States.

Nevada corporation

Nevada is different from other States in several ways when it comes to a corporation. The legal system here offers you the ability to allow the board of directors to run your company while protecting you without piercing the corporate veil. There are numerous laws protecting businesses in Nevada that aren't seen in other States.

No matter where in the country you operate, if you are incorporated in Nevada you are protected by Nevada laws if anyone attempts to pursue legal action against your company. Nevada's law is very directly beneficial to the corporation, which has many safeguards in place to prevent costly unwarranted lawsuits to occur.

Outside of the $200 Business License Fee in Nevada you will not be charged franchise tax, corporate income tax or personal income tax by the State. This means outside of federal tax obligations you will have no additional tax liability.

However, crime especially theft is higher statistically in Nevada. As a result cases of employee theft and fraud are among the highest of anywhere else in the United States.