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Nevada Business Renewal

Date: 10/01/2019 | Category: | Author: Martin Pouzar

NEVADA BUSINESS RENEWAL

If you are planning to register your new business in the state of Nevada, you will be required to obtain business licenses or state permits as part of the business registration or start-up process. The important aspect is that if you already have a license or permit then Nevada business licence renewal is integral towards ensuring your business remains operational.

INSIGHT INTO NEVADA BUSINESS LICENSE

In some states, business licenses or permits are not required by all types of business entities. In the state of Nevada, a business license can vary according to the type of business. The different categories of Nevada business licence include:

  • General License
  • Privileged License (valid for liquor and gaming)
  • Regulated License

One of the important aspects of a business license is that the type of business and the location of the business will determine whether you require a state license only or a state and county license. There are some businesses that may not require a Nevada business licence at all and can make their business operational by applying for a permit.

A new business registering in Nevada has to check with the State Department of Taxation for determining whether a retail sales permit is required or not. If the type of your business requires applying for city and county licenses then they have to be obtained from the county clerk office or state departments in the city.

License Renewals

Whether you have a license or a permit, it needs to be renewed annually. The Nevada business licence renewal fee is $500 annually for Corporations. The fee is $200 for other types of business entities including a Limited Liability Company. Normally, it is due on the last day of the anniversary month in which the business has originally filed for its license but the same is not true for Title 7 entities.

Nevada business licence renewal date for Title 7 entities like Domestic Corporation or Limited Liability Company will coincide with the due date of filing the Annual List or Annual Report. Similarly, the licence renewal date for sole proprietors and partnerships will be prior to the expiration date that is listed on the business license.

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Annual Requirements for Nevada LLC

Every business formed or registered in the state of Nevada will be required to meet certain annual requirements to enjoy an active status.

If you are planning to form an LLC in Nevada or have already registered your Limited Liability Company, one of the essential characteristics of ensuring smooth business operation is preparing and filing different documents within the due date. As an LLC, you will be required to file Nevada annual report also known as the Annual List and apply for renewal of business license.

Annual List

The Nevada annual report or the Annual List is a document that contains information regarding the business as well as its activities through the previous year. The fee for filing of the Annual List is $150. According to the Nevada Revised Statutes § 86.263, the annual list contains:

  • The name of your LLC
  • The file number of your LLC
  • The names and titles of all managers or managing members
  • The addresses of each of the managers or managing members

Note: If an LLC is unable to file within the due date then they will be charged a late fee of $175. The LLC may also lose its ‘good standing’ status in Nevada.

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Nevada State Business License Renewal

Any Limited Liability Company registered in the state of Nevada will have to file for Nevada business license renewal along with a fee of $200.

One of the important considerations to make is that the Nevada business license renewal fee in counties may be different as there are almost 400 different categories of business activities. Apart from this, counties like Clark County have gross fee license and flat fee license. The renewal fee for “gross fee license” is determined by the amount of gross revenue that has been generated by the said business. The flat fee for license renewal uses a flat rate or it can be determined by numbers like number of rooms in a hotel.

The Nevada business license renewal period in counties is different from that of state licenses. The renewal period in Clark County can be monthly, quarterly, semi-annually and annually depending on the type of license or business.

Note: If an LLC is unable to file within the due date then they will be charged a late fee of $175. The LLC may also lose its ‘good standing’ status in Nevada.

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Annual Requirements for Nevada Corporation

Every business formed or incorporated in the state of Nevada have certain annual requirements that ensure businesses can enjoy a good standing status in the state.

If you are planning to incorporate in Nevada or have already formed a business corporation then in order to ensure your business remains operational, you will be required to prepare and file specific documents annually. As a business corporation, you will be required to file Nevada annual report also known as the Annual List pursuant to NRS 78.150 (2010). Another annual requirement is the filing of business license renewal.

Annual List

A business corporation is required to file the Nevada annual report on or before the last day of the anniversary month of incorporation. The fee for filing of the Annual List is $150. However, the annual list fee for business corporations can vary according to the total number of shares mentioned in the articles of incorporation.

Example: The fee is $150 for shares of $75,000 or less but if the shares are over $1,000,000 then the fee is $400.

The Nevada annual report or the Annual List is a document that contains information regarding the business as well as its activities through the previous year. According to Nevada Revised Statutes § 78.150 (2010), the annual list contains:

  • The name of your business corporation
  • The names and titles of all president, secretary and treasurer
  • The addresses of each of the president, secretary and treasurer

Note: If a business corporation is unable to file within the due date then they will be charged a late fee of $175. The entity may even lose its ‘good standing’ status in Nevada.

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Nevada State Business License Renewal

Although, Nevada business license fee is $500 for initial filings as well as annual renewals; you should check with respective state departments for exact fee amount for permits. The fee will be different for different types of businesses like the fee for business permit for a 40-seater food establishment is $200 but for a bed & breakfast facility, it will be $166. You may also require special permits from other local authorities like Building, Health, Police, or Fire Departments before making your business operational.

Note: If any business entity fails to file their annual Nevada business license renewal fee as required by the due date then there will be a penalty of $100 apart from the annual fee.

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Convert LLC to S Corporation

Date: | Category: | Author: Martin Pouzar

CONVERT LLC TO S CORP

A Limited Liability Company is one of the most popular forms of business because of the limited liability and tax benefits that it enjoys. If an LLC is single owner then it will be taxed as a sole proprietorship and if it has multiple owners then it can be taxed as a partnership or even a corporate entity. You can also choose to convert LLC to S Corp, so that it can enjoy various tax benefits like “Pass-through Taxation”. Let’s try to understand why the conversion to S Corp is beneficial for businesses and how it works.

Why Consider Converting LLC to S Corp?

You have registered your business entity as an LLC, why should you switch to an S Corp? Will it be beneficial in any way? One of the governing factors is the self-employment tax. When the income of your Limited Liability Company increases due to higher profits, there will be an increase in the self-employment tax as well. Although, you are paying higher tax, the ability to contribute to any retirement account will not change and hence, when you convert LLC to S Corp Nevada, there will be definite advantages. Let us take a look at some advantages of converting LLC to S Corp.

S-Corp Distribution

If you convert LLC to S Corp then you will be able to classify a part of your income as salary and a part as distribution. You will still be required to pay self-employment tax on the salary part of your income, but the distribution portion will draw only standard income tax. At the end of the day, how you divide your income will determine if you pay a higher or lower self-employment tax.

Savings from Self-employment tax

When you convert LLC to S Corp Nevada, there are several advantages and this is one of the most sought after. When you have a Limited Liability Company, the income will pass through to you or the owner and this income will attract 15.3% self-employment tax. If you or the owner of the LLC resides in a foreign country then you can benefit from the “Foreign Earned Income Exclusion” but it will minimize your income tax and not the self-employment tax. The moment you convert to an S Corporation, you as the owner can classify a part of the profit as salary and then minimize income tax through the “Foreign Earned Income Exclusion” program. At the same time, the rest of the profit will draw Self-employment tax, the amount of which would be much less.

Retirement savings with S Corp

One of the big advantages of conversion of LLC to an S Corporation is that you will be able to contribute a higher amount towards retirement accounts as having an S Corp helps in setting up of the “Solo K” or the individual 401K. Let us check some of the retirement savings options available when you convert LLC to S Corp Nevada.

  • Solo K – This is also known as the “Individual 401k” or i401k. Normally only those people who have an income that is less than $120,000 are allowed to contribute around $5,500 to a 401k/Roth IRA. The salient aspect is that when you convert LLC to S Corp, you can opt for the Solo 401k wherein you will be able to contribute a maximum of $18,000. Apart from the Roth Solo 401k, you can also contribute a maximum of $36,000 to a traditional Solo 401k. It is important to remember that the contribution is dependent on your salary.

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When you should consider converting your LLC to S Corp?

Once you have taken a decision towards converting your LLC to an S Corporation, what is the next step? It is important to identify the right time for this conversion. The primary reason why businesses convert LLC to S Corp in Nevada is to enjoy tax benefits.

The best time to convert your LLC to an S Corporation would be when the self-employment tax seems to be exceedingly high. If you have a net income of $40,000 then it would be right to convert LLC to S Corp. The decision for conversion is dependent on specific circumstances and several factors like:

  • This is definitely one of the important aspects that you need to consider. You can elect for being taxed as an S Corporation only if you convert LLC to S Corp within 2 months and 15 days after the beginning of the tax year.
  • It is important to focus on the type of business you have. It is an important factor as businesses offering services will be able to benefit from the ability to take a qualified business income (QBI) deduction as well as meet the reasonable salary requirement.
  • One of the factors that will help decide when to convert LLC to S Corp Nevada is the net business income. You have to identify if your net business income is below or above the 2019 Social Security wage base, which is $132,900. If it is above the wage base then as an S Corporation, the owner or shareholder will be able to apply for a 20% QBI deduction.
  • If you convert LLC to S Corp and qualify for “Foreign Earned Income Exclusion (FEIE)” then as the owner, you will be able to exclude a maximum of $104,100 (2018) of their salary from the income tax.

Thinking of LLC to S Corp Conversion? Speak to our Top Expert on Conversions at 702-871-8678.

How do I Change a Nevada LLC to S Corp?

Conversion is a process that will allow a business entity to change the type of entity or even the state of formation or incorporation. This simply means that if you own a Nevada LLC then it can be converted to a C Corporation or an S Corporation. If you choose to convert LLC to S Corp in the state of Nevada then the good news is that the state does not require you to dissolve the existing entity (LLC) for purposes of conversion. Instead, the process of conversion is considered to be just a continuation of the business entity undergoing conversion.

What is the process of converting a Nevada LLC to S Corporation? How does the process work? We have created a guide to help you understand this process.

Conversion Plan

One of the first steps to convert LLC to S Corp Nevada is to create a conversion plan pursuant to NV Rev Stat § 92A.105 (2013). The conversion plan includes specific information like:

  • Name of the LLC electing S Corp conversion
  • Proposed name of the S-corporation
  • State of formation or registration of the LLC
  • Jurisdiction of the law that will govern the resulting entity
  • Terms and conditions related to the conversion
  • Complete text of the incorporation or charter documents of the resulting business entity

The conversion plan should lay emphasis on how the ownership interests in the existing LLC will be converted to the ownership of newly elected S-corporation.

Conversion Voting

Once you have created a plan of conversion, the next step is voting. If you are planning to convert a domestic LLC then the voting to convert LLC to S Corp will be governed by NV Rev Stat § 92A.150 (2013). The plan of conversion has to be approved by those members that own majority of the interest in the current profit of the LLC.

Articles of Conversion

To convert LLC to S Corp Nevada, the plan of conversion has to be approved. Once it has been approved, the resulting business entity will be considered to be a domestic entity and will have to file the following documents with the Nevada Secretary of State pursuant to NV Rev Stat § 92A.205 (2013):

  • Articles of Conversion and it should set forth the name as well as jurisdiction of organization of the constituent entity and the resulting entity
  • The approved plan of conversion to convert LLC to S Corp as adopted by the constituent entity in compliance with the law of the jurisdiction governing the constituent entity
  • Location of plan of conversion, as in whether it is attached with the Articles of conversion
  • The charter or incorporation document of the domestic resulting entity (S Corp) as required by applicable provisions of chapter 78, 78A, 82, 86, 87A, 88, 88A or 89 of NRS
  • The information required pursuant to NRS 77.310, which is name and address of the Registered Agent appointed for service of process.

Conversion Fee and Submission

The fee for filing Articles of Conversion is $350 and it has to be mailed to the office of the Nevada Secretary of State in Carson City. The articles can be submitted through regular as well as expedited mail. In order to convert LLC to S Corp Nevada in the fastest possible time, you can also submit the documents physically at the counter, through fax, and online. You need to provide the “ePayment Checklist” along with the articles.

Note: It is important to provide a forwarding address so that the office of the Secretary of State of Nevada can send copies of process.

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Process of changing an LLC to a Sub S Corp

The subchapter S Corp is basically a closely held corporation that is taxed under the Subchapter S of Chapter 1 of the Internal Revenue Code (IRS) while a Limited Liability Company (LLC) is an entity that is formed under the Nevada State Law. If you own an LLC, you can change the entity’s tax treatment to that of a Sub S Corp without conversion to a corporation. If you wanted to convert LLC to S Corp for tax purposes only then how would the process work?

S Corp for Tax Purposes Only

If you have elected to convert LLC to S Corp Nevada for tax benefits then the process for the same is as follows:

Step 1: File Form 8832

You will be required to file form 8832 with the Department of the Treasury, Internal Revenue Service, so that your LLC can change their default tax classification, which is to be taxed as a Corporation.

Step 2: IRS Form 2553

When you convert LLC to S Corp, you will be required to file IRS form 2553 pursuant to section 1362 of the Internal Revenue Code. This form outlines specifics for qualification of an S Corp and for election to be an S corporation. According to the IRS, business entities eligible for S Corp treatment will be considered as domestic companies that have no alien members, should have fewer than 100 owners/members, and should have one type of stock.

Step 3: File Form 2553

To convert LLC to S Corp Nevada so that your company is taxed as a corporation, you will have to file form 2553 with the Department of the Treasury, Internal Revenue Service. If this form is filed along with individual tax return then the S Corp election will be effective for the tax year for which the return is being filed. If the form is not filed within 2 months and 15 days from the start of the entity’s tax year then the S Corp election will not be effective till the next tax year. Example: If your tax year starts on June 01, 2019 and you are unable to file by August 15, 2019 then the S Corp election will not come into effect till June 01, 2020.

Conversion or Merger

The process to apply for tax benefits if you merge or convert LLC to S Corp is:

Step 1: Business Entity Conversion Form

You need to submit a Business Entity Conversion Form specific to the state.

Step 2: Effectuate a Merger

In a situation where single conversion forms are not available, you will be required to incorporate a new entity and then merge the LLC into the new entity. This process helps in achieving the same effect. The tax basis will be determined by how the interests or assets of the LLC are transferred to the new entity.

Step3: File Form 2553

In order to convert LLC to S Corp or elect S Corp tax status, you will be required to file form 2553.

Are you looking to convert your LLC to S Corp?

IncParadise can help you to convert LLC to S Corp or help you select Subchapter S for ensuring you enjoy tax benefits. We have a team of experts with knowledge of conversion, merger, and S Corp election process. We are one of the top and reliable agents in the state of Nevada and have a reputation of ensuring “customer satisfaction” and “client empowerment using knowledge for better decision making” is our top priority!

We have successfully initiated formation or incorporation of over 10,000 business entities, both foreign and domestic in the Country. Call us today at 702-871-8678, so that we can guide you through the process of converting your LLC to S Corp Nevada.

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Corporation Article Incorporation

Date: | Category: | Author: Martin Pouzar

NEVADA CORPORATION ARTICLE OF INCORPORATION

Thinking of registering a new start-up in Nevada? If you have chosen to register a business corporation then the foremost requirement is to file Nevada articles of incorporation pursuant to 2010 Nevada Code, Chapter 78 for Private Corporations.

What is Article of Incorporation for a Nevada Corporation?

A Nevada Corporation can be formed by one or more persons and will be legally recognized only when a business entity takes necessary steps to incorporate while following the corporate law (2010 Nevada Code-Chapter 78 Private Corporations). You can incorporate a business by filing the “Articles of Incorporation”. What are the Nevada articles of incorporation?

Articles of incorporation are also known as the certificate of incorporation or a corporate charter in different states. It is a document that is meant to establish that the fact that a corporation exists in the nation. The Nevada articles of incorporation are such a document that provides an outline of the basic information, which is required to a corporation in the state. The document also provides information pertaining to the governance of the said corporation as well as the corporate statutes of Nevada.

In the state of Nevada, the articles of incorporation are filed with the office of the Secretary of State.

What Information is Included in an Article of Incorporation?

A Nevada Corporation can be formed by one or more persons and will be legally recognized only when a business entity takes necessary steps to incorporate while following the corporate law (2010 Nevada Code-Chapter 78 Private Corporations). You can incorporate a business by filing the “Articles of Incorporation”. What are the Nevada articles of incorporation?

The article of incorporation is an important document but what type of information does it contain? It is important to understand beforehand that the information included in this document is “public record” and hence accessible to anyone. The required provisions of Nevada articles of incorporation are governed by 2010 Nevada Code, NRS 78.035 and it should contain the following information:

  • Name of the corporation – If you are planning to file Nevada articles of incorporation then your business entity requires a name. The corporate name should be distinguishable from any other names that exist in the records of the Secretary of State. The name of a corporation and the requirements are governed by 2010 Nevada Code, NRS 78.039. A corporate name should contain words such as “Incorporated,” “Company,” “Limited,” and abbreviations like “Inc.,” “Ltd.,” or “Corp. You can reserve the name of your business for a period of 90 days using the Name Reservation Request Form pursuant to 2010 Nevada Code, NRS 78.040.
  • Registered Agent – You will be required to provide the name and physical address of your registered agent in the Nevada articles of incorporation. The appointment of a registered agent in the state is governed by 2010 Nevada Code, NRS 77.310. It important to note that failure to maintain a registered agent in the state of Nevada, can lead to revocation or dissolution of the business entity. A registered agent in Nevada protects businesses by receiving legal notices from the state.
  • Shares of Stock – One of the important information that a business entity is required to provide in the Nevada articles of incorporation is the number of shares a corporation is authorized to issue. If a business corporation is authorized to issue more than one class or series of stock, then the business will have to include information pertaining to those series and classes, including the number of shares in each series or class. The board of directors of a corporation is responsible for determining and fixing this information through a resolution. The information should be pursuant to NRS 78.195 and 78.196.
  • Business Purpose – A business entity need to provide information related to their business purpose. Business purpose in Nevada articles of incorporation can be classified as either general purpose or specific purpose. There are also certain limitations on incorporation pursuant to NRS 78.020.
  • Directors/Trustees – According to 2010 Nevada Code, NRS 78.115, the business of every corporation being registered in the state needs to be managed by a board of directors or trustees. A corporation will have to provide information regarding the names of each and every director/trustee in the Nevada articles of incorporation. It is important to note that the directors/trustees should be a natural person and should be at least 18 years of age.
  • Incorporator – A business requires incorporation if it is planning to be established as a C or S corporation. An incorporator is an individual, association, or corporation responsible for preparing and filing the Nevada articles of incorporation with the Secretary of the State. Nevada, like most other states requires the name of the incorporator, address, and signature in the articles of incorporation. It is important to note that if you opt for online incorporation then the incorporator is considered to be the representative of an incorporation service provider.
  • Optional Provisions – One of the important aspects of the Nevada articles of incorporation is that it can contain optional provisions like providing information pertaining to the division or distribution of the profits of the private corporation. The clause of optional provisions is governed by 2010 Nevada Code, NRS 78.037

Form your Corporation in Nevada with IncParadise

If you have taken a decision related to forming a corporation then IncParadise can help provide the guidance and support required for drafting and filing of the Nevada articles of incorporation.

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LLC Operating Agreement

Date: | Category: | Author: Martin Pouzar

NEVADA LLC OPERATING AGREEMENT

The Nevada LLC operating agreement is a type of legal internal document that is drafted by the owner or members of the Limited Liability Company. It is important to note that this document is not a legal requirement in all states except Nevada, California, Maine, Delaware, Missouri, New York, and Nebraska. If you are planning to form an LLC in Nevada then this document is required pursuant to Chapter 86 – Limited-Liability Companies.

What is Nevada LLC Operating Agreement?

The salient aspect of a Nevada LLC operating agreement is that it clarifies, outlines, and strengthens the organizational structure of the organization. This agreement can only be adopted through unanimous written consent or unanimous vote of the members of the said LLC. The agreement can be in an electronic or tangible format and can be adopted prior to the filing of the articles of organization or even after pursuant to NRS 86.286. It is important to remember that an operating agreement has to be drafted by single member as well as multi-member LLC’s.

What Information does a Nevada LLC Operating Agreement Contain?

What does the Nevada operating agreement consist of? How does it help a Limited Liability Company in Nevada to manage its administrative or business functions? There are several aspects of the operating agreement that will throw an insight into it and the finer aspects are:

  • Specific Information: A Nevada operating agreement normally contains specific information pertaining to the business entity or LLC like:
    • The registered name of the LLC pursuant to NRS 86.176
    • The date of formation in the state
    • Physical address of the business entity
    • The registered agent designated for service of process pursuant to NRS 86.236
    • The term of the Nevada Limited Liability Company
    • The process as well as rule for new members and those leaving the LLC
    • A list of existing managers in the LLC
    • A list of all members of the LLC
  • Terms & Conditions: Once a Nevada LLC operating agreement has been drafted, the terms and conditions has to be agreed upon by the members for it to be legally binding.
  • Defining Structure: Drafting of the operating agreement provides an opportunity for defining the overall structure related to the working or operations of the LLC along with the financial relationship with any of the LLC members.
  • Other Information: The Nevada LLC operating agreement will contain information pertaining to the percentage of ownership of each member of the Limited Liability Company. It will also contain information regarding how the profit and loss is to be distributed, the responsibilities and rights of each LLC member as well as the provision for transfer or change of membership. The operating agreement will also include information related to areas such as list of member capital contributions and distributions.

It is important to note that unless otherwise specified in the Nevada operating agreement, a manager or member, or any other person cannot be held liable for any breach of duty, to other members of the LLC or the said Limited Liability Company in accordance with NRS 86.286.

Benefits of an operating agreement

Why should your LLC have an operating agreement? Are there any benefits?

There are certain benefits of a Nevada LLC operating agreement and these benefits not only protect the LLC but also the members or managers. Some of the primary benefits are listed as under:

  • Member’s Liability: It is a known fact that a Limited Liability Company and its members are unique identities. Even then, there may be situations in which the members of the said LLC may be held accountable or liable for specific actions especially those related to debts and liabilities like business loans. In such a scenario, a creditor can go after the said member’s personal assets. This possible if the creditor can provide evidence to prove that the LLC was solely created for providing legal protection to the member. The best way to avoid such legal complication is by ensuring the LLC has laid out the expectation of each member clearly in the Nevada operating agreement.
  • Resolving a Dispute: There can be a situation where-in disputes can arise between the different members of a Limited Liability Company. This is where an operating agreement can help resolve a dispute or ensure a dispute never takes place in the first instance. A Nevada LLC operating agreement explicitly cites the expectations of the members and lays emphasis on the rules and regulations to be followed by each member.
  • Non-competes: One of benefits of drafting an operating agreement is that an LLC can be protected if a non-compete clause is inserted in the agreement. This will prevent members of the said Limited Liability Company from competing with the company. The non-compete has to be properly defined to be effective or enforceable.
  • Dissociation and Withdrawal: A Nevada operating agreement when properly drafted can help in defining roles of each member of the LLC and can also resolve issues related to the dissociation or withdrawal of any member whose interests are not aligned with that of the business. You will not have to power to force out a member if reasons for such actions are not mentioned clearly in the agreement. Although, there are state laws on dissociation and withdrawal, it always pays to draft an agreement with these clauses.

Whether it is a single-member LLC or multiple members LLC, the benefits of operating agreement can help the business to follow its goals and priorities instead of precious time getting wasted in liability suits and internal disputes.

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Business Personal Tax

Date: | Category: | Author: Martin Pouzar

NEVADA BUSINESS OR PERSONAL TAX – NEVADA DEPARTMENT OF REVENUE

A business corporation or LLC can be registered in any state in the USA but the one aspect that most owners, managers, and directors are worried about is the tax implication. Normally, how the income of specific businesses is taxed depend a lot on the legal form of that business. A corporation will always be taxed differently from a Limited Liability Company. If you are planning to incorporate or have formed a business in Nevada then how does Nevada business tax works?

Nevada as Tax-Free State

Nevada is considered one of the best states for registering new business or start-ups and this is more so because there is no corporate income tax. This of course doesn’t mean that there is no Nevada business tax.

The tax rate for Limited Liability Companies is one of the lowest in the nation and corporations are required to pay taxes at the federal level. The Nevada corporate tax is applied to businesses operating in the state. It is applied to the gross taxable income of majority of businesses and corporations registered in this state.

Some businesses especially “pass through entities” like an S Corporation benefit from the fact that the profit and loss is passed through from the business to the owners. As a result, there is no double taxation as instead of an S Corporation paying Nevada business tax, the owners will be subjected to personal income tax.

When it comes to paying taxes, where do you submit business or corporate tax?

Nevada Department of Taxation

The Department of Taxation of the State of Nevada is responsible for administering the collection of Nevada corporate tax or business tax. Their mission to ensure fair and effective administration of business tax programs in the state in accordance with NRS Chapter 363C, NAC 363C, and Senate Bill No. 497. The Department of Taxation aims to serve taxpayers including individuals and businesses by being committed to the highest standards of ethical conduct and professionalism.

The primary goal of the Nevada Department of Taxation is to ensure stable administration of tax statutes while providing equitable treatment to taxpayers. Some of the different types of Nevada business tax collected and distributed by the department include:

  • Sales and use taxes in accordance with NRS Chapter 372, 374 and 377
  • Modified business tax (MBT) in accordance with NRS Chapter 363B and NRS Chapter 363A
  • Real property transfer tax
  • Estate tax in accordance with NRS Chapter 375A
  • Real and personal property tax on interstate and inter-county companies in accordance with NRS Chapter 361

Nevada Corporate Net Income Tax Rate

There is no Nevada corporate tax although there is a “Business License Fee or Tax” of $500 that all corporations have to submit with the office of the Secretary of State. This license fee or tax has to be paid either during incorporation or annually on the last day of the anniversary month of incorporation.

Nevada Commerce Tax

The Commerce Tax is a type of annual Nevada business tax that is imposed on those businesses that exceed $4 million in gross revenue within the taxable year. This tax is levied on the “privilege” of engaging in business in this state. You will be required to file the “Nexus Questionnaire” with the Nevada Department of Taxation to register your business for Commerce Tax.

The commerce tax has to be paid by all types of business entities except for entities exempt like Credit union, Non-profit organization, and Business entity organized pursuant to NRS 82 or NRS 84 among others. Whether you have registered a corporation or a proprietorship in the state, if your gross revenue doesn’t exceed $4 million then this Nevada corporate tax will not be levied.

Nevada Personal Income Tax Rate

To have a low tax bill is what most businesses and individual’s desire and the best way to achieve that is to live and register your business in a state that has no income tax. Nevada is one of the 7 states in the nation that does not have any personal income tax.

Average Nevada Sales Tax Rate

Businesses benefit from the fact that there is no Nevada business tax or personal income tax but does that mean, the state doesn’t levy any taxes? It does. Nevada levies sales tax, which was first adopted as a general state sales tax in 1955. Apart from the state sales tax, there are local sales taxes and special district taxes that range from 0 – 3.665 percent. The combined sales tax rate in Nevada currently range from 4.6 to 8.265 percent and this is dependent on the location of the sale like Winchester, Nevada has 4.6% tax rate while Crystal Bay, Nevada has 8.265% tax rate.

A business needs to have a “sales tax nexus” or “significant presence” in the state of Nevada in order to pay Nevada business tax or sales tax. So, when does the state consider a business to have a sales tax nexus? This is only when the following are met:

  • A business has a physical office or a place of business
  • The business has a warehouse that is holding tangible goods
  • The business has an employee present in Nevada
  • If the business delivers merchandise in the state using vehicles
  • If the business owns real or personal property
  • If the business has independent contractors in Nevada

Since there is no Nevada corporate tax, the sales tax is applicable for businesses and is levied on the sale of tangible goods as well as specific services. This tax is normally collected by the business that is selling goods or services and it is remitted to the Department of Taxation.

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Moving Business to California

Date: | Category: | Author: Martin Pouzar

MOVING YOUR BUSINESS LLC OR CORPORATION TO CALIFORNIA

California is one of the top economically successful states in the nation that is also considered as the hub of technology for start-ups. Home to the Silicon Valley, there has been a rise in the number of owners and directors moving corporation to California from other states. Do you want to move your business to “The Golden State”?

Introduction – Why California?

Why move your business to California? The state is economically strong with a Real Gross Domestic Product (GDP) of $2.7 trillion and is home to 49 Fortune 500 companies. The world’s fifth largest economy has most of its economic activity centred along the coast with the Bay Area ranking 19th in the world. There are over 3.5 million small businesses that have access to the two largest seaports in the nation. Most business owners think of moving LLC to California because of the infrastructural support the state provides like one of the most active international cargo airport along with a wide variety of business incentive programs.

The question is – what are the possible benefits or advantages for moving LLC to California? Your business can leverage from the following:

  • Tax Credits: One of the biggest benefits of moving corporation to California is that the state offers a wide variety of tax credit programs. Depending on the type of tax credit program and qualification criteria, businesses can enjoy tax credit on areas like qualified wages, qualified expenditures, Community Development, Research, rehabilitation or construction of low-income housing, employment creation, retention of employees, and economic impact of business projects. Some of the popular tax credit programs include New Employment Tax Credit, California Competes Tax Credit also known as “Cal Competes”, and California Research and Development Tax Credit.
  • Tax Exemption and Exclusions: If you are moving LLC to California then your business can benefit from the different “Tax Exemption” programs being offered by the state. These exemption programs can be classified according to different industries or areas of business like the Manufacturing and R&D Partial Sales and Use Tax Exemption and the CAEATFA Sales and Use Tax Exclusion. The sales and use tax exemptions are also applied according to categories like Health Related industries or businesses, Housing, Alternate Energy, Food and Food products, Transportation Related Industry, and Entertainment Industry among others.

Steps to Move a Corporation to California

California provides just the perfect platform for businesses but if you are thinking of moving corporation to California then it is important to be aware of the ways you can successfully do so.

The Registration Options

It is important to identify the options for moving Corporation to California. There are 3 options to choose from:

  • Register as a Foreign Corporation: If you want to continue your business in the state of formation and at the same time you want to register in California then this is the option. You will be required to register your business as Foreign Corporation pursuant to 2007 California Corporations Code-Chapter 21, Section 2100 – 2117.1.
    There can be extensive paperwork as you will have to file Annual Report in your home state and “Statement of Information” in California. You will also be required to file the following documents in order to initiate moving corporation to California:

    • File an application for registration also known as “Statement and Designation by Foreign Corporation” pursuant to 2007 CA Codes, corp: 2101 and 2105.
    • Submit a “Certificate of Good Standing” issued by the government agency in home state
    • Mail Submission Cover Sheet
  • Dissolve home Corporation and Form New Corporation: If your home state doesn’t allow domestication or conversion then this will be a valid option. Moving corporation to California after dissolving home corporation means that you will have to form a new business entity in the state. It is also important to know that liquidation or dissolving your business entity may lead to income taxes being incurred by the corporation and its shareholders. The documents required to process the incorporation with the California Secretary of State are:
    • Depending on the type of Corporation like General Stock Corporation or Professional Corporation, you will have to file “Articles of Incorporation” pursuant to CA Corp Code § 202 (2016).
    • Mail Submission Cover Sheet
    • Certificate of good standing from California
    • Registration of Business Name
  • Form a New Corporation in California and Merge Old Corporation: One of the ways of moving corporation to California is through reorganization, which is a tax-free process. Through this process, you can form a new corporation in California and merge your existing or old corporation with the new corporation pursuant to CA Corp Code § 1100 (2016).An agreement of merger has to be approved by the board of both corporations. You will be required to file specific documents to initiate the merger and they are:
    • Depending on the type of merger, you will have to submit the Short Form Merger – Certificate of Ownership, Merger By Agreement of Merger, or Triangular Merger
    • Mail Submission Cover Sheet
    • Certificate of Surrender – for foreign corporations

The documents pertaining to any of the above options can be mailed using regular or express mail, or delivered in person to the office of the Secretary of State, Business Entities Filings. Whatever option you choose, IncParadise can provide guidance and services for moving Corporation to California.

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Steps to Move an LLC to California

Moving LLC to California to benefit from the various tax incentives and other business incentive programs is a good decision but how do you move your LLC? Do you need to form a new LLC or can it continue as the existing entity? Let’s take a look at the options offered by the state of California.

The Registration Options

It is important to identify, how you would want to register your business identity. There are 4 options to choose from:

  • Register as a Foreign LLC: One of the ways of moving LLC to California is to register your business as a Foreign LLC pursuant to CA Corp Code § 17450-17457 (through 2013 Leg Sess). If you choose this option then you will be able to continue your LLC in your home state while operating as a foreign LLC in California. A foreign LLC is required to file Statement of Information in California and an Annual Report in the home state. A foreign LLC will be required to file the following documents with the California Secretary of State:
    • Application to Register a Foreign Limited Liability Company pursuant to CA Corp Code § 17451 (through 2013 Leg Sess)
    • A Certificate of Good Standing from an authorized public official from the home state
    • Mail Submission Cover Sheet
  • Liquidate home LLC and Form New LLC: One of the options for moving LLC to California is liquidating LLC in home state and forming a new LLC in California. The formation of a new LLC is governed by 2012 California Codes, CORP – Corporations Code, Titile 2.5 – Limited Liability Companies. One of the benefits of this option is that dissolving your LLC in home state will not entail any federal tax consequences. The documents required to process the formation with the California Secretary of State are:
    • You will have to file “Articles of Organization” pursuant to CA Corp Code § 17051 (through 2013 Leg Sess)
    • Mail Submission Cover Sheet
    • Registration of Business Name
  • Form a New LLC in California and Merge Old LLC: This is another option through which you can maintain your LLC in the home state as well as California. This process of moving LLC to California will require you to form a new LLC in the state and then merge it with your existing LLC. There will be no immediate tax consequences and this merger would be seen as a continuation of the home state LLC. You will be required to file the following documents:
    • An approved “Agreement of Merger” pursuant to CA Corp Code § 17551 (through 2013 Leg Sess)
    • Certificate of Merger pursuant to CA Corp Code § 17552 (through 2013 Leg Sess)
    • Mail Submission Cover Sheet
  • Form LLC in California with Members from old LLC: The process of moving LLC to California using this option involves forming a domestic LLC in California, which should have members that contribute membership interests from the LLC registered in the home state.

The documents pertaining to any of the above options can be mailed using regular or expedited mail, or hand delivered to the Secretary of State, Business Entities Filings. Depending on the option you choose, IncParadise can provide guidance and services for moving LLC to California.

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Move Your Business to California with IncParadise

Whether you are thinking of moving corporation to California or a Limited Liability Company, the benefits are many including business incentive programs, tax abatement programs, and funds and grants for small businesses. Moving your business entity related to formation, conversion, merger etc., can be a daunting task and even the smallest error can delay business entity registration.

IncParadise one of the top registered agents in California will guide you through the entire process with our knowledge, experience, and commitment so that your LLC or corporation can be formed and become operational quickly.

You can call us at 702-871-8678 to speak with a representative today.

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