Limited liability companies (LLC) have, in a few short years, become the favorite choice by new entrepreneurs for their business entity. Wealth Support Services forms LLCs in all 50 states and can design the structure of the LLC to meet your needs.
Nevada LLC Formation or limited liability company (LLC) is the new kid on the block. It was first authorized in Wyoming in the mid 1970s. It wasn’t until the mid 1990s that all 50 states recognized the LLC as a valid legal business entity. However, in a few short years it has become one of the favorites used by new entrepreneurs as their entity of choice. There are several reasons for this.
The LLC provides the client with the greatest tax planning flexibility of all business entities. It may be taxed as a C corporation, an S corporation, a partnership, a sole proprietorship or be a disregarded entity and not be required to file a tax return at all. When used in conjunction with a C corporation, and it will provide you with the greatest tax flexibility as well as the most pretax business expenses.
Additionally, the Nevada LLC Formation may be done in several ways. It may be a “member managed” LLC, in which the owners or “members” are also the officers and directors, and every member has managerial responsibilities. It may also be formed as a “manager-managed” LLC. In this case, one or more persons or entities act as the officer and director. A member may also be a manager, but it is not required. Nor is it required that the manager also have an ownership interest. When one or more managers have been designated, the members merely become passive investors. They’ll have no managerial rights or responsibilities at all.
Like the limited partnership an LLC provides tremendous asset protection too. In fact, the it provides greater asset protection than the limited partnership. Neither the members nor manager is liable for the debts and obligations. So, if the it is sued and you are a member you may lose your investment, but you are not liable for anything above that investment. The judgment creditor cannot attempt to collect the judgment against from the member. The same is true of the manager in that, statutorily, the manager is not liable for the debts and obligations.
Members are protected by the “charging order” protection. In the event of a judgment against a member, the ownership interest is protected. A court may not order the member (the judgment debtor) to give his/her ownership interest to the creditor. The Court can order the LLC to pay the judgment creditor the profits which are due to the member (the judgment debtor). But, the ownership interest is never at risk. And, if the manager determines not to pay any profits to the members, the judgment creditor receives nothing, but still must pay taxes on the profits that he/she is otherwise legally entitled to receive under the terms of the “charging order.” So, the judgment creditor does not receive any ownership interest, nor does he/she receive any profits. But, he/she must still pay the taxes on the money he/she did not receive.
The use of the LLC to hold your assets not only gives you asset protection, but it will also provide you with anonymity of ownership. The LLC is not formed in your name even though you will control it. But, because your name is not on the formation documents, your ownership identity will be shielded from prying eyes.
Contact Wealth Support Services for additional information to determine if an LLC is the best business entity for you.
