Forming Nevada Llc
LLC OR S Corp in Delaware or Nevada?
I am in the process of starting up an LLC for a web-based business. I need to know what state I should form it in. I am a US citizen currently living in NY, and I hope to be able to operate the LLC in either Delaware or Nevada. But my LLC will only have 1 member which will be me. Now I read that a single member LLC is ignored. Here is the statement, “Generally, when an, LLC has only one member, the fact that it is an LLC is ignored or “disregarded” for the purpose of filing a federal tax return. Treasury Regulations Section 301.7701-1,-2,-3″ “If you prefer to file as a corporation instead of as a “disregarded entity” Form 8832 must be submitted.” http://www.irs.gov/pub/irs-pdf/p3402.pdf
Is this true, and if so would it be best for me to start an S corporation instead.
Also i’m not to clear about Registered agent. Could someone help me shed some light on this, also could someone recommend a good Registered agent. Thanks!
For tax purposes only, a disregarded entity means that your LLC will not be classified as taxable on its own. By default it would be filed as a schedule C on your personal tax return unless you file form 8832 to elect to be taxed as a C corporation. If you make this election your business on Form 1120. This does not have any effect on your legal standing as far as other laws go that regard LLC.
A lot of people make a mistake in thinking they want to be taxed as a corporation. You will be considered an employee of the corporation and must pay yourself a salary, and pay all the employment taxes (even unemployment insurance), keep a workers comp policy on yourself and send yourself a W-2 at the end of the year. Plus depending on what kind of business you are getting into you could be considered a “personal holding company” or a “personal service company”. Either way it means more taxes. Think carefully before doing that.
A registered agent is the person that registers your company to operate in a particular area. There are certain rules about who can be the registered agent that defers from place to place.
I would suggest consulting an attorney that specializes in starting business about what king of company you should be and where it should be registered.