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Frequently Asked Questions
- Which entity is best for me?
- What are state fees?
- How much stock do I need?
- Where do I get stock/membership certificates?
- Do I need a federal tax ID (EIN) number?
- How do I open my company bank account?
- When do I pay franchise taxes?
- Do I need to be registered to "transact business" in my home state?
- A Nevada corporation is usually appropriate if:
- There is any chance the owners might want to become an S corporation.
- Several individuals or entities will be owners.
- Owners plan to be profitable in the first several years of operation and planto reinvest profits for growth.
- Owners live in a state with income tax.
- A Nevada S corporation is usually appropriate if:
- The company will experience start-up losses during the initial years of operation and the owner has ordinary income against which these losses can be deducted.
- The company is a single-owner entity.
- The owner wants to extract most of the profits instead of reinvesting for growth.
- The company does not expect to issue multiple classes of stock or have more than 100 shareholders.
- A Nevada LLC is usually appropriate if:
- The business is a partnership, or several different entities own the business.
- The company is used primarily to hold real estate or other income-generating assets such as stocks.
- The company has foreign investors.
What are state fees? State fees are the filing fees imposed by the State of Nevada for forming an LLC or corporation in Nevada. The state's fee for forming an LLC is $75. The fee for forming a corporation is also $75.
The Nevada Company acts as an intermediary by collecting the state fees you owe on behalf of the State of Nevada and submitting them to Nevada on your behalf during the formation process.
- What are the business license requirements? Effective October 1, 2009, Nevada changed administration of Business Licenses from the Department of Taxation to The Nevada Secretary of State. The Secretary of State requires that new corporations file an Initial List of Officers/Directors and Business License, and new LLC's file an Initial List of Members/Managers and Business License, on or before the last day of the first month after the formation. The Business License is then on an annual renewal that will coincide with your annual report filings.
The Secretary of State has also issued a $200 fee for the Business License filing. This fee will be collected in addition to the inital list and annual renewal fee of $125. Your business may also be subject to other business licenses and permits required by your city and/or county.
- How much stock do I need? As the owner of a Nevada corporation, you determine the appropriate number of shares for your company. The numbers of shares you select will influence your cost of maintenance. Unless otherwise specified, The Nevada Company forms corporations with 2,000 shares at a par value of $.01. If you wish to increase the number of shares or par value later in the corporation's life, you can do so by filing an amendment with the state.
- Where do I get stock/membership certificates? The Nevada Company's LLC or corporate kit, which is included with your formation, contains 10 custom numbered membership or stock certificates for your company.
- Do I need a federal tax ID (EIN) number? The IRS requires LLCs or corporations who intend on having employees or opening a bank account to obtain an EIN. To obtain an EIN, you must provide a valid US Social Security Number (SSN) or individual tax identification number (ITIN).
- How do I open my company bank account? It is typically best to contact the bank(s) with which you would consider opening an account to ask them what type of information they require. Most banks require a certified copy of the articles of organization (or incorporation) which is available for purchase as an add-on item from The Nevada Company. Some banks will require a certificate of good standing and a tax ID number (EIN), both of which can be purchased as add-on items when ordering your company or at a later date. Most non-US clients will require articles of organization or articles of incorporation with Apostille, which is also available as an add-on item.
- When do I pay annual list fees? For both LLCs and corporations, the annual list state fee is due to the State of Nevada on or before the last day of the anniversary month of your formation. You will receive notification and instructions for paying your annual state fees from your registered agent service provider prior to that date.
- Do I need to be registered to "transact business" in my home state? Your Nevada company is a domestic company in the state of Nevada. It is a foreign company in every other state or country. If you plan to staff offices in a state other than Nevada, with employees to conduct business directly with the public, it may be wise to register in this state. Registering in additional states is generally not necessary if you are a consultant; a one-person, two-person, or home-based business; or sell through distributors, manufacturer's representatives, wholesalers, retailers, or through mail order or the Internet. More information on what constitutes "transact business" can usually be found at the Secretary of State's office in each state. If you decide to register with your home state, be advised that most states will require a certificate of good standing from the State of Nevada. You can either order this certificate as an add-on item when you purchase your formation package, or separately later, if you find that you need it.
Do I need mail forwarding? Business owners who are not physically located in Nevada often are in need of an address in the State of Nevada to list as their business address. With the mail forwarding service, you are provided a physical street address (not a P.O. Box) in Las Vegas, Nevada. The mail received for your company is then forwarded weekly to the address you designate. Mail forwarding is available to customers located in and outside of the United States.
The United States Postal Service (USPS) requires that all mail forwarding customers complete USPS Form 1583 and provide two valid forms of identification, one of which must include a photograph.
The Nevada Company partners with Forward Nevada for fulfillment of the mail forwarding service. When you add mail forwarding to your formation order and after payment has been applied to your order, you will receive an email with instructions for initiating your mail forwarding service with Forward Nevada.