Global Business Lawyers - Lovaas and Lehtinen, P.C.

Industry and law related topics affecting business entities in the local, national, and international legal and business communities. Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.

Tuesday, July 28, 2009

Choosing a Business Entity - Limited Liability Company (LLC)

Limited Liability Company (LLC)

In recent years the Limited Liability Company (LLC) has become a popular choice among business owners in Nevada. The LLC enjoys a host of benefits, including (1) asset protection (2) tax advantages and (3) simplicity of formation and operation of the business. LLC’s do have some similarities to partnerships in regards to taxation. In addition, LLC’s provide great flexibility in regards to the management of the business as all members of an LLC can manage the business or the management can be delegated to a group of members or a single member. In addition, a manager can be a corporation, partnership of even another LLC.

Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.

Thursday, July 23, 2009

Choosing a Business Entity - Partnerships

Partnerships - Limited Partnerships

A Partnership is formed when two or more people join to establish a business. Partnerships are also easy to form, but they are taxed differently than a sole proprietorship.[1] Similar to a sole proprietorship, a partnership does not provide the partners with liability protection.

Limited Liability Partnerships are composed of two different types of partners (1) general and (2) limited. General partners are involved in the management of the business and bear all the risk of running the business. In contrast, limited partners invest in the business, but bear minimal or no risk in the running of the business. Limited partners share in the profits and losses as set forth in the partnership agreement.

[1] For more information regarding the taxation of these business entities, please consult your CPA or Accountant.

Tuesday, July 21, 2009

What Business Entity is Right for You? Sole Proprietorships

Sole Proprietorship

A business owner may choose to form a sole proprietorship because of its simplicity. A sole proprietor does not have to file a separate business tax return; rather, a business owner can just attach a schedule C to his or her own tax return. Although, this business form provides simplicity in set-up, it provides almost no liability protection. Particularly, there is no legal distinction between the owner and the business itself. Consequently, if the owner is sued the owner may be subject to a judgment against his or her personal assets.

Friday, July 17, 2009

Choosing the Right Business Entity for You and Your Company

What Business Is Right for You?

When deciding the type of business entity to form, a company must take into consideration different tax implications and the necessary protection level required regarding any potential exposures of liability. It is absolutely imperative to consult an attorney and a CPA/Accountant before forming a business entity. Selecting the right entity with the advice of these professionals can provide a business owner with a secure level of asset protection. With those important considerations in mind, the next ongoing blog entries will address the pros/cons and differences between some of the most common business entities.

Nevada recognizes the following business entities: sole proprietorship, partnership, limited liability company (LLC) or a corporation. Within those categories there are different options available. In regards to partnerships there is a: (1) general partnership (2) limited partnership (3) foreign limited partnership or (4) limited liability partnership. In regards to corporations, the most common types are a (1) C Corporation (2) Close Corporation and (3) S Corporation. Each of these entities will be addressed in upcoming posts.

Tuesday, July 14, 2009

Best Reasons to Do Business in Nevada - Part 11

Southern Nevada’s Foreign Trade Zone-Nevada Development Authority.

Businesses that are involved in international trade can benefit from Southern Nevada’s Foreign Trade Zone #89 which is operated by the Nevada International Trade Corporation. There are six sites located in the Southern Nevada. In addition, Northern Nevada is home to Foreign Trade Zone #126. Foreign Trade Zones were created by Congress in 1934 and are sites within the United States in or near a U.S. Customs port of entry, where foreign and domestic merchandise can be considered international commerce. A business can utilize trade zones as a mechanism to defer or eliminate duties on merchandise brought into the United States.

Thursday, July 9, 2009

Best Reasons to Incorporate in Nevada - Part 10

Protection from Personal Liability

The officers and directors of Nevada corporations enjoy substantial asset and liability protection. Overall, Nevada law protects directors and officers from personal liability from acts committed on behalf of the corporation or by the corporation. In Nevada in order to “pierce the corporate veil” of a corporation, which is the act of holding the directors, officers or shareholders of a corporation liable for for the debts and liabilities of the corporation, requires the presence of “fraud” or “manifest injustice.” This is the highest standard for personal indemnification available. NRS 78.138(7). In essence any individual or manager, as a director or officer in a Nevada corporation, retains minimal or no legal or financial liability exposure under the Nevada corporate veil.

Thursday, July 2, 2009

Best Reasons to Incorporate in Nevada - Part 9

INCORPORATING IN NEVADA

In Nevada shareholders, officers and directors may be nonresidents of Nevada. Further, officers, directors and stockholders are not required to be U.S. citizens. In addition, stockholders are not required to live in or hold meetings in Nevada, they can meet anywhere in the world and Nevada allows nominee shareholders.

All corporate officers can be held by a single person, which eliminates the need to find different people to fill each corporate office position. Nevada allows corporations to conduct business at more than one office. Unlike Delaware who is now regulated by a corporation commission, Nevada is not. In contrast to Delaware, in Nevada stockholders and directors do not have to report the dates and times of annual meetings. In addition, entities formed in other states may be converted into Nevada entities so they can benefit from the advantages and flexibility offered to Nevada corporations.