Stock Held Corporations Information Nevada, Corporation Ownership, Stocks, Sub Chapter S

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cor·po·ra·tion : a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession

Corporations

Stock Held Corporations

We think unless you are taking income directly, that you should use an LLC when ever possible.

In a stock held corporation ownership is held by stock. Stock can be certified and issued or not. In privately held corporations this is internal information and is recorded in the stock ledger. The stock ledger is held at the company headquarters. This must be available for viewing by the stockholders, or other authorized parties. Fines can be issued if these records are not produced. This really never happens unless there is a dispute. To be compliant we think it is prudent to keep you records up to date.

Stock is considered personal property. If a lawsuit comes at a company. If it is lost then the stock you hold in the corporation can be assigned and taken in a judgment. Your company can continue on without you. This is the Achilles Heel of a Stock held Corporation.

With a stock held corporation it is easier to change owners. If you are going to be changing owners we think this is the best structure to have. The Director or Officers named in the Bylaws has the all the power in the company to transfer stock whenever he or she likes. The Director does not need permission from the stockholders.

Stock held Corporations do not have charging order protection. Stock is personal property. This best tax structure to use with a stock held corporation is the Sub Chapter S, obtaining this election is easier with a Stock held Corporation. This is the best structure if you are going to be paying yourself a salary.

Sub Chapter S

This is a flow through to an Individual and is the best vehicle to pay you from. If you live in another state (most of you do) this is the best way to control your income. You get to decide how much salary you are going to pay yourself. Thus you control how much State income tax you are going to pay the state you're in.

Salary is a 100% deduction.
Sub Chapter S Corporations can own Property (land, cars, boats, planes, ect.) these can be depreciated. Maintenance can be taken as a deduction.

If you sell a Property (land, cars, boats, planes, ect.) and make money on that property, (Capital Gains) there is a 15% cap on the taxes you pay and can be as low as 5%, depending on the amount of Capital Gains.
Sub Chapter S Corporations can pay for business trips. Full deduction.
Medical Insurance must be deducted from the individual's tax return.

Sub Chapter S Corporations can take all normal expenses, pay salary, stock holders can take a distribution, this what the company has left over at the end of the year, you must pay Basic Federal Taxes but you do not have to pay taxes to the state your in or SS or Medicare, this can save you a lot of money. Because you pay your own salary it may be small but reasonable, you may control the amount of personal state taxes that you pay. You can have one Stockholder if you like, or up to 75 people if you like. Sub Chapter S Corporations must have a December year end. Sub Chapter S Elections are easiest to obtain with a Stock Held Corporations

The 2553 must be filed within 75 days of forming the company or in the first 3 months of the year.

We have found that this will protect our clients from a variety of consequence when they are doing business in the public eye. The idea is that you bankrupt the Company not the person.

Disadvantages Sub-Chapter S // 1120S Form

You lose your privacy you are named in the 2553 to the IRS. Your name is on public record with the Secretary Of State. (If you chose the Deluxe package we can use your Nevada address and make it harder for anybody to identify you from the public records.)

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