LLC (S Corporation or C Corporation)
One of the most important aspects of forming a corporation in Nevada is the understanding of the difference between an LLC, S Corporation or C Corporation and the process through which a Nevada C Corporation can become a Nevada S Corporation.
It is also important to be aware of certain restrictions that are applicable to Nevada S Corporations, but are not applicable for C Corporations. If you have a specific situation and require advice for choosing between an S Corporation and a C Corporation status in the state of Nevada, then it is highly recommended to discuss this with your tax advisor, attorney or accountant.
In order to incorporate your business as an S corporation, C Corporation or LLC, Articles of Incorporation for corporations as well as Articles of Organization for LLCs are required to be filed with the Nevada state agency.
Initially, when a corporation is chartered in the state of Nevada, it is given the status of a C Corporation. A Nevada C Corporation becomes an S Corporation when a special tax treatment (pass-through taxation) is sought after with the consent from all shareholders of the C Corporation. The change to S Corporation can be sought by filing the “Form 2553” with IRS in accordance to Sub-chapter S of the Internal Revenue Code.
A limited liability company (LLC), seen more as a traditional business designation, can exist as a sole proprietor/partnership, S-corp or a C-corp. LLCs in Nevada offer greater flexibility in terms of choosing the tax identity that will most benefit the members.