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Top Costly Mistakes to Avoid When Forming a Corporation or LLC

If you're looking into starting an LLC in Nevada or any other state, read this mistakes to stay away from to help your corporation start up smoother.

Forming an LLC and NOT knowing how it's taxed

(Are you a single or multi-member LLC? Will you be disregarded for tax purposes, taxed as a partnership, a C-, or an S-corporation?)

1 Forming an LLC for real estate and NOT knowing how it should be taxed when you have dealer and/or investor property (Make the wrong choice, and be doomed to a life of unnecessary taxes.)

2 Forming an LLC and having it managed by members instead of managers (A sure way to lose flexibility and control)

3 Forming an S corporation and NOT knowing the shareholder rules (Imagine discovering years later that you've violated an S corporation shareholder rule -- and that you now owe years of expensive C corporation back taxes.)

4 Forming a C corporation to take advantage of fringe benefits when your business doesn't fit the C corporation model (Can you spell nightmare?)

5 Forming an entity in Nevada and NOT knowing when -- or why -- you should foreign register ("Can't you just get a mailbox?")

6 NOT completing the LLC Operating Agreement (Unless you've got a lemonade stand, it's essential.)

7 NOT properly capitalizing the entity, and especially not being crystal clear with partners about your capitalization (A disaster waiting to happen!)

8 Forming an LLC taxed as an S corporation, and using the wrong operating agreement (A subtle, but effective nuance that must be handled properly)

9 NOT meeting with your CPA to set up a chart of accounts (Running your business off a checking account balance is a fast track to bankruptcy.)

AND MUCH, MUCH MORE

Questions about Forming an LLC or Corporation?
Call NCP at 1-800-351-5111
(outside the U.S. 1-702-367-7373)

Avoid Costly Incorporating Mistakes!


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