Corporate Formalities

The law mandates that Corporations and LLC's provide limited liabilty protection to shareholders, officers and directors as long as you keep yourself separated from the business entity. To keep your protective limited liability you need to maintain record keeping formalities. Without proper record keeping formalities the court will not treat your business like a corporation. If you do not have an annual meeting, issue stock and other formalities you are not a corporation. The statues of the State of Nevada require that the records of our corporations or LLC's be kept in written form. Therefore, you must have a corporate record book containing the correct format to comply with state statues. Silver Shield Services, Inc. can provide this record book and help keep you on track. Give us a call @ (775)577-4822 for assistance.

Corporate Formalities

Corporate Taxable Income

The corporation's taxable income is calculated as gross income, minus deductions allowed to corporation. Income includes gross profit from sales, interest and dividends, rents, royalties, and gains and losses. Capital contributions are not considered income.

Possible corporate deductions include life insurance premiums, health and disability insurance, cafeteria plans, 401k pensions and profit sharing plans, travel expenses, entertainment, and qualified personal expenses.

The corporation is allowed to take a full deduction for many expenses that provide benefits to individuals involved with the corporation, while those same expenses are not deductible to sole proprietorships or partnerships. Silver Shield Services, Inc. offers bookkeeping, payroll and tax preparation as part of our corporate services. Give us a call at (775) 577-4822 to discuss your corporate strategies.

Tax Consequences

For a Corporation the IRS penalty for late filing and late paying is based on how much you owe them. Therefore if you lost money or did nothing it will not matter when you file the return. This can be advantageous and you can save time around tax time by focusing on those companies that made money instead of doing tax returns on companies that did nothing or lost money. It would still be in your best interests to not wait several years to catch up your returns (as many people do) as this will cause the IRS to start paying attention to you which is never a good thing! If you need help with your returns please give us a call today - 775-577-4822.

Tax Savings

The tax rates for corporations differ from those of individual rates. The first $50,000.00 of taxable income for a corporation, and remember, that's net income that takes into consideration the broader deductions that are available to the corporation, not gross income - is still taxable at the attractive rate of 15%. The 15% rate disappears at approximately $43,000 for married taxpayers filing joint returns, at approximately $35,000.00 for heads of households, at approximately $26,000.00 for single taxpayers, and at approximately $22,000.00 for married individuals filing separate returns. Contact Silver Shield Services, Inc. for advise with proper planning and structure to help reduce your tax burden.

Taxes

One of the main reasons that people form a Nevada entity is because the State has no taxes. This does not mean that you do not need to file and pay your federal taxes on your Nevada entity. Not filing the proper tax return on your entity is the easiest way to get government agencies (especially the IRS) to look into your affairs. Even if you have done no business you should still file a zero return or informational return. If you would like us to help prepare your returns please give us a call at 775-577-4822 or send an email to staff@shieldcorp.net

Shareholders Privacy Rights

The Nevada Revised Statutes provides that any shareholder who owns at least 15% of the issued stock of a corporation has the right to inspect all books and records at his expense. So therefore if a stockholder holding less than 15% of the issued stock is denied the right of inspection, then certainly third parties can be denied inspection of corporate records without a court order. Anyone who obtains information from the corporation books and records for "any purpose not related to the stockholder's interest" commits a crime. This is rather good protection.

Corporate Banking

Just a reminder to everyone, never commingle funds! This means that you never pay personal expenses from the corporate checking account, and you do not pay corporate bills from your own checking account. If things get a little tight, there are proper ways to deal with the situation, such as executing loans or purchasing additional stock. And of course, remember to put those transactions into the minutes. Under Nevada law such things as commingling funds does not result in piercing the corporate veil as it could in most States. Nevertheless, it is advisable to adhere to this policy as a matter of sound business practice.

Corporate Signature

Signing your name when you enter into any business transaction may sound simple but when you are operating as an Limited Liability Company or Corporation it is the most common mistake people make. The corporation does not sign anything - not contracts, purchase orders, agreements , leases, etc. without an authorized officer of the corporation signing on behalf of it. The public needs to know if the signature on the document is that of individual representing himself or if the signature is signed on behalf of a corporation. So when you sign anything and your intent is that you are representing the corporation it is imperative that you place your corporate title after your name.