Comparing Nevada and Illinois LLC: Which State is Right for You?

When incorporating a startup, location is a key factor to consider. After all, it determines your company’s chances of surviving or going into bankruptcy. Moreover, it gives you an idea of the cost of running your startup.

Every state has its advantages and disadvantages. Of course, you’d want to choose the one with the best benefits and a pro-business environment for a higher chance of success.

This quick guide compares the benefits of incorporating an LLC in Illinois and Nevada. Discover why the Silver state is the best place to start your venture.

Flexible Tax Treatment

LLCs in Illinois can choose how they will be taxed, whether as a sole proprietorship with one member or a partnership with two or more owners. However, taxation still depends if the LLC is elected as an S or C-corporation.

Registration Costs

Forming an LLC in Illinois involves filing organization articles with the Secretary of State and paying the registration fee of $150 on top of the annual fee of $75. This amount is the same for corporations and limited partnerships, while series LLCs must pay a registration fee of $400.

Registered Agent

LLCs in Nevada and Illinois must have a registered agent to receive official documents. This includes lawsuit papers and subpoenas. You can do this in two ways: designating an employee as your registered agent or hiring outside your task force. The former requires certain office hours and staffing requirements, while the latter will cost around $40 to $500 per year.

Low Personal Income Tax

Illinois has a tax rate of 4.95%, significantly lower than those in other states. LLC is a pass-through entity whose taxes are calculated as personal income instead of corporate tax. This rate offsets corporate tax, making it an affordable state to start a business.

While the income tax is still relatively lower, you may want to rethink registering your LLC in Illinois and consider Nevada instead, as there are no corporate or personal income taxes in the state.

No Gift Tax

Nevada and Illinois are two states that don’t have a gift tax. However, a federal gift tax was imposed in both states for gifts worth more than $16,000 in 2022 and increased to $17,000 in 2023.

Gifts exceeding the said amount must be reported to the IRS. The excess will count against your lifetime gift tax exemption of $12.92 million and decrease your federal estate tax exemption.

Want to Know More? Speak With Nevada's Best LLC & Business Formation Company

NCH is Nevada’s leading business formation services provider, offering comprehensive assistance to entrepreneurs looking to start a business. Our team of specialists is ready to provide you with all the support you need to get started. We are committed to being your trusted partner in all business matters.

Our business formation services are designed to make the incorporation process easier. From acquiring a business license to finding a registered agent to manage your legal documents, NCH will help handle the essentials.

Our other business expertise also covers private consultations for tax and legal services. Enjoy peace of mind as our experts guide you through effective strategies to help minimize your tax liabilities and preserve wealth.

Incorporate your business in Nevada and unleash its full potential today!