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

One of the most important factors to consider when incorporating a business is its location. Your primary location determines how high your company's chances of surviving are. It also affects how much it would cost you to run your startup.

Each state has its unique features, from low registration fees to major tax advantages. The more benefits a state offers, the better it is for your startup. If you want your company to succeed, you need to find an environment that could help you do that.

Choosing the right state for your startup isn't easy. So, to help you out, we've compared the benefits of starting an LLC in Tennessee and Nevada.

This guide will show you why Nevada is the most business-friendly state in the country.

Tax Implications

Apart from not having a personal income tax, Anyone who plans to form an LLC in Tennessee is not required to pay state income tax. Instead, LLCs in Tennessee are subject to a franchise tax based on the LLC’s net worth or the value of its property in the state. The franchise tax is capped at $3,000 per year.

Meanwhile, Nevada has no franchise tax, no corporate income tax, and no personal income tax. This makes Nevada a popular choice for businesses looking to save money on taxes.

Protection for Members

In Tennessee, LLC owners are protected by the state’s charging order protection. If the LLC is sued, the plaintiff can only collect the LLC’s profits and distributions, not the owner’s assets. However, Tennessee law does not provide any protection for single-member LLCs, meaning that your personal assets may be at risk if you are the sole owner of an LLC.

Nevada LLC owners are protected by the state’s charging order protection and a strong series LLC law. A series LLC is a type of LLC that can have multiple “series” (or sub-LLCs) under the same umbrella. Each series has its assets and liabilities, so if one series is sued or goes bankrupt, the other series are unaffected. This can be a significant advantage for businesses with multiple operations or assets.

Ease of Maintenance

In Tennessee, the annual report is due on the first day of the fourth month after the end of the LLC’s fiscal year. The filing fee is $50 per member, with a minimum fee of $300 and a maximum fee of $3,000. Tennessee LLCs must also pay a franchise and excise tax based on the company’s net worth and income.

Nevada’s annual report, also known as the Annual List, is due on the last day of the anniversary month of the LLC’s formation. The filing fee for the Annual List is $150, and a $200 Business License Fee must be paid annually. Nevada doesn't have a state income tax. This makes it more viable for businesses looking to minimize their tax burden.

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

NCH is Nevada's leading business formation services provider. Our team of specialists will provide you with all the support you need from start to finish. We'll help you explore the difference between incorporating in Nevada and Tennessee.

NCH also has business formation services that make the incorporation process much easier. We'll help you acquire the business license you must incorporate in Nevada. And if you need a registered agent to manage your legal documents, we'll assist you in hiring one.

Additionally, NCH also offers private consultations for tax and legal services. Our experts will guide you through developing effective strategies for minimizing tax liabilities and preserving your wealth.

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