Frequently Asked Questions
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NCH is committed to providing a truly superior service to help your business succeed. Browse the most common questions about forming your business, minimizing your tax burden, and maximizing your personal asset protection. If you need further assistance, schedule a call with one of our business specialists today. Schedule here
Many new entrepreneurs worry about creating their small business the right way. But that doesn’t need to be a concern when you partner with NCH. As an LLC formation specialist for more than 30+ years, we have formed and represented more than 120,000 corporations and LLCs worldwide.
We provide the most comprehensive range of services under one roof, helping you with corporate business formation and strategy, tax planning, bookkeeping, estate, and retirement planning. By allowing us to help you build your small business, you can take advantage of lawsuit protection, tax savings, credibility, and access to business funding. In addition, we offer the best tools to start a business, such as a record book, operating agreements, bylaws, employee identification numbers, business license reports, and marketing packages.
Setting up your new business with us is extremely simple. In fact, it only involves three steps:
- Choose your entity type and state
- Complete a simple company information form
- Select the best upgrades for your business
And that’s it! Easy as pie.
A registered agent is a designated individual or third party physically located in the same state in which a business was established. On behalf of the business, a registered agent receives legal and tax documents, service of process forms when the business entity is a party in a legal action, and paperwork from the state and federal government.
The law requires a registered agent for businesses that do not have a physical location in the state in which the business is registered. It is the duty of the registered agent to ensure that all necessary documents are forwarded to the entity and that the business remains in good standing with the state. If your business doesn’t maintain a registered agent, it is at risk in several ways, including lack of information, lost standing, financial liability, and dissolution.
NCH guarantees a processing timeframe of just 24 hours–or the service is completely free.
An Employee Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique number assigned to a business so that the IRS can identify the business, and the business can report its taxes. Whereas a Social Security number identifies individuals, the EIN identifies businesses with a 9-digit number. And this EIN can protect your identity because it uses an identification number instead of your Social Security number.
Both entities provide numerous benefits to your business because incorporating a business allows business owners to establish credibility and professionalism, as well as providing limited liability protection. It is important to keep in mind that corporations and LLCs are not the same. Although they have some characteristics in common, such as providing limited liability. They are different in other ways:
The advantages of an LLC include:
- LLCs can be governed more informally than corporations.
- LLCs have greater flexibility in deciding how to split their financial interests.
- An LLC can be a pass-through tax entity without the restrictions imposed on corporations.
The advantages of a corporation include:
- Corporations are more familiar to investors, bankers, legal, tax, and other trusted advisers that small businesses rely on, as well as the general public.
- Corporations can offer stock options and stock bonuses as incentives to employees and managers.
- It is easier for corporations to obtain outside financing from venture capitalists and private equity funds—and to have an initial public offering.
Every U.S. state develops its own unique statutes regarding corporate structuring, operational requirements, legal protections, and personal privacy protection. And because Nevada has the most business-friendly incorporation statutes in the nation, it is considered a pro-business state. In fact, Nevada is unique for many reasons, including:
- When you form a Nevada entity, you won’t have to pay franchise taxes, tax on corporate shares, or personal income tax.
- Nevada has some of the strongest asset protection laws in the country, which protect business owners and their personal assets.
- There is no minimum capital requirement to incorporate in Nevada.
- Nevada requires only minimal disclosure of personal information at the time of start-up and at the time of annual filings.
- Directors and officers don’t need to live in Nevada, hold meetings in Nevada, or be a Nevada resident. An entity can be formed by mail, fax, or phone, and the person incorporating in Nevada never has to visit the state.
- In Nevada, the corporate veil may be pierced only if the owner of the company has committed deliberate misleading non-legal acts.
LLCs enjoy numerous tax advantages, which will help save you money. For example, LLCs avoid double taxation. While corporations pay taxes twice on the same profit (as business income and again as owner income), LLC shareholders are only taxed once on profits in their personal income.
Secondly, LLCs are eligible for the Qualified Business Income deduction (QBI), developed to help reduce the tax rate or obligation for small business owners. With the QBI deduction, up to 20 percent of your business income can be claimed as a deduction.
Additionally, LLCs can deduct health insurance premiums for the employed owner and family, as well as deduct the premium for disability insurance for business employees, including the owner. Office supplies and connectivity, charitable donations, home office expenses, and business vehicle/mileage also can be deducted.
A California “foreign LLC” refers to a business that has been created in a U.S. state other than California. If you plan to do business in California, the business needs to be registered in the state. In this context, “foreign” doesn't mean another country, but another state within the U.S. A business that was organized in the state where it does business is referred to as a “domestic LLC”.
California's LLC Act requires foreign LLCs to register with the state of California – if they are transacting any type of business within the state. Although this is not specifically defined, determining when state sales taxes must be collected helps to answer this question. Simply put, when a business has a physical presence in the state, it must collect sales tax on its sales to residents of that state.
For many small businesses, working remotely provides numerous advantages, such as money saved on office leases, as well as increased efficiency and productivity. But some business owners who run a business from home do not feel comfortable using their home address as a business address. That’s where virtual office addresses come into play. Virtual business address providers offer address-only services—including an actual street address that receives postal mail and packages at a secure location, while protecting a business owner’s privacy—or more extensive services, such as meeting space and administrative support.
While LLCs and S Corporations share some characteristics, they also have several specific differences: LLCs can have an unlimited number of members, while S Corps can have no more than 100 shareholders or owners. Additionally, non-U.S. citizens/residents can be members of LLCs, while S Corps may not have shareholders who are non-U.S. citizens/residents. And corporations, LLCs, partnerships, or trusts can’t own S Corps.
NCH is home to the 24-hour LLC. That means we can guarantee that your company will be established with the state within 24 hours.
Yes. All 50 states require businesses that register with a state as legal entities (LLCs, partnerships, corporations) to have a registered agent. As a result, NCH is a commercial registered agent in all 50 U.S. states.
Yes. NCH provides an Operating Agreement, which is compliant in all 50 states. An operating agreement is a document used by LLCs that outlines the business’ financial and functional decisions, including rules and regulations. The purpose is to govern the internal operations of the business. This agreement is necessary to protect the business' limited liability status, to clarify verbal agreements, and to protect your agreement in the eyes of your state. While only five states actually require LLCs to have operating agreements (California, Delaware, Missouri, New York, and Maine), it's a very good idea to maintain an operating agreement to protect your interests—regardless of which state you live in.
Yes. NCH includes the EIN in their offered services. An Employer Identification Number (EIN) is a nine-digit number assigned by the IRS for tax purposes and to open business bank accounts. The IRS uses the EIN to identify taxpayers who are required to file various business tax returns.
An LLC is considered to be a “domestic company” in its state of organization and considered to be a “foreign company” in every other jurisdiction. If an LLC wants to transact business in a state other than its state of organization, it must register as a foreign company with the other state’s business entity filing office.
Yes. NCH can help foreign file your business in any U.S. state in which you are doing business.