(Newswire.net — May 29, 2020) —
Limited Liability Companies (LLCs) are primarily a mystery to many entrepreneurs. Legal Zoom notes that an LLC combines the best elements of a corporation, sole proprietorship, and a partnership. A low cost LLC is a perfect way for an individual or small business person to protect themselves from the debts and liabilities that their company may accrue. If a company becomes the subject of a lawsuit and in so doing, loses that suit, the responsibilities are the company’s own. The owners of the company don’t need to use their own personal finances to pay for the business’s debt.
Creating an LLC
Before an LLC can begin to operate, the owners of a company like Kurz Dental Implants Dentistry
must fill out and file papers with the state, as well as comply with any other stipulations that the legislative body for the region dictates. Some states require LLCs to pay an additional tax for franchising. Creating a sole proprietorship or a partnership requires less legal and state fees, and not nearly as much paperwork. LLCs are distinct from corporations in that they can’t issue any stock, and aren’t required to hold annual or quarterly meetings. For some entrepreneurs, an LLC is a perfect trade-off, but figuring out where to incorporate your LLC requires a little understanding of state laws regarding the formation of companies. These states, mentioned below, offer the best solution for individuals looking to create an LLC.
Wyoming
Upcounsel mentions that Wyoming, as a state, is very encouraging to entrepreneurs who want to set up an LLC within their state. Both the corporate and individual tax rates within the region are 0%, and the sales tax rate is a reasonable 4% across the board. The lower sales tax makes for a lower cost of living than other areas. Property tax rate is a manageable 0.61%, which is almost half of the average tax rate across the entire US. The unemployment rate reads at 4.0%, meaning that LLC s that require workers will have a large enough pool of talent to choose from.
Alaska
Alaska is another haven for creating an LLC within the greater United States. The corporate tax rate is quite a bit higher. The Alaska Department of Revenue states that taxes for corporate entities are calculated on a sliding scale, with the maximum that a business may have to pay working out to 9.4%. Despite the massive corporate tax, individual tax rates remain at 0%, and sales tax rates as dictated by the state are also at 0%, although municipalities have the option to charge up to 7% within their region. The property tax rate is on par with the rest of the country, at 1.19%, but the massive unemployment in the area (7.3%) means that there are not enough jobs within the state – something businesses can benefit from.
South Dakota
South Dakota is another tax-haven state for corporate entities, making them an attractive option for those who aren’t enamored with Wyoming or Alaska. The corporate tax rate is non-existent, according to Tax Foundation. Individual tax rates are also 0%. Sales taxes are a little higher than average, working out to 4.50%, and property taxes are a bit higher than the average around the country (1.32% within the state). With an unemployment rate of 3.2% South Dakota is an ideal place for businesses who want to locate local talent to set up shop.
Florida
Florida has a lot to recommend it in terms of its pleasant weather almost all through the year. Corporate tax rates within the state are at a manageable 5.5%, with individual tax rates coming up to 0%. The sales tax rate of the region is much higher than those previously mentioned, working out to 6.00% across the board. The more significant tax rate results in a slightly higher cost of living to residents, despite the lack of individual tax. The state unemployment rate of 3.8% is ripe for companies to capitalize on a need for jobs for the skilled workers within the populace.
A Way to Manage Risk
LLCs are useful tools for risk management. In the right environment, the LLC can generate a lot of income for an individual or business entity while paying little to no earnings out in tax. Outside of the US, several countries operate as tax havens for LLCs, but these companies can be murky in their business dealings. Incorporating an LLC within a US region gives the business an added level of legitimacy.