Types of Corporations in the State of Nevada
A corporation is a legal business entity that is owned by shareholders. Nevada law permits various types of corporations to be chartered. The types of corporations in Nevada include C corporation, S corporation, close corporation, professional corporation and limited liability company (LLC).
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C Corporation
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A C corporation, also called a regular or standard corporation, gets its name from sub chapter C of the Internal Revenue Code. A C corporation files its own tax returns and pays taxes on its earnings. The shareholders also pay taxes on dividends or profit-sharing distributions they receive from the corporation.
S Corporation
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When business owners form a corporation, they can elect to operate under sub chapter S of the Internal Revenue Code. All S corporation shareholders must be individuals, and not corporations or other entities. In addition, all shareholders must be United States residents. An S corporation can have only one class of stock, and no more than 35 shareholders. The income and losses of an S corporation are passed through to the shareholders, and are reported on their personal tax returns.
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Close Corporation
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A corporation in Nevada can elect to operate as a close corporation, which generally operates more informally than other types of corporations. In Nevada, a close corporation may operate without a board of directors. A close corporation formed under Nevada law may have no more than 30 shareholders.
Professional Corporation
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A professional corporation under Nevada law is a corporation that is formed to render a service that is performed by members of a licensed profession, such as doctors, lawyers, accountants and architects. Formation of a professional corporation does not affect a professional's personal liability for negligence or malpractice.
Limited Liability Company (LLC)
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A limited liability company, or LLC, is a hybrid type of business structure that provides its owners the limited liability advantages of a corporation and some of the flexibility of an unincorporated business. The profits of an LLC are passed through to the owners, and are reported on the owners' personal tax returns. The owners of an LLC are referred to as members rather than shareholders.
Single -Member and Multiple-Member LLCs
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A multiple-member LLC has two or more owners, similar to a partnership. A single-member LLC has only one owner, similar to an unincorporated sole proprietorship. Nevada law, which states that one or more persons may set up an LLC, permits the formation of both single-member and multiple-member LLCs.
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