llc tax form

PRIVACY, LAWSUIT, AND ASSET PROTECTION NEW MEXICO LIMITED LIABILITY COMPANIES OFFER: PRIVACY: < < < < NO PUBLIC RECORDS OF LLC COMPANY MEMBER NAMES NO DISCLOSURE OF MEMBER NAME(S) TO GOVERNMENT AT ALL NO ANNUAL REPORTS TO NM STATE GOVERNMENT NO NM STATE OR FEDERAL TAX RETURNS REQUIRED FROM LLC PROTECTION: < < < < BETTER LIMITED LIABILITY THAN A CORPORATION AVOID PROBATE & OTHER INHERITANCE PROBLEMS LLC CAN RUN A BUSINESS IN ANY STATE, AND OPEN BANK AND BROKERAGE ACCOUNTS LLC CAN OWN PROPERTY IN ANY STATE (VEHICLES, REAL ESTATE, ETC) COST SAVINGS: < < < < NO ANNUAL REPORTS TO STATE GOVERNMENT NO NM STATE OR FEDERAL INCOME TAX (OR TAX RETURNS) ON LLC NO COSTLY PROBATE OR INHERITANCE TAX FOR ESTATES NO EXPENSIVE CORPORATE SET-UP OR RENEWAL FEES WE WILL: < < < < < < < CONDUCT NAME AVAILABILITY SEARCH FOR THE LLC SET-UP THE LLC AND PROVIDE THE REQUIRED NM RESIDENT AGENT OBTAIN AN E.I.N. FOR THE LLC PROVIDE A MEMBER OPERATING AGREEMENT FOR THE LLC GIVE YOU THE BASICS ON HOW TO OPERATE THE LLC TEACH YOU HOW TO USE THE LLC TO PROTECT PROPERTY (REAL ESTATE IN PARTICULAR), AS WELL AS AVOID PROBATE OFFER OPTIONAL BANK ACCOUNT SET-UP, WITH CREDIT LINE ONLY $1495 NATIONAL BUSINESS SERVICES, 8400 MENAUL BLVD, STE. A-167, ALBUQUERQUE, NM 87112 (505) 559-4218 llcinfo@qwestoffice.net NATIONAL BUSINESS SERVICES FEE SCHEDULE NEW MEXICO LLC SET-UP: $1495 (ONLY $100 ANNUAL RESIDENT AGENT RENEWAL FEE) SECOND OR MORE LLC’s ONLY $995 EACH WHEN REQUESTED W/ INITIAL LLC. (Have second LLC be the member of the first one for even more privacy and lawsuit protection). U.S. MAILING (NEW MEXICO) ADDRESS, WITH FORWARDING FOR ENTITY: $400/yr. NATIONAL BUSINESS SERVICES 8400 MENAUL BLVD, STE. A-167 ALBUQUERQUE, NM 87112 (505) 559-4218 National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218 FREQUENTLY ASKED LLC QUESTIONS What is a Limited Liability Company? A limited liability company (LLC) is a mixture of the best of both worlds between a corporation and a partnership, without the formalities of a corporation, or the requirements of a partnership. For example, a New Mexico LLC can have as little as one member (which is impossible with a partnership), or an unlimited number of members. The member can be another entity, an individual, a trust, or even another LLC. LLC’s started becoming popular in the 1990's, and are the preferred vehicle for small, medium, and even some large businesses due to their flexibility, ease of operation, property protection, and low set-up and operating costs, especially compared to corporations. LLC’s are also an excellent vehicle for estate planning. What protection does an LLC offer? A New Mexico LLC offers its members the same sort of protection of a corporation from any claims made against it. In other words, unlike a sole proprietorship, no personal property of any member is at risk for any potential liability/ lawsuit claims that might be made against the LLC. Only the property of the LLC might ever be at risk for liability/ lawsuit claims made against the LLC. The property of an LLC also has the fortress-like protection of a partnership against claims that might be made against an LLC member individually. Generally, LLC property simply cannot be touched for whatever sort of claims might be brought against individual members. Even the IRS itself issued a memorandum in 1999 stating that it cannot levy on property of an LLC for a claim against the LLC member — even though it was a single member LLC! What can an LLC do? Generally, an LLC can do most anything an individual can do, such as run a business, own property, and make investments. Running a business, however, is subject to the laws of various states. For example, California claims to not allow an LLC to be registered with the state if there is any type of professional service for which a license, certification, or registration is required under the Business and Professions Code. However, California Corporations Code §17450 requires the state law of any non-California LLC (i.e. New Mexico) to govern company operations in California, and does not allow discrimination due to any difference in another state’s laws. Under this law, it appears a non-California LLC could render the above type of professional service if the state law where the LLC was formed allows (or does not prohibit) it. New Mexico has no laws which prohibit an LLC from rendering the above type of professional services. Another solution would simply be to have the LLC be a member of another entity (i.e. partnership, corporation, etc) which holds the license. How Does an LLC Set Up Brokerage Accounts? This will entirely depend on the particular broker. Since LLC’s are certainly mainstream entities, most brokerage houses will have account applications for this type of entity. National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218 How can an LLC be used for estate planning? The general idea for estate planning is to eliminate an individual’s property ‘ownership’ as much as possible so when the person dies there’s little if anything left for expensive, exhaustive probate proceedings (or estate taxes). Property that is conveyed to an LLC no longer belongs to an individual. It belongs to the LLC, a legally recognized, entirely separate entity (which never dies). Simply put, since property transferred to an LLC is not owned by the individual at death, it would not be part of the person’s estate. Therefore, the particular property would not be subject to probate proceedings. Although it is common for a new LLC member to convey property to the LLC in exchange for the membership, and that membership would be considered property of the individual (and therefore potentially property of his/her estate), there are a couple reasons the LLC would provide protection. First, membership in an LLC only gives a member rights to future income (or loss) distributions. (Remember, any individual rights to sell or dispose of property terminated with transfer of the property to the LLC; but members may still be able to use the property). Second, due to the extreme flexibility of LLC operating agreements, they can be written so that a member’s death will terminate all that member’s rights in the LLC (with distribution of those rights among other existing members). Since the member’s rights terminated at death, there’s no more property interest left to probate. Finally, all the above issues can be entirely eliminated for any property acquired after the LLC creation since the LLC can acquire it directly (without any initial individual ownership at all). Since the LLC never dies, and members can be changed virtually ‘at will’ (with consent of existing members), property can be held indefinitely for future generations without having to be ‘transferred’ from one person to another. What’s the difference between New Mexico LLC’s and those from other states? There are only a handful of states (New Mexico is one) which have the combination of low initial cost, non-disclosure of LLC members in government records (privacy), and no annual fee or tax on the entity (low operating costs). Nevada, for example, requires annual disclosure of all LLC member names and addresses, plus an annual statement and annual $125 fee (not including any resident agent fee) for any LLC formed, or even just using an address, in that state. California has similar disclosure requirements, plus a minimum $800 per year tax. How long does it take to set-up the LLC, including obtaining an EIN? Usually within 30 business/working days. What are the federal income tax issues for an LLC? For federal tax calculation purposes, an LLC entity is generally disregarded, and all income is considered belonging to either the single or multiple member(s), and divided/distributed according to the confidential operating agreement. Therefore, an LLC itself generally has no federal income tax reporting requirement (no federal tax form even exists for an LLC). Since the income is not tracked to any particular person (or entity), LLC members are responsible for voluntarily reporting any income on a personal (or entity) return (and National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218 partnership return for multi-member LLC’s). Because LLC’s are generally considered disregarded entities (or partnerships for multi-member companies), there is (nor could there be) any 1099 from the LLC to any member. A K-1 form is usually used for partnership reporting. Consult your tax advisor for further details. What are the state income tax issues for an LLC? This varies from state to state. For example, California has an annual LLC tax form and a minimum $800 per year tax on any LLC registered with the state office. New Mexico has no such form or tax. State tax issues depend on in which state(s) the LLC will be ‘doing business’. Note that not everything an LLC might do would be considered ‘doing business’ in a particular state (i.e. owning/renting real estate). Careful consideration should be given to the choice of address used for the LLC for any potential state tax issues. What are the third-party tax reporting issues for an LLC? Like corporations, payments to an LLC may not be reported at all by third-parties. However, if any payments to an LLC are reported, they would be done on a 1099 to the LLC name and EIN obtained at the time the LLC is set up. (Personal SSN’s can also be used for LLC’s, especially single member ones. But we don’t recommend this in order to maintain a distinction between the individual/member and the LLC entity). The same sort of reporting would be done for earnings of interest, dividends, and investment profits (or losses) the LLC may have. Is any personal information necessary for any government forms (LLC or EIN app)? No. Nor do we even ask for it for that purpose. The limited amount of information we obtain is for our contact information only, or for contact by other LLC members, if any (required by state law). It is strictly confidential. What are the advantages of a non-member manager for the LLC? No management headaches. More ‘arms-length’ protection of operation than if managed by LLC member. No potential for personal liability. More personal privacy since no interaction by the member(s) with the public. What are the annual NM resident agent fees for the LLC? Only $100/ year for the NM resident agent. If you are ‘doing business’ in another state, a resident agent will also be required in that state. What about a ‘principal place of business’ address? A ‘principal place of business address’ is required by NM state law and can be anywhere on the entire planet. This is the only location where any LLC member information, company records, etc is required to be maintained. National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218 What is necessary for assistance in setting up an LLC financial account? After your company is set up, we can also assist in opening traditional bank accounts. It may be hard to believe, but even today some banks and bank personnel still do not know the difference between LLC’s and corporations, and will ask for corporate documents (i.e. corporate officer authorizations, which don’t exist for an LLC) to open an LLC account. This has caused unnecessary aggravation, headaches, and ‘shopping around’ for banks by people. Therefore, we not only offer assistance in opening LLC accounts, but can do so by mail. In addition to the LLC papers filed with the state, the information necessary is the company EIN, copy of a government photo ID (i.e. passport, driver license), a signature card/ master agreement (supplied during set-up process), possibly an SSN for each signer on the account, and a $100 minimum initial deposit. A $250 fee is charged for assistance in opening an account, which is all done by mail. (Please note that bank policies regarding information for opening accounts can change at anytime, and are beyond our control). Is it Beneficial To Set Up An Offshore Bank Account? This question has arisen on occasion, and we take no position on setting up offshore bank accounts. The necessity or benefits of such accounts will depend on what the management of the LLC wishes to achieve. We have no information on such accounts and do not offer any assistance in opening them. National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218 NEW MEXICO LIMITED LIABILITY COMPANY APPLICATION FORM CONTACT INFORMATION: YOUR NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ NM LLC COMPANY INFORMATION: DESIRED COMPANY NAME: ____________________________________________________ #1 ALTERNATE NAME: _________________________________________________________ #2 ALTERNATE NAME: __________________________________________________ (Reprint this form if you wish to have more than one company at the same time). DESIRED LIFETIME FOR COMPANY: ___ YEARS G PERPETUAL PRINCIPAL PLACE OF BUSINESS ADDRESS (required by state law; can be anywhere : __________________________________________________County Name:_________________ G CHECK HERE IF YOU WANT A U.S. (NEW MEXICO OR NEVADA) MAILING ADDRESS W/ MAIL FORWARDING ($400/ YEAR). (This Is Different than a ‘Principal Place of Business’ Address) THIS LLC WILL BE MANAGED BY A: G MEMBER G NON-MEMBER NAME OF MANAGER (IF KNOWN AT THIS TIME): __________________________________ I AM INTERESTED IN LLC’S FOR: G ASSET PROTECTION/ ESTATE PLANNING G BUSINESS VENTURES G BOTH THE ABOVE PAYMENT INFO: G NEW LLC ORGANIZATION: $1495 G EACH ADDITIONAL LLC ORGANIZATION: $995 G U.S. BUSINESS MAILING ADDRESS W/ FORWARDING: ADD $400 (ANNUAL FEE) G I WOULD LIKE ASSISTANCE WITH OPENING A TRADITIONAL BANK ACCOUNT: ADD $250. SEND COMPLETED APPLICATION WITH PAYMENT (PAYABLE) TO: NATIONAL BUSINESS SERVICES, LLC 8400 MENAUL BLVD, STE. A-167 ALBUQUERQUE, NM 87112 OFFICE USE ONLY: RECV DATE: __________ F/P G P/P ______ AOO STAT: G SUB G RETURNED EIN STAT: G SUB G COMPL. SEAL STAT: G ORDERED G REC’D. BANK ACCT STAT: G COMPL. PTC: G COMPL; DATE_______________ National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218 MEMBER(S) OF LLC: NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ PERCENTAGE OF OWNERSHIP: ________ NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ PERCENTAGE OF OWNERSHIP: ________ NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ PERCENTAGE OF OWNERSHIP: ________ NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ PERCENTAGE OF OWNERSHIP: ________ NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ PERCENTAGE OF OWNERSHIP: ________ NAME: _________________________________________________________________ MAILING ADDRESS: ___________________________________________________________ CITY: ______________________________________ STATE: _______ ZIP: _________ PHONE: __________________ E-MAIL: __________________________ PERCENTAGE OF OWNERSHIP: ________ National Business Services, 8400 Menaul Blvd, Ste. A-167 Albuquerque, NM 87112 (505) 559-4218