When a new business decides to incorporate there are some things to decide early in the process. One of the issues a company needs to consider is whether or not to file an entity as an S corporation as opposed to a standard C corporation. There is really no difference between the two business entities as far as asset protection or estate planning goes, but there’s a huge difference in the way the two corporations are taxed.
The Difference Between C Corporations and S Corporations
C corporations are the publicly traded companies you see everyday on Wall Street such as Microsoft, Intel, or Apple. The defining feature of a C corporation is that they are taxed at the corporate level. A lot of small businesses don’t want to be taxed like this; they would rather be taxed at the owner or shareholder level. When businesses choose to be taxed at the owner level this classifies them as an S corporation. The main difference is how the owners want the profits and losses to be taxed. If they want the taxes to stay with the business then a C corporation is the appropriate choice and if they want to be taxed at the owner level then an S corporation classification is proper.
Both classifications offer limited liability protection, so shareholders are typically not personally responsible for company debts or liabilities. Both have shareholders, directors and officers. Shareholders are the owners of the company and elect the board of directors, who in turn oversee and direct corporation affairs and decision-making but are not responsible for day-to-day operations. The directors elect the officers to manage daily business affairs.
The big disadvantage to C-corp taxation is that distributions of profits, known as dividends, are subject to double taxation. In other words, the corporation is taxed once on its income, and then the shareholders are taxed upon any dividends they receive.
The Advantages of an S Corporation
It is important to know whether a company qualifies to make the S corporation selection. To be eligible to choose an S corporation the company must be domestic, not have more than 100 individual shareholders, shareholders must be U.S. residents, and certain business types like financial institutions are not allowed to use this classification. The main advantage of S corporations is that they are not subject to the standard corporate tax rate and may pass self-employment tax breaks to its members. Generally, S corporations are not subject to federal income tax other than tax on certain capital gains and passive income, S-corps are treated the same way as a partnership in the fact that taxes are not paid at the corporate level. Profits or losses of S corporations are passed directly to the shareholders as income, similar to that of a partnership, so there is no issue of double taxation because there is no tax liability on corporate income. Because the corporate profits pass through the business to shareholders income, shareholders can be taxed on money they did not receive. This could occur if the company elected to retain some of the profits and use it as working capital. On the plus side, the IRS allows S corporations to make additional distributions of profits to shareholders tax-free. However, this cannot be used as a mechanism to avoid the income tax liability the officers of the company should incur for the work that they did during that tax year. In other words the IRS expects S corporations to pay out a reasonable salary to officers that are actively involved in the company’s operations.
S corporations combine the benefits of partnerships (single taxation) with the limited liability offered by corporations. C corporations, on the other hand, allow for more flexibility in the number and type of shareholders, as well as different classes of stock. Understanding the differences, advantages, and disadvantages are crucial when deciding to incorporate a business.
Last November, Nevadans voted yes on Question 2 to legalize the recreational use of marijuana. The ballot required the state to begin sales by January 1, 2018, but recently the Nevada Tax Commission approved temporary regulations that would allow businesses launch as early as July 1, 2017. The “early start” program’s proponents cite that there is a discrepancy in the new law because it is currently legal to possess marijuana, but not to purchase or sell marijuana. This has lead to an increase in sales by local black market dealers. Additionally, Nevada is depending on the estimated $70 million in tax revenue from marijuana sales to help fund public education, which we desperately need.
Who Will Be Allowed to Sell Marijuana for Recreational Use?
The only businesses eligible to participate in the early start program for recreational sale must already be established as medical marijuana facilities. The application period will begin in the middle of May and conclude at the end of the month. There will also be another short (5 day) application period that will take place later in the year. Nearly all of Nevada’s current 190 marijuana license holders are in good standing and are eligible to apply for a recreational license.
How Dispensaries Apply for a License
Applicants must pay a one-time, nonrefundable application fee of $5,000 plus a license fee of $20,000 for a retail store, $30,000 for a cultivation facility, $10,000 for a production and manufacturing facility, $15,000 for a testing facility and $15,000 for a marijuana distributor. Additionally, for the first 18 months of applications, only registered medical marijuana businesses can be accepted. Licenses that are issued during the early start period will only be valid until 90 after January 1, 2018.
What Does This Mean for Nevada?
The recreational marijuana industry is a huge opportunity, primarily for Las Vegas, to grow. In addition to the millions of dollars in tax revenue that the sale of recreational marijuana will provide, it will also increase tourism, as Nevada is now one of only eight states to have legal recreational marijuana use. New businesses mean more businesses, more businesses means more jobs, and more jobs means more money for the economy. Further, the regulation of the recreational marijuana industry will allow users easy access to medically tested and approved products while limiting the expansion of the black market which could lead to a reduction in drug related violence. It is an exciting time to be living in the entertainment capital of the world.
Contrary to what some believe, getting injured on private property does not automatically mean that the owner or occupant is liable, but if the victim can prove that the owner or occupant was negligent, they may be able to recover their damages under Nevada law.
To understand more about who can sue and/or claim damages after getting injured on private property, consider the following information before contacting a Nevada personal injury lawyer.
Requirements for Premises Liability After Getting Injured on Private Property
At minimum, a personal injury case based on premises liability and negligence requires the injury victim (plaintiff) to show the following things:
- 1. The defendant actually owned the property or occupied it by way of lease or contract;
- 2. The defendant was negligent in their use of the property because:
- a. They had a duty of care to the plaintiff, and
- b. They breached that duty;
- 3. The plaintiff was harmed on the private property; and
- 4. The defendant’s negligence was the cause of that harm
Proving the first element can be relatively easy in most cases, unless the relationship between the landlord and lessee was complicated for some reason. But it gets more complicated after that. For example, proving that the owner/occupant had a duty of care to the plaintiff takes more legal analysis because of the different duties owed to different property visitors.
Proving Negligence Based on the Type of Property Visitor
There are several different types of visitors on properties, and each is owed a different standard of care.
- Invitees are customers or people who are explicitly invited onto a property to the benefit of the owner/occupant. Someone entering land open to the public is also considered an invitee. Owners/occupants have a duty to make their properties “reasonably safe” for invitees.
- Licensees are those who have express or implied permission of the owner/occupant to enter their property; this can include social guests. A licensee can become a trespasser if they are asked to leave the property and refuse. Owners/occupants have a duty of care to disclose or remove hazards that the licensee would not be able to reasonably anticipate as an “ordinary person” would.
- Trespassers are someone who unlawfully enters private property. The only duty of care an owner/occupant has to a trespasser is that they cannot willfully or wantonly harm the trespasser without first warning the trespasser and/or giving them the opportunity to retreat. For instance, razor wire must be visible to potential trespassers or disclosed with visible warning signs.
Because of these different categories, an owner/occupant who was negligent to an invitee may not be negligent toward a licensee. The occupant may also have different duties of care compared to an owner. For example, someone renting a house may not be responsible for maintaining structurally sound flooring, while a landlord may not be responsible for a tenant who leaves slipping hazards littering their home’s floor.
Given the complex nature of premises liability suits, a person who has been injured on private property needs the representation of an experienced Nevada personal injury lawyer to represent their claim.
If you have been injured on private property, contact Connor & Connor now to receive a free consultation regarding your case.
Thinking of sealing your criminal record in Nevada? Record sealing can be a beneficial process for those who have been convicted of a crime and who wish to protect their criminal records from being viewed by most non-governmental agencies. The process can be burdensome for the average person, so most choose to use an experienced Nevada attorney to assist with the record sealing process.
Expungement vs. Criminal Record Sealing
Expungement is the process of having criminal convictions, charges or investigations completely removed from your record, as if they had never happened. Unfortunately, since expungement is not available in Nevada, our focus lies on criminal record sealing. Record sealing makes past convictions inaccessible to the general public without a court order. Effectively, most people conducting background checks are unlikely to access such records. Note that some organizations like the FBI may also still be able to access these records, so consider consulting who can and cannot see your files with a Nevada criminal attorney.
Find out If Your Cases Are Eligible for Sealing
Because record sealing is so advantageous, Nevada courts are frequently inundated with record sealing requests. Therefore, the process of having your records sealed will be lengthy and require many bureaucratic maneuvers before it can be completed. Only certain criminal charges are eligible for record sealing. To qualify, the individual’s sentence must have been completely carried out, including all probation time and community service. After this sentence is fully completed, a period of waiting time equivalent to the crime’s statute of limitations must pass, starting on the day that the last element of the sentence was satisfied.
Additionally, some crimes are completely ineligible for record sealing. These include:
- Crimes perpetrated against children
- Some domestic violence charges
- Sexual offenses
- Vehicular homicide while under the influence of drugs or alcohol
- Crimes for which you received a dishonorable discharge from probation
Additionally, you must apply for record sealing within each respective jurisdiction under which your conviction was made. A further important point to note is that Nevada state policy does not allow for partial record sealing; ALL crimes and charges must be listed on your sealing request.
Obtain Criminal History Reports and Submit Record Sealing Forms
Once you have established that your criminal cases are eligible, you must obtain a copy of your complete criminal records from both the Nevada Criminal History Central Repository and the respective police department under which your cases were filed, such as the Las Vegas Metro Police Department or the Henderson Police Department.
Then, you must submit the following forms:
- Original Signed Petition and 1 copy for DA’s office
- Original Signed Order and 1 copy for DA’s office
- Original Signed Affidavit and 1 copy
- 1 copy of local law enforcement agency SCOPE (you keep the original)
- 1 copy of your Criminal History Report (you keep the original)
- A 9” x 12” self-addressed envelope with a minimum of $2 postage
Mail all of these items to the Office of the District Attorney or their Record Sealing Coordinator in a paid 9” x 12” UNPADDED mailer with at least $2 postage.
Receiving Approval and Arranging a Rehearing
If your attempt was successful, the District Attorney’s Office will mail back all of your corresponding documents while keeping the ones they need. You may then submit the approved documents to the court clerk for filing. And to complete the process, the signed Order will be sent to the agencies requested to seal your records from those agencies.
If unsuccessful, Nevada allows for up to two re-hearings where you can submit your Order, Petition, and Affidavit while attempting to correct their reasons for denial.
You can review this helpful guide to record sealing in Nevada for more information or advice, but the process has the reputation of being time-consuming and confusing. You might want to consider getting the help of a Nevada record-sealing attorney to assist you throughout the process. Contact Connor & Connor Attorneys at Law for help and information regarding record sealing today.