West Virginia LLC and Asset Protection
West Virginia LLC:
An West Virginia LLC
offers business entrepreneurs the form of corporate organization that provides perhaps the most flexibility to you. An LLC formation, like the alternative corporate forms of organization like a limited partnership
or a Subchapter S Corporation,
are generally prime candidates for a business juststarting. The state of West Virginia gives public support to an West Virginia LLC.
Should I form a West Virginia LLC?
An West Virginia LLC satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in West Virginia to your LLC. Your West Virginia LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your West Virginia LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.
West Virginia LLC
Advantages and Disadvantages
Advantages of Limited Liability Company
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of Limited Liability Company
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By West Virginia and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial West Virginia LLC members, the name and address of your West Virginia registered agent, the details of which will be introduced into the body of your LLC operating agreement and related West Virginia LLC formation documents assembled for application to the state of West Virginia.
West Virginia's 2008 Business Tax Climate Ranks 37th
West Virginia ranks 37th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Pennsylvania (27th), Ohio (46th), Virginia (14th) and Kentucky (36th).
West Virginia's Individual Income Tax System
West Virginia's income tax system is composed of five brackets with a top rate of 6.5%, kicking in at an income level of $60,000. Among states with personal income taxes, West Virginia's top rate ranks 20th highest nationally. West Virginia's 2005 individual income tax collections were $646 per person, which ranked 33rd highest nationally.
West Virginia's Corporate Income System
West Virginia's corporate tax structure consists of a flat 8.75% rate on all corporate income. Among states that tax corporate income, West Virginia's corporate rate ranks 11th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $293.12 per capita, which ranked 4th highest nationally.
West Virginia's Sales Tax Rate above National Median
West Virginia's state and local sales tax rate stands at 6%, which exceeds the national median of 5.4%. In 2005, state and local governments combined collected $1,225 per capita in general sales taxes, which ranks 25th highest nationally. West Virginia's gasoline tax stands at 31.5 cents per gallon, which ranks 13th highest nationally. West Virginia's cigarette tax stands at 55 cents per pack of twenty and ranks 39th highest nationally. The sales tax was adopted in 1933, gasoline tax in 1923, and the cigarette tax in 1947.
| West Virginia LLC Advantages and Disadvantages