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12 Reasons Why A Nevada Corporation

Entrepreneurs from all over the world have realized that a corporation registered in Nevada is a desirable form of business. This is because Nevada corporations are relatively easy to create and maintain, and they benefit from favorable tax treatment and legal protections.

While Nevada doesn’t have the best weather or beaches, it does have a lot of things going for it for small businesses and corporations. In fact, many entrepreneurs are moving to Nevada specifically because of the benefits that exist there. What makes a corporation in Nevada so attractive? In order to understand why a Nevada corporation is beneficial, you first need to understand the primary role of a corporation. The purpose of a corporation is to limit the liability of its shareholders and offer them the opportunity to enjoy several tax advantages.

As a result, there are a large number of advantages to incorporating in Nevada, including favorable corporate income tax rates, flexible laws for out-of-state corporations operating in Nevada, and relaxed regulations regarding annual meetings. Given these advantages and Nevada’s desire to attract new businesses, many corporations would be wise to incorporate in the state.

 

12 Reasons Why a Nevada Corporation:

So whether you are sick of paying high taxes, have liability concerns that you want to avoid, or have chosen Nevada as the location for your dream business venture, incorporating your business in Nevada is likely a good decision for you. While there are some disadvantages to incorporating in this state, there are many advantages as well and it is an option worth considering if you want to incorporate. In addition, this article goes over the basic requirements that you need in order to create a Nevada corporation, so be sure to read through it carefully so that you can decide if it’s the right move for your business! Here are some the 12 Reasons Why Create a Nevada Corporation:

  • Privacy and Anonymity – Forming a company in Nevada almost assures shareholder privacy, as well as privacy for vice presidents and other business leaders. Shareholders are not a subject of public record in Nevada, and the identities of other executives in a Nevada company are protected and secret by Nevada law, with the exception of an appointed Director and Registered Agent. Nevada corporate law also provides for “nominee” Director and Officer nominations, which can improve privacy and secrecy even further. A nominee Director or Officer is someone who takes the place of the corporation’s “real” owner or controlling entity. Most nominated Directors or officers often have minimal signor authority inside the corporation, no control over corporate money, and no operational control over the corporation, and can be “voted out” at any time. 
  • Low Taxation – A Nevada Corporation can provide significant tax savings compared to a sole proprietorship, partnership or limited liability company (LLC). The nominal taxation rate at the Federal level is approximately 28%–and this is not factoring in such things as Social Security tax, and Medicare tax; these would amount to a total federal tax burden of close to 45% for a non-incorporated individual. In comparison, the complete elimination of double taxation offered by a Nevada Corporation reduces an individual member’s effective marginal tax rate to only 15%. Plus, you’ll get all the benefits of an LLC WITHOUT having to comply with those onerous operational requirements — and there are many.
  • Limited Liability and Statutory Protection – Quoting directly from the statute: (NRS 78.225) “Stockholder’s liability: No individual liability except for payment for which shares were authorized to be issued or which was specified in subscription agreement, no stockholder of any corporation formed in this State is individually liable for the debts or liabilities of the corporation.” Further, with respect to Directors or Officers of the Corporation, (NRS 78.747) “No stock holder, director, or officer of a corporation is individually liable for a debt or liability of a corporation, unless the stockholder, director or officer acts as the alter ego of the corporation.” Limited liability is a fundamental principle of Nevada corporate law. This means that shareholders in a corporation are not liable for its debts or other obligations to the extent of their respective incorporations (shares) in the corporation. 
  • No IRS Information Sharing – Most states in the union have information-sharing agreements with the IRS. Basically, this agreement allows the IRS to receive your company’s financial information from your state’s department of revenue. Nevada is one of just a few states that do not have an information-sharing agreement with the IRS and don’t allow the IRS access to any personal or corporate financial records. Nevada is also rated as one of the most tax-friendly states for corporations to incorporate.
  • Stock Flexibility -A corporation’s greatest tool is its ability to issue shares of stock. There are a variety of reasons you might consider doing so (for example, to attract investors or incentivize employees).  But in some cases, issuing additional shares of stock can result in “double taxation.” Nevada corporations can issue different series of stock with distinct values and rights, but there must be consistency within the series, and these values and rights must be defined in the articles of incorporation or by board resolution.
  • Fast, Simple Incorporation – Nevada businesses can even be founded over the phone or over the internet in less than 24 hours. There is no minimum corporate capitalization requirement (other than the filing fee), nor is there a minimum number of persons necessary to occupy the different corporate officer roles–in Nevada, one person can hold all officer posts if they like. 
  • Residency Requirements – With no residency requirements, Nevada Corporation code offers a simple alternative to avoid residency issues of other states and countries. Ongoing tax savings can be achieved as well through the careful use of Nevada Corporation code. 
  • Nevada Corporate Formalities Requirements – Corporations should conduct lawful business and offer investors a profitable return. A corporation incorporated in Nevada offers both of these benefits. It should be evident that choosing Nevada as the state to incorporate offers substantial advantages not readily found in other so-called low regulation states. From privacy to ultra-low taxation, Nevada’s favorable business laws are hard to beat!
  • Privacy – Many people wonder what the difference between a Nevada Corporation and another state’s corporate entity is. There are many differences, but one of the largest differences is the reporting required by Nevada Corporate officers and those who serve in roles like directors. The good news is that under Nevada company law, “Nominee” officers and directors can also be appointed. A nominee Director or Officer is someone who takes the place of the corporation’s “real” owner or controlling entity.

    Furthermore, by appointing nominee officers and directors of a corporation (remember that in a Nevada corporation, one person can simultaneously fulfill director and officer responsibilities), these assets are kept even more private and difficult to locate–your name does not have to appear anywhere on the list of officers and directors of a corporation over which you have complete control. 
  • Using Nevada Businesses to Reduce Taxes – Reducing your tax liability is not only a smart business practice, but it is your right and duty. Every savvy business person should have a tax reduction strategy in place. The more you pay in taxes, the less capital you have to use for the next venture. That isn’t good for profit or growth. Reducing taxes shouldn’t be your focus as an individual entrepreneur, but it should be on your mind as a smart business owner who knows there is no free lunch. The goal is not to always pay the least amount of taxes. There’s no point in paying $250 in taxes if you can save $1,000 doing so. 
  • Corporate Tax Reduction Basics -The most significant advantage to a Nevada Corporation is that it is not taxed by the state. All profits generated by a Nevada corporation are passed through to its shareholders and taxed as personal income. 
  • Asset protection advantages – Nevada is also a popular choice for establishing an Asset Protection Trust. The assets held by an Asset Protection Trust are protected against judgment creditors. Only a few states enable you to set up an asset protection trust for yourself, and Nevada is one of them.

 

Conclusion:

As you can see, the benefits of incorporating in Nevada are clear. You don’t have to pay state income tax or franchise tax on your profits, which means you keep more of your money. If you run into legal issues down the line and incur substantial liability, a Nevada corporation will protect your personal assets and shield them from outside litigation. By incorporating in Nevada, it also means that other states will be far less likely to try and hold you personally liable for any debts that might be incurred by your business. And financially speaking, since there is no state income tax, operating a corporation in Nevada can actually save you money. Ultimately, incorporating your business in Nevada is one of the smartest (and cheapest) business decisions that you could make for your new company.

 

(12 REASONS WHY NEVADA PDF DOWNLOAD)
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