ADVANTAGES OF INCORPORATING IN NEVADA
- Delaware has a franchise tax; not in Nevada.
- Delaware has an income tax; not in Nevada.
- Delaware is regulated by a corporation commission, not in Nevada.
- Delaware reports tax information to the IRS; not in Nevada.
- In Delaware, you have to report the date of your annual meeting; not in Nevada.
- In Delaware, you have to disclose the location of your principal business outside of Delaware; not in Nevada.
- In Delaware, stockholder info is public record - not in Nevada.
- Delaware's annual filing fee is about $150 - it's $85 in Nevada.
Nevada vs. “Offshore”
Nevada is unique in that it not only offers a high degree of privacy but ready access to your capital that is not likely to be denied in even the most extreme turmoil that COULD develop in the world’s financial markets. In these highly uncertain economic times, long-range planning should take into consideration the possibility—even the probability—of extreme turmoil. In that event, there could be some real shock felt by those whose strategies are oriented around offshore structures. It is entirely possible that in a real emergency offshore funds would be totally inaccessible, depriving the owners of those assets the use of their own capital when they need it the most. For any situation where ready access to one’s capital is required, and especially if you wish to work with your capital, Nevada corporations are THE answer.
What about Delaware?
Delaware is NOT “tax-free”. Its franchise tax has a graduated rate depending on capitalization, amounting to a minimum of $30 and a maximum of $130,000. In addition, a Delaware corporation’s taxable income is taxed at the rate of 8.7%.
The fundamental distinction is that while Nevada’s statutes create benefits for private corporations, Delaware’s corporate statutes have primarily been designed to benefit shareholders of public corporations. Many large, public companies that trade on various exchanges across the country incorporate in Delaware to provide the best protection to their shareholders. In recognition of the foregoing, Delaware’s corporate law with regard to corporate takeovers is the strongest anywhere in the country. If you want to go public some day, Delaware’s disclosure requirements probably won’t bother you.
Nevada’s corporate law easily surpasses Delaware’s in terms of protection of corporate officers and agents. Delaware has recently adopted a statute that allows a corporation to limit the liability of a director for monetary damages—but officers are still not covered. The following acts of officers and directors would be protected under Nevada law, but are exposed to liability under Delaware statutes:
1. Acts or omissions not in good faith;
2. Monetary damages occasioned by acts of officers (directors are now exempt);
3. Breach of a director’s duty of loyalty;
4. Transactions involving undisclosed personal benefit to the officer or director;
5. Acts or omissions that occurred prior to the date that the statute which provides for indemnification of directors was passed and approved.
As a final point on the subject of Nevada versus Delaware, it is noteworthy that Nevada has NO RECIPROCITY WITH THE IRS; Delaware, like all other states, freely shares its data with the IRS.
Only One Person Required
Unlike many other states, in Nevada only one person is required to form the corporation. A single individual can be named as the entire Board of Directors and all of the officers.
Foreign Incorporators Are Welcome
The state of Nevada does not require that any of the directors or officers be residents of the state. In fact, an out-of-state individual can set up a Nevada corporation without ever being physically present in the state! In most foreign jurisdictions, a Nevada-based corporation can have an office and even effect sales through contractors without having to register to do business in the other state.
Low Cost
Additional Advantages
1. Nevada has minimal reporting and disclosure requirements.
2. Stockholders, directors and officers need not live or hold meetings in Nevada, or even be U.S. citizens. Such meetings may be held anywhere in the world.
3. Directors need not be stockholders.
4. A Nevada corporation may purchase, hold, sell or transfer shares of its own stock.
5. Nevada corporations may issue stock for capital, services, personal property (presumably not excluding “intellectual property”) or real estate, including leases and options. The directors may determine the value of any of these transactions and their decision is final.
6. Nevada law allows Bylaws to be changed by the directors.
7. Initial or minimum capitalization is not required—a Nevada corporation can be capitalized with “sweat equity”!!!
While many may yet be unaware of this fact (including, surprisingly, some otherwise pretty intelligent attorneys and accountants), NEVADA IS QUITE SIMPLY THE BEST STATE IN WHICH TO INCORPORATE, if you are looking for any measure of privacy, along with unparalleled liability protection—and, of course, tax savings as an added bonus.
“But I neither live nor do business in Nevada! So how can I take advantage of all of these benefits, which only seem to apply to those who do!?” No matter where YOU are, you can still avail yourself of the benefits that accrue to Nevada’s corporate shelters. And that just could be the Greatest Secret about Nevada corporations!
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Xtreme Business Solutions, Inc.
3838 Raymert Drive, Suite 3
Las Vegas, Nevada 89121
(702) 616-1929 - Telephone
(702) 616-9787 - fax
Email: info@xtreme-business.com
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