What is a Nevada Corporation:
A Nevada Corporation is a separate legal entity created under the laws of Nevada Revised Statute. A Nevada Corporation is a legal person in the eyes of the law. In order to be a considered a Nevada Corporation, you must file the correct formation documents with the Nevada Secretary of State. This is different than a partnership which can be an agreement between individuals. Officers and directors manage the Nevada corporation. Shareholders elect the directors and directors elect the officers of your Nevada Corporation. The Nevada Corporation provides limited liability protection to all shareholders – within limits. Shareholders are generally at risk for only the capital contributions and any debts personally guaranteed.
Nevada Corporation Taxes:
Nevada Corporations do not have a to pay state business income tax, state income tax, state estate tax, state franchise tax, state gift tax, state inventory tax, or any taxes on corporate shares. The tax climate in Nevada is considered one of the least burdensome in the United States. This means your Nevada Corporation will pay less in state taxes improving your bottom line of your company.
Nevada Corporation Record Keeping:
Maintaining well documented record keeping for your Corporation is very important especially when there are just as few shareholders. If you are sued or audited by the IRS, you will need to provide the proper record keeping that proves you are separate than your Nevada Corporation. So make sure that you do not jeopardize the corporate veil and keep proper records.
Shareholders, directors, and officers of your Nevada Corporation must observe the formalities in operating and administering the corporation. Any decisions regarding the corporation’s management must be made by a formal vote and recorded with the corporate minutes. Nevada Corporations must have annual meetings with all shareholders, directors and officers being properly notified.
5 Reasons to incorporate in Nevada:
- Piercing the Nevada corporate veil requires the presence of “fraud” or "manifest injustice”. This is the highest standard for personal indemnification available. NRS 78.138 (7)
- Charging order protection for stock of closely-held corporations protects stockholders of all Nevada Corporations with between 2 and 75 shareholders. Nevada is the first – and only – state to offer this level of shareholder protection! NRS 78.746
- Nevada’s charging order protection statute protects S corporations from losing their federal S election in the event of a judgment against a shareholder. This prevents potentially significant negative tax consequences. NRS 78.746.
- Reinstatement of entities has the legal impact as if the Nevada Corporation had always been in good standing, thus preserving the corporate veil. NRS 78.180(5)
- Efficient, predictable Business Court minimizes the costs and risks of business litigation with Nevada Corporations.