Nevada State Corporation: The Growing Popularity Of Professional Corporations

September 24, 2004
By Richard Smith

Provided you are a licensed professional, Nevada state now permits you to incorporate your business as a professional corporation. So, why incorporate yourself as just such a Nevada state corporation, and what benefits can you derive from such?

Licensed professionals, such as accounts (CPAs), lawyers and doctors incorporate their business as a professional corporation so as to allow them to carry-on their business in the normal manner of a professional corporation. However, unlike the case with other corporations, professional corporations cannot limit any liability they may have towards their clients and third parties by reason of any malpractice claim.

Historically it has not been possible, as professionals, for professionals to carry-on their business in the same way as other corporation have; and event today it is not possible for a professional corporation to have shareholders who are not in the profession – and in normal circumstances, directly related to the business in question, i.e. members of the business.

Notwithstanding this, one of the great advantages of professionals incorporation themselves in Nevada, as professional corporations, is that they can benefit from the minimal reporting requirements (typically popular among professional businesses), whilst also benefiting from the zero-rate corporate tax rate.

A further additional benefit that professionals find with incorporating their business in Nevada is that they are not actually required to maintain a presence in the state (although, in such circumstances they need to appoint a representative agent). Thus, it is possible for a professional law firm to practice its business in the State of New York, whilst enjoying all of the benefits associated with being a Nevada registered incorporation; including the minimal capital requirements for establishing themselves as a Nevada corporation. For this reason, Nevada is now becoming a popular place of incorporation among professionals looking to establish a professional corporation.