Asset Protection - Nevada C Corporation:

What it is and how it can help your business

September 22, 2004
By Monish Datta

Asset protection can be explained as the process of taking steps to minimize the risk of creditors or other claimants from being able to reach your assets. This can include setting up a different entity, such as an LLC, Nevada "C" Corporation etc.

Thus, if one particular property is subject to a suit (e.g., a tenant is hurt on one rental property) the claimant will be limited to the assets from that particular property or entity. This can prevent a domino effect against your other assets.

Nevada corporations are preferred by businesses because of many reasons. Each aspect of your business can be protected separately from a legal standpoint. Forming a Nevada C corporation allows businesses to take advantage of favorable incorporation lows and tax policies.

What a C corporation basically is, is a legal corporate structure that separates the people who run the business from the business itself. A C corporation is considered is regarded as it's own person under the law. Under the prevailing guidelines, you may issue stock shares, as evidence of ownership to the person, persons, or entities that invest money in the business. Forming a C corporation ensures that if the corporation is liquidated, shareholders are entitled to all of the corporations assets after all outstanding debts are paid.

C Corporations offer more protection and options for business owners in almost every case. Shareholders, directors etc. need not live or hold meetings in Nevada, Directors need not be shareholders, and corporations may issue stock for capital, services, personal property or real estate.

With benefits like these, it is no surprise that the forming of Nevada corporations have increased over the years. However, it is crucial that Nevada corporations for Asset protection are formed properly. Failure to comply with rules may cause legal and tax challenges.