Q: What's So Special About A Nevada Corporation?

A: Nevada is a great state in which to incorporate. It offers a plethora of tax benefits to those that incorporate properly, all the while giving the business a chance to flourish amidst the ever-growing population. Nevada also offers corporations the legal protection they need to avoid lawsuits -- and to keep their owners, partners, or members from becoming personally liable for any mistakes the corporation makes.

Incorporating in Nevada -- or, indeed, organizing, as in the case of a Limited Liability Co. or partnership, -- means that the veil of secrecy surrounding your corporation will be reinforced by the state's pro-business atmosphere.

Q: What Are These Tax Benefits to Nevada Corporations?

A: There is one major, important tax benefit in Nevada: There are no corporate/franchise taxes at all! That's right, absolutely none. If your business has been set up properly, the state will not exchange information with the IRS, which saves you thousands - tens of thousands - or even millions of dollars yearly. What's more, this very same action protects the confidentiality of your business, so that, once again, your corporate veil is not penetrated, and you can continue on with your day-to-day operations. Why wouldn't you want to incorporate in Nevada, then?

Q: What Are Some Examples Of Corporate Secrecy?

- Your members
In Nevada, the names of the members in the corporation do not need to be disclosed on state lists, as they do on the registers on many other states. This means that each and every person involved in the corporation can enjoy the protection of state law without needing to worry about having his or her names available to the public. What's more, most other states also require addresses and phone numbers for each managing member in the corporation, which can be devastating if there are stalkers or lawyers hounding the business partners. Nevada doesn't even require the business partners to be United States citizens, which can certainly be advantageous if you have foreign interests.

- Your documents
You are also not required, as a Nevada Corporation, to disclose the activities in your documents. This includes your individual tax returns, profit reports, or books. Most states have a mutual agreement with the IRS to allow the government to go through a corporation's tax returns and hold each person involved with the management of the company personally responsible for the goings on within the corporation, even if it is an LLC. Nevada, on the other hand, keeps the IRS from ever seeing your documents, unless if there is some serious wrongdoing.

Q: What Mistakes Do People Make?

- Not keeping proper records
Not keeping minutes or resolutions, even if you're the only person in the company, can lead to some trouble. You need to make sure that there are hard copies of all of your records if you're going to follow the rote of the corporation rather than the LLC, because if you do not then lawyers may be able to come after you personally rather than the company you're running or working for.

- Not enough funding for the company
Insufficient funds to cover the company's expenses are a problem, indeed, especially if one of your employees injures him or herself and you're slapped with a lawsuit that's just too heavy. Insurance can only go so far. You need to be absolutely certain that there is enough money to take care of both your day-to-day activities and emergencies.

- Mingling personal and business funds
This is called the commingling of funds, and it involves using business money to pay for personal experiences. Many a scandal in the tabloids has to do with this particular subject: the corrupt businessperson laundering or embezzling funds from the corporation in order to pay off gambling or travel debts, or to live the high life. The best advice from us to you is to NEVER use business cash to fund anything of your own.

Q: How To Incorporate Properly

A: The best advice on how to incorporate properly is to avoid the above mistakes most people make, and to follow Nevada state law. You need to read and to understand everything that the laws have to offer before you make the decision to form your business in the state, otherwise you may be endangering your personal profits from the get-go.

 






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