There are many reasons why we chose to incorporate our businesses. As owners, we have the vision and the fortitude to be successful but we also have all the liability if things go bad. Let’s face it sometimes things happen in business that are out of our control. That is why I incorporated my business and most of my clients’ businesses in Nevada. Even though a vast majority of my clients reside outside of Nevada, as business owners, we are free to choose any state in which to incorporate. However, it is important to realize that some states have advantages over others. Nevada is one of those advantageous states.
Nevada does not allow for the owners of a corporation or LLC to be personally held responsible in the event the business is sued. The reason over 50,000 new entities were filed in 2017 and over 400,000 to date is mainly because of the separation Nevada offers. Did you know from 1987 to 2007, there was only one case that successfully pierced the corporate veil of a Nevada corporation? In this case, the only reason the veil was pierced was due to fraud that was carried out by the owners of the business.
Nevada Corporations also have what is known as Charging Order Protection. A charging order is an order issued by a court directing an LLC’s manager to pay to the owner’s personal creditor any distributions of income or profits that would otherwise be distributed to the member. In (laymen’s) terms, this means that if your LLC is sued and a judgment is granted the person who sued you will not receive one penny.
Another reason Nevada is so popular is because we do not have any corporate or franchise tax. This means the only tax return a company doing business in Nevada pays is to the federal government. This saves Nevada based businesses on average 20% more than a company doing business in other states. For example, in 1950 California adopted what is known as a Franchise Tax Board (FTB) which means any corporation that is set up to do business pays a minimum of $800.00/year. Most companies pay thousands of dollars in California because of this tax because it depends on the success of the company to determine how much money is paid to the state. Over the past decade, the FTB has collected an average of $9.5 billion per year in corporate income taxes. California is the not the only state with such outlandish tax rates; almost every other state there is a corporate tax, which more often are flat regardless of the amount of income, generally ranging from 4% to 9%.
Why is Nevada one of the Most Popular States for Incorporation?
• NO corporate or personal income tax… even if the business operates outside the state.
• NO taxes on corporate shares.
• NO franchise tax.
• A Nevada business court that minimizes the time, cost and risk of commercial litigation.
• Minimal employer payroll tax.
Incorporate or Form an LLC Today and Benefit From:
Personal Asset Protection, Tax Savings & Increased Credibility
The best part about doing business in America is we are free. Free to choose where to run our business and free to choose where to incorporate our business. Even if you have incorporated in your home state you are able to convert your Corporation/LLC to Nevada. Corporate Capital’s processing department is familiar with all 50 states so regardless where your business is currently operating we can make you a Nevada Corporation/LLC in as little as a couple days. You can also dissolve your entity in your home state and start brand new in Nevada if that is something you want to do. At Corporate Capital we offer a consulting membership and will determine if and where your business needs to be registered. In some cases, businesses DO NOT need to register in their home state and can stay domiciled in Nevada which is the best scenario possible
As you can see if you do not incorporate in Nevada you are risking to lose everything you have worked so hard to achieve. You are literally throwing money down the drain. You are paying taxes that may not pertain to you but are paying them anyway just because of the state you are incorporated in.
For more information, feel free to call our office in Las Vegas, Nevada, at 855-371-0070. We’ll be happy to help you and look forward to speaking with you soon!