Benefits of a Nevada Corporation: Everything You Need to Know
There are many benefits of a Nevada Corporation, particularly due to the enhanced anonymity, reduced tax implications, and personal liability protections that the state offers such corporations. 3 min read
Updated November 2, 2020:
Benefits of a Nevada Corporation
There are many benefits of a Nevada Corporation, particularly due to the enhanced anonymity, reduced tax implications, and personal liability protections that the state offers such corporations. In fact, many businesses, even those not primarily located in Nevada, will register in Nevada due to such benefits.
Some of the biggest advantages include the following:
- Flexibility in how and where to hold meetings
- Reduced taxes
- Limited liability
- Easy incorporation
- Residency requirements
Establishing a corporation in the State of Nevada provides you with privacy, as you need not disclose the names of any shareholders. In fact, such information is private as identified in Nevada law. However, the disclosure of directors and officers is often required. But if you want anonymity for such officers and directors, the State of Nevada allows nominee Directors and Officers, which can increase privacy. Such nominees essentially take the position of the actual owner of the company. Notably, most nominees have some signatory authority but no actual control over the corporation’s operations or funds. The nominees can also be ousted by a majority shareholder vote at any given time.
What’s more, Nevada allows corporations to use bearer stock certificates, which make it incredibly difficult to prove ownership of the corporation. Those holding the stock certificates have total control over how anonymous they are.
Flexibility in Holding Meetings
Nevada corporations can have their annual meetings anywhere they choose, even outside of the country. The meetings can even be held over the telephone or via video conference.
The ordinary individual tax rate is roughly 45% when accounting for the nominal tax rate, Social Security, and Medicare tax. But if you established a Nevada corporation, the first $50,000 of net profits are taxed at a corporate tax rate of 15%. Furthermore, such corporations don’t pay state income tax, along with franchise and capital stock tax, estate taxes, corporate income taxes, or corporate shares tax. Therefore, your corporation is only required to pay the federal tax. If you compare this to a state that charges all of the above-mentioned taxes, you will immediately see the increased tax savings.
Similar to any corporation, the owners of a Nevada corporation will enjoy personal liability protection. This means that creditors cannot go after the owners’ personal assets to satisfy any business debts. Nevada offers even greater asset protection for the shareholders, officers, and board of directors. In fact, Nevada courts are very hesitant to permit a plaintiff to pierce the corporate veil, which is a theory whereby a plaintiff can find the shareholders, officers, or directors personally liable for the business debts. Therefore, such parties can enjoy the added benefit that the state offers, as the court provides that only in extreme cases of fraud or illegal conduct will they allow piercing of the corporate veil.
It is very easy and straightforward to establish a Nevada Corporation. If your company’s net profits are $75,000 or less, you’ll pay a $125 fee and submit the articles of incorporation to the Secretary of State. The only other fee is the annual corporate fee of $85. Next, you’ll file a certificate for the registered agent appointment, which is signed by the agent. The company can be formed over the phone or on the Internet in as little as one day. The only other applicable fees that might be required are for licensing and permits. However, there is no capitalization requirement and no minimum number of people required to hold office.
There are no residency requirements for those overseeing a Nevada corporation. The only requirement is that the owner is at least 18 years of age. However, they can reside anywhere, whether inside of the U.S. or in a foreign country. This can be beneficial to those corporations wanting to do business internationally, but wanting to reduce state income tax if doing business in other states.
In order to increase the tax benefits that are available, the corporation must be a resident of the state, meaning that it must be physically located in the state. Therefore, so long as the Nevada Corporation has a physical office in the state, it will be able to increase its tax benefits.
If you need help learning more about the benefits of a Nevada corporation, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.