Key Takeaways

  • Anonymity and asset protection are major draws for forming a Nevada corporation, with options like nominee officers and strong veil-piercing protections.
  • Tax benefits include no state corporate income tax, franchise tax, or taxes on corporate shares.
  • Operational flexibility allows remote meetings and no residency requirements for directors or officers.
  • Ease of incorporation is bolstered by minimal fees, quick processing, and limited formalities.
  • Business-friendly legal environment includes pro-business statutes and courts that support corporate protections.
  • Prestige and credibility can increase when associating your company with Nevada’s pro-business reputation.

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:

  1. Anonymity
  2. Flexibility in how and where to hold meetings
  3. Reduced taxes
  4. Limited liability
  5. Easy incorporation
  6. Residency requirements

Anonymity

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.

Reduced Taxes

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.

Limited Liability

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.

Easy Incorporation

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.

Business-Friendly Legal Environment

Nevada is renowned for its pro-business legal framework. The state offers one of the most flexible corporate statutes in the U.S., modeled closely after Delaware but with added emphasis on privacy and asset protection. Nevada's courts, particularly the Business Court in Clark and Washoe counties, specialize in corporate law, providing efficient and knowledgeable resolution of business disputes. The state also does not require corporations to maintain extensive records or adhere to burdensome regulatory formalities, making compliance easier for business owners.

Residency Requirements

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.

No Corporate Ownership Disclosure Requirements

Unlike many other states, Nevada does not require the disclosure of corporate ownership in public filings. While the names of directors and officers must be listed on the Annual List filed with the Secretary of State, shareholders can remain completely anonymous. This level of confidentiality is a significant advantage for business owners who prioritize privacy. Moreover, nominee services allow directors or officers to be listed without revealing the actual controlling parties of the Nevada corporation.

Enhanced Corporate Credibility and Image

Forming a Nevada corporation can lend a heightened sense of legitimacy and professionalism to a business. The state is known for supporting entrepreneurial ventures and business innovation, which can be attractive to investors, partners, and clients. A Nevada incorporation can also signal to stakeholders that a company is serious about its legal structure and long-term operations, particularly if combined with a registered business address and compliance with corporate formalities.

Frequently Asked Questions

1. Do I need to live in Nevada to form a Nevada corporation?

No. Nevada does not impose residency requirements for directors, officers, or shareholders of a corporation.

2. Can I run my Nevada corporation from another state?

Yes, many businesses operate from other states while being incorporated in Nevada. However, you may need to register as a foreign corporation in your home state.

3. What taxes does a Nevada corporation have to pay?

Nevada corporations are exempt from state corporate income tax, franchise tax, and taxes on corporate shares. Federal taxes still apply.

4. How quickly can I form a Nevada corporation?

A Nevada corporation can typically be formed within one business day online, assuming all documents and fees are submitted correctly.

5. Are there annual fees for maintaining a Nevada corporation?

Yes. Nevada requires corporations to file an annual list of officers and directors and maintain a registered agent. The annual business license fee is also mandatory.

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.