ther states may require a certain level (usually substantial) of capitalization or net assets for a corporation to be respected and not pierced. Sometimes failure to comply with annual formalities (like stockholder meetings, corporate minutes, and Board of Directors’ meetings) may be viewed as sufficient reason for piercing the veil.

Nevada takes a much more liberal approach. In fact, its supporters enjoy highlighting the fact Nevada has only allowed the corporate veil to be pierced twice in the past 26 years. There have been many Nevada corporations that neglected documenting resolution

Once a decision had been made to incorporate, the next question will inevitably be where to incorporate. One of the more attractive options available is to set up a Nevada corporation.

There are many advantages to forming a Nevada corporation, but before exploring these, it may be advisable to understand from the outset what incorporating in Nevada will not do for you.

Incorporating in Nevada will not lower costs

You must have heard the statement quite often that organizing a Nevada corporation will result in lower costs. The truth of the matter is that it won’t and that incorporating in your home state may well end up being cheaper. The primary reason is that Nevada imposes a number of fees on corporations domiciled in that state. Fees that many home states do not charge.

Incorporating in Nevada will not lower taxes

There is also a misperception that if you register as a Nevada corporation, you will lower your taxes. Whilst Nevada has no corporate income tax, you still need to file corporate tax returns in those states where you operate as a non-resident. Things sort of cancel out, and in the end you don’t really save. This myth of lower taxes is widespread, probably encouraged by incorporation service providers. These providers play on the extreme privacy that Nevada provides, thus implying that no one will ever find out. Privacy does not exactly equate to exemption from taxes, and it is not legally correct to believe that this will be the case.

Why then would you incorporate in Nevada?

Without question the most compelling reason to establish your business as a Nevada corporation is that the state offers the greatest protection from liability.

There is a well-established concept in corporation law called “piercing the corporate veil.” This is the legal process where a court removes the protection provided to the individual members of a corporation and holds those individuals personally responsible for the acts of the corporation. In other words, if the corporate veil is pierced in your corporation, you will personally become liable for its debts and obligations. Each state has different tests for evaluating the legal propriety of piercing the corporate veil.

Many states, such as California, Florida, Georgia, Louisiana, Texas, New York, and Pennsylvania, allow this process to be initiated quite easily. Other states may require a certain level (usually substantial) of capitalization or net assets for a corporation to be respected and not pierced. Sometimes failure to comply with annual formalities (like stockholder meetings, corporate minutes, and Board of Directors’ meetings) may be viewed as sufficient reason for piercing the veil.

Nevada takes a much more liberal approach. In fact, its supporters enjoy highlighting the fact Nevada has only allowed the corporate veil to be pierced twice in the past 26 years. There have been many Nevada corporations that neglected documenting resolutions

rporating in your home state may well end up being cheaper. The primary reason is that Nevada imposes a number of fees on corporations domiciled in that state. Fees that many home states do not charge.

Incorporating in Nevada will not lower taxes

There is also a misperception that if you register as a Nevada corporation, you will lower your taxes. Whilst Nevada has no corporate income tax, you still need to file corporate tax returns in those states where you operate as a non-resident. Things sort of cancel out, and in the end you don’t really save. This myth of lower taxes is widespread, probably encouraged by incorporation service providers. These providers play on the extreme privacy that Nevada provides, thus implying that no one will ever find out. Privacy does not exactly equate to exemption from taxes, and it is not legally correct to believe that this will be the case.

Why then would you incorporate in Nevada?

Without question the most compelling reason to establish your business as a Nevada corporation is that the state offers the greatest protection from liability.

There is a well-established concept in corporation law called “piercing the corporate veil.” This is the legal process where a court removes the protection provided to the individual members of a corporation and holds those individuals personally responsible for the acts of the corporation. In other words, if the corporate veil is pierced in your corporation, you will personally become liable for its debts and obligations. Each state has different tests for evaluating the legal propriety of piercing the corporate veil.

Many states, such as California, Florida, Georgia, Louisiana, Texas, New York, and Pennsylvania, allow this process to be initiated quite easily. Other states may require a certain level (usually substantial) of capitalization or net assets for a corporation to be respected and not pierced. Sometimes failure to comply with annual formalities (like stockholder meetings, corporate minutes, and Board of Directors’ meetings) may be viewed as sufficient reason for piercing the veil.

Nevada takes a much more liberal approach. In fact, its supporters enjoy highlighting the fact Nevada has only allowed the corporate veil to be pierced twice in the past 26 years. There have been many Nevada corporations that neglected documenting resolution

spread, probably encouraged by incorporation service providers. These providers play on the extreme privacy that Nevada provides, thus implying that no one will ever find out. Privacy does not exactly equate to exemption from taxes, and it is not legally correct to believe that this will be the case.

Why then would you incorporate in Nevada?

Without question the most compelling reason to establish your business as a Nevada corporation is that the state offers the greatest protection from liability.

There is a well-established concept in corporation law called “piercing the corporate veil.” This is the legal process where a court removes the protection provided to the individual members of a corporation and holds those individuals personally responsible for the acts of the corporation. In other words, if the corporate veil is pierced in your corporation, you will personally become liable for its debts and obligations. Each state has different tests for evaluating the legal propriety of piercing the corporate veil.

Many states, such as California, Florida, Georgia, Louisiana, Texas, New York, and Pennsylvania, allow this process to be initiated quite easily. Other states may require a certain level (usually substantial) of capitalization or net assets for a corporation to be respected and not pierced. Sometimes failure to comply with annual formalities (like stockholder meetings, corporate minutes, and Board of Directors’ meetings) may be viewed as sufficient reason for piercing the veil.

Nevada takes a much more liberal approach. In fact, its supporters enjoy highlighting the fact Nevada has only allowed the corporate veil to be pierced twice in the past 26 years. There have been many Nevada corporations that neglected documenting resolution

rporate veil.” This is the legal process where a court removes the protection provided to the individual members of a corporation and holds those individuals personally responsible for the acts of the corporation. In other words, if the corporate veil is pierced in your corporation, you will personally become liable for its debts and obligations. Each state has different tests for evaluating the legal propriety of piercing the corporate veil.

Many states, such as California, Florida, Georgia, Louisiana, Texas, New York, and Pennsylvania, allow this process to be initiated quite easily. Other states may require a certain level (usually substantial) of capitalization or net assets for a corporation to be respected and not pierced. Sometimes failure to comply with annual formalities (like stockholder meetings, corporate minutes, and Board of Directors’ meetings) may be viewed as sufficient reason for piercing the veil.

Nevada takes a much more liberal approach. In fact, its supporters enjoy highlighting the fact Nevada has only allowed the corporate veil to be pierced twice in the past 26 years. There have been many Nevada corporations that neglected documenting resolution

ther states may require a certain level (usually substantial) of capitalization or net assets for a corporation to be respected and not pierced. Sometimes failure to comply with annual formalities (like stockholder meetings, corporate minutes, and Board of Directors’ meetings) may be viewed as sufficient reason for piercing the veil.

Nevada takes a much more liberal approach. In fact, its supporters enjoy highlighting the fact Nevada has only allowed the corporate veil to be pierced twice in the past 26 years. There have been many Nevada corporations that neglected documenting resolutions and minutes, failed conduct meetings, had little capitalization, or commingled funds, amongst others without having the veil pierced. In most other states, these corporations would have been held culpable.

The bottom line remains that a Nevada corporation offers more privacy and confidentiality than any other state. Perhaps even of greater importance is the fact that stockholders, officers and directors of a Nevada corporation are safeguarded in most instances against being held personally liable. Next to these, the other advantages of incorporation in Nevada pale by comparison.