Incorporation offers several benefits to business owners. Many small businesses have chosen to form corporations. Several states have laws favoring incorporations, but incorporating in Nevada is popular because it offers several benefits. In Nevada small businesses flourish as corporations due to the liability protection of owners, tax deductions, and the perpetual life of corporations independent of the shareholder’s life. Below is a list of advantages for incorporating in Nevada.
1. Nevada has established a corporate structure that helps the owners and the investors of the corporation to remain private. Laws uphold corporate privacy even when the corporation fails to follow some of the formalities. Shareholders are not required to disclose any kind of information. Corporations issue bearer stock certificates that make it very difficult to prove ownership of the corporation. A person can have complete control and ownership of a corporation and yet remain anonymous. Stockholders are not on the public records and Nevada corporations have minimal reporting and disclosure requirements. The filing of names is done annually and any intervening changes don’t need to be reported. Corporations may change directors after making a disclosure without letting it become public knowledge.
2. Nevada is a tax-free haven. It doesn’t tax the income of the corporations or the citizens. There are no taxes on corporate shares and no franchise taxes.
3. Sales tax is applied only to merchandise sold within the state.
4. Nevada government policies prevent information from being shared with the IRS or other agencies.
5. Annual corporate fees are the lowest in Nevada. They cost only about $125.
6. It is not mandatory to hold meetings and carry out corporate activities within Nevada.
7. It is not mandatory for directors of corporations in Nevada to be shareholders.
8. Corporations in Nevada can sell, purchase, transfer or hold their own shares.
9. A single person can incorporate and hold all offices.
10. Corporations in Nevada can own other corporations, real estate, and stock. If you want to buy land and keep it a secret, you can use a Nevada corporation to buy the land and nobody will know that you own the corporation that owns the land.
11. It is not required that the owners of a Nevada corporation be residents of Nevada or US citizens. They only need to have a resident agent. A resident agent is the Secretary of State’s acknowledged contact for your corporation.
It is no wonder that corporations are rushing to incorporate in Nevada, since some of the rich and the famous like to remain anonymous and do not like to disclose all their assets for public scrutiny. Not only is it economical to start a corporation in Nevada, it is also fairly easy running the corporation without legal hassles. S corporations and their limitations are not needed in Nevada as people mostly form S corporations to enjoy its tax benefits. This does not matter in Nevada since it is a tax free state. Elsewhere corporations are double taxed.
Several companies offer software such as Do-It-Yourself (DIY) kits that guide a person to form a corporation, as well as prepare documents needed by corporations for day-to-day activities.