Nevada Corporations Can Offer Protection
After you make the decision to incorporate, you should figure out where to do it. The most common and attractive option is to set up a Nevada corporation. You need to do some online research and learn about the laws, but if you do it right you will see what are the advantages of forming a Nevada corporation.
Forming a Nevada corporation can be done easily, but there are some fees involved. Incorporating in your own state can be cheaper because many home states don't charge this fee that needs to be paid when creating a Nevada corporation. Forming a corporation in Nevada is not always cheaper than forming one in your own states, but the price and be different depending on your situation. You need to be sure that you are aware of the taxes that need to be paid. These corporations can offer other advantages, even if they can sometimes be more expensive to create.
You can't lower you taxes dramatically by incorporating in Nevada, but these corporations are not subject to corporate income tax. The United States government still gets taxes from their citizens and you need to file corporate tax returns in the states that you are a non-resident. This will cost you some money, but you will save some with the lack of the corporate income tax. The difference can be calculated and you should figure out in advance how much money you can save with taxes.
The best reason that you have for forming a Nevada corporation is that the sate offers great protection from liability and a high level of privacy. The concept of piercing the corporate veil is a legal process that allows a court to remove the protection to some of the members of a corporation and it can hold them responsible for the acts of the corporation. If this happens to your corporation, you will become liable for its debts and obligations.
The process of piercing the corporate veil is done differently from state to state. Many states allow it to be done easily and quickly. This is the case of New York, California, Pennsylvania and many others. In other states, corporations that have a certain level of capitalization and net assets are usually respected and the procedure is not applied to those corporations. If you fail to comply with normal formalities such as holing meetings it can be viewed as a reason for piercing the veil.
If you form a Nevada corporation, you will take advantage of not having to deal with this procedure. In the state of Nevada, piercing the veil was only used twice in the last 26 years. This happens very rarely and if you own a Nevada corporation and fail to comply with your annual formalities you will probably not have to worry about getting the veil pierced. In other states, that wouldn't be possible. A Nevada corporation offers much more privacy and confidentiality then any other corporation from another state. Stockholders, officers and directors of a Nevada corporation are not held liable for the corporation's debts and obligations.
Of course, forming a Nevada corporation can offer you other advantages, but privacy and confidentiality are the main two reasons for incorporating in this state.
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