Perhaps the most recognized business form, corporations can provide individuals with myriad benefits. Some of you may think that corporations are only for multi-billion dollar companies, but the truth is that the vast majority of corporations are small “mom and pop” businesses. The benefits of incorporating apply to both small and large businesses. Whether you want liability protection, tax reduction or estate planning benefits, a corporation is the cornerstone of any plan.
Benefits of Incorporating
Major Corporate Advantages: Liability Protection: If you operate as a sole proprietor, business debts are personal debts – you are personally liable for the debts of the business and vice versa. The corporation shields its owners from personal liability.
Tax Benefits: Slash your taxes with corporate deductions. With a corporation, you have the opportunity to deduct 100% of your medical, dental, and vision expenses (including co-pays). You can use tax free dollars to buy insurance and learn to maximize your business returns by using pre-tax dollars.
Stock Ownership: Corporations are owned via stock. This makes transferring assets easy. Instead of transferring individual assets, corporations allow you to simply transfer stock. This makes estate transfer a breeze.
Jurisdiction: You can form your corporation under the laws of any state you desire. Several states offer tremendous advantages. We can help you select the best state for you. Often, that state will be Nevada.
Corporations are created under state law. Therefore, there are a minimum of 52 jurisdictions in which to incorporate (including Washington, D.C., and Puerto Rico). While many of the states have adopted similar corporate laws, there are a few states that have unique laws which benefit particular businesses. Almost everyone has heard of Delaware as the state of choice in which large, public, businesses incorporate. But what about smaller corporations? Is there a state that appeals to the needs of smaller, closely held, corporations? Absolutely.
Nevada has become an “on-shore” haven for small businesses. Its laws are uniquely “pro-business.”
Some of the advantages of incorporating in Nevada include
- Privacy: Nevada has minimal filing requirements. Keep your name out of the public records.
- Nominee Officers: You can use nominees in your filing. This keeps you from filing your personal information with the Secretary of State. Keep your personal information private.
- No State Corporation Income Taxes: Unlike most states, Nevada does not tax its corporations on the income they earn.
- No Franchise Taxes: Nevada does not charge a franchise tax on its corporations. No Taxes on Shares Issued: You do not have to worry about being taxed when you issue stock in Nevada.
- One-Person Corporations: One person can be the sole shareholder, director and all of the officers for the corporation. This makes Nevada ideal for single-owner corporations.
- No Minimum Capitalization Amount: You can fund a Nevada corporation with services.
- Extensive Director and Officer Liability Protection: Nevada is the only state to statutorily limit liability for both officers and directors.
- Charging order protections for shareholders of Nevada Corporations:
Nevada does not permit a shareholder’s personal creditor the ability to foreclose on the shareholder’s shares. The only remedy available to the creditor of a shareholder is a charging order. Nevada is the only state that offers this protection.
- Inexpensive Establishment and Maintenance Costs: Despite all the benefits, Nevada is still one of the least expensive jurisdictions in which to establish and run a corporation.
Nevada has become the small business corporate friend. Depending on the type of business you plan on running, you may be able to take full advantage of Nevada’s unique pro-business laws.