By NiNi Vo
An essential part of becoming a business owner is incorporating your business: the act of separating your business from yourself. This concept is often referred to as the corporate veil. In the event that your business was to be involved in a lawsuit - or other adverse actions against the organization itself - this separation prevents you from losing personal assets as an owner. Additionally, compartmentalizing your startup may create tax deductions, sending money straight back into your enterprise.
The primary reasons to incorporate your business include:
- Liability protection
- Asset protection
- Brand protection
- Separation of business and personal assets
- Tax savings
- Reduced likelihood of tax auditing
- Builds credibility
The benefits of incorporation are clear; however, it's not the right move for everyone. You're probably wondering if incorporation is right for your startup. The first questions you need to ask yourself are:
- Are you starting your own business?
- Do you have real estate investments?
- Does your estate plan need structuring?
Did you answer “yes” to any of these questions? If so, incorporation might be a good move for you and your team (contact experts at the Nevada Corporate Headquarters to get started.)
Why Nevada?
Nevada, like every other state, writes its own unique statutes. The statutes cover areas regarding corporate structure, operational requirements, legal protection, and personal privacy protection. However, Nevada is known as the "pro-business state", since it differentiates itself by having the most business-friendly incorporation statutes in the country.
Some other facts that make Nevada unique for businesses:
- Nevada enforces strong asset protection laws that protect business owners and their personal assets.
- Forming a Nevada entity gives multiple tax advantages such as no franchise tax, no tax on corporate shares, and no personal income tax.
- There is no minimum capital requirement to incorporate in Nevada.
- Only minimal disclosure of personal information is necessary during the time of start-up and annual filings.
- Directors and officers do not have to reside in Nevada, hold meetings, or be a resident of Nevada. You can live anywhere and still incorporate in Nevada.
In Nevada, the corporate veil is not upheld for deliberate, misleading illegal acts committed by the owner of the company. This is a different policy from other states, in which the veil can be more easily broken for reasons such as:
- Failure to correctly record time of corporate meetings (Connecticut)
- Commingling of personal and business funds (Utah)
- Improper documentation of loans between the company and shareholders (Texas)
- Court judgement that a business owner benefited from business losses (Missouri)
Asset protection is another vital facet of doing business in Nevada. If you own a business with assets upwards of $50,000, it’s important to protect yourself by incorporating in Nevada. Reasons include:
- One in four small businesses have been sued or threatened with a lawsuit in the past 5 years
- A lawsuit is filed every 2.08 seconds; equivalent to the blink of an eye
- One single lawsuit can damage your business and reputation, effecting future endeavors
Nevada's lack of minimum capital requirements is another reason you should strongly consider incorporating there. Starting an LLC or corporation in this state can be done with a minimal amount of capital. Other states require at least $1,000 in capital; this is not the case for Nevada. Another attractive perk is Nevada's one person requirement. One person can be appointed as the President, Secretary, Treasurer, and sole Director of the company. Many other states require a minimum of three people for these positions. If you would like to dedicate one person for these positions, a Nevada corporation is the way to go. In addition to having the discretion of disclosing names of business owners and board members from the public record, Nevada LLCs do not have to file an asset list. The first will protect business owners and members from being associated with lawsuits; the second protects your assets.
Moreover, the whole process of incorporating in Nevada can be an entirely remote process. Materials can be submitted and filed through mail, fax, or phone. Corporate meetings can be conducted anywhere in the world. You never even have to visit the state.
Why NCH?
NCH stands for Nevada Corporate Headquarters, Inc.; it is different from other incorporating companies because they provide various services that are designed to help your business grow.
A Proven History Of Success
- Since 1989, the NCH has formed hundreds of thousands of entities, making them the largest incorporation service in the state of Nevada.
- By selecting NCH as your incorporating service, you are receiving benefits from a company unlike any other in the industry.
- The NCH offers unique services that are not provided by most registered agents. A variety of asset protection strategies include business entity formation, tax consultation, and return preparation, estate planning, building business credit and much more.
- They are dedicated to providing the best quality of customer service to obtain the highest amount of client satisfaction.
- The NCH holds a nationwide reputation for assisting entrepreneurs, large corporations, and licensed professionals. They have well-known lawyers, CPAs, and financial planners from around the country that utilize the NCH’s asset protection strategies for their clients.
For more information about incorporating your business and where to start, you can compare with other states such as Delaware, Colorado, District of Columbia, California, New York, Florida, Texas, and Wyoming.
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