Why was Nevada able to become America’s most popular corporate refuge?
The answer is in principle simple, that over the past few decades. Nevada lawmakers did a conscious, very active and effective work to make the state of Nevada the most convenient state to do business in the US, get the maximum number of business people to work in the state and make the corporate legislation of the state of Nevada the most convenient and friendly for corporations.
And this was accompanied by a huge multi-year advertising campaign. From airlines to magazines, from radio and television to email spam. It was the largest advertising company ever launched by a separate state in advertising and promotion services for business.
And they succeeded. For many years now, the state of Nevada has been ranked first in the United States (and indeed in the world) in terms of business convenience, minimization of various business requirements and licenses, the ability to resolve any issues online, zero taxes and the most progressive legislation.
Traditionally, Delaware was the most popular state to incorporate. Because business people were attracted to low-income companies, and managers and company owners were offered a greater degree of protection of responsibility for their business decisions and actions. Delaware has traditionally received an abundant flow of registration fees, and a huge corporation service industry has developed (and to a lesser extent) LLCs that are registered there. In the end, other states decided to try to repeat the success of Delaware and began to actively implement in their states a business-friendly approach of Delaware. Nevada has become the most vivid example of how students excel their teacher. The state of Nevada began an aggressive program of attracting businesses in the early 1990s and more than succeeded.
Since the end of the 90s, the state of Delaware has constantly lost its former attractiveness and at the time of the introduction of quite high annual taxes (8.7%), many businessmen turned towards Nevada where there are no taxes.
But Nevada is not the perfect haven for business. The state has recently increased statutory and organizational fees, as well as the cost of an annual business license, which makes Nevada one of the most expensive states in the United States for business organization. In addition, the laws of Nevada require the organizers to call the initial owner or manager in the Article of Incorporation (the main document of the business being created). This information is publicly available on the site of the Secretary of the State of Nevada. But despite this, Nevada is guided by the rule of privacy, which offers owners of companies (but not their managers and managers) a very high degree of anonymity.
Consider the benefits of registering a corporation or LLC in Nevada.
The opening of a corporation (LLC) in Nevada brings with it a host of advantages, some of which we list:
– In Nevada, there is no corporate tax or income tax LLC.
– In Nevada there is no tax on shares or property LLC. Some states (not a lot, mind you!) Tax individual shares in a company.
– Nevada does not have a franchise tax.
– Nevada does not have personal income tax.
– Nevada does not have an information sharing agreement with the IRS (US Tax Administration). There is no corporate tax department in Nevada, so there is no information that can be shared with the IRS.
– Shareholders of corporations in Nevada and LLC owners in Nevada can remain completely anonymous. The state of Nevada does not have any official public records of company owners.
– The directors and management of companies, although they are publicly available, are not associated with their personal documents. State does not need to provide any information about the directors of the company. So if the director of the company is Sergey Ivanov or John Smith, then it will be extremely difficult to identify a real person.
– Officials and executives of the Nevada Corporation are protected from personal responsibility for the legitimate actions of the corporation (not in all cases!).
– Nevada corporations can acquire, hold, sell or transfer their own shares.
– Nevada corporations and limited liability companies may issue shares to receive capital, services, movable property, real estate or rent, including options (for employees). The directors can determine the price of any of these transactions, and their decision is final.
– The Nevada Secretary provides excellent customer service and excellent online support. Most issues are solved fantastically quickly. In this matter, Nevada is ahead of any US state.
Of course the most attractive are the rules of business taxation by the state of Nevada.
Nevada has huge tax revenues from its most notable industries:
Exhibitions and Conferences
As a result, Nevada residents and businesses enjoy the lowest tax rates in the United States. Nevada does not impose corporate income tax or LLC, unlike many other states, such as New York and California
Is everything so wonderful and there are no problems and shortcomings? Of course there is. Let’s look at them in more detail. It is impossible to call these shortcomings very significant, but it is better to know about them in advance.
Disadvantages of corporations and LLC in Nevada:
– In Nevada, you must select and name your original corporation directors or members (partners). These names will be in the company’s documents and will be available on the website of the Secretary of the State of Nevada.
– Nevada requires an annual submission of a list of company directors. This is called the annual re-registration of the company.
– Nevada has recently increased registration fees, making Nevada one of the most expensive states in the United States in terms of registering a business.
– Nevada companies require the purchase of a mandatory annual business license. The cost of which has increased recently to $ 500 per year for corporations, and $ 200 for LLC.
– Nevada corporations have a negative reputation in some circles because Nevada corporations are often used to achieve illegal purposes, such as hiding assets. Many law firms and registrars openly advertise Nevada as the best way to hide assets in the United States.
– If the owners of the LLC are also its managers (Managing Member), then you should open their names in the company documents. But no documents of the owners of LLC in the registration records will not be.
Our company has been working since 2002 with companies in Nevada. For all these years, no one has ever complained that the state of Nevada impedes or creates problems in business. Our company is also registered in Nevada. So we have no problems with this.