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How to Structure a Business

  1. S Corporation
  2. Sole Proprietorship
  3. Nevada Corporation
  4. Corporation
  5. Pass-Through Entity
  6. LLC
  7. Limited Partnership
  8. Private Company
  9. Not For Profit

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Nevada Corporation: Definition, Overview & Benefits

Updated: November 23, 2022

Is there any benefit to incorporating a business in a particular state?

Nevada is one of the most common states to come up when people talk about state incorporations. But why?

Read on as we take a closer look at the benefits of becoming a Nevada corporation.

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    KEY TAKEAWAYS

    • Nevada corporations are businesses that are incorporated in the tax-friendly state of Nevada.
    • There are many benefits of incorporating in Nevada. Including no state income tax, enhanced protection for personal assets, and no franchise taxes.
    • Delaware has similar rules, allowing them to host business-friendly environments.
    • Any Nevada corporation that does business outside of the state is still subject to the tax rules of the other operating states. 

    What Is a Nevada Corporation?

    A Nevada corporation is a business that has been incorporated in the state of Nevada. Nevada is a state that is known to be business-friendly. This is because of its corporate law statutes and its tax rules that favor businesses. 

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    Overview of a Nevada Corporation

    Nevada corporations exist because of differing state laws regarding liability and taxes. Corporations are commonly governed by state law. This can create an opportunity for states to put themselves in the position of being friendlier to businesses than some other states.

    Nevada’s business-friendly laws essentially make it a corporate haven. Delaware has a similar set of laws, and a Delaware corporation functions in a similar manner to a Nevada corporation. 

    Why Do Companies Become Nevada Corporations? 

    If a company was started in the state of Nevada, then naturally they will incorporate there as well. However, there are many non-Nevada-based businesses that decide to move their operations to the state to incorporate. 

    It is common for private companies to do this. This is mainly because of the attractive protection laws that relate to limited liability companies. As well as the relaxed rules around corporate governance and share issuance. 

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    Advantages and Disadvantages of a Nevada Corporation

    Nevada encourages businesses to incorporate in the state by offering a wide range of incentives. These include:

    • No state income tax
    • No franchise taxes
    • No inheritance taxes
    • No personal income taxes
    • Company directors and officers are well protected from lawsuits that come from lawful business pursuits
    • There is no information sharing agreement with the IRS
    • Nevada has a strict adherence to privacy laws for the protection of personal information and assets
    • The board of directors of a Nevada corporation doesn’t have to hold their meetings in the state of Nevada
    • There are minimal requirements in terms of disclosure and annual reporting documentation

    However, corporations in the state of Nevada don’t get a completely free ride. There is a business license fee that is paid to the state that comes to $200 for other types of businesses and $500 for corporations. 

    There is also a Nevada Commerce Tax that is imposed on any business with gross revenues that exceed $4 million. 

    Any Nevada corporation that also does business in other states is still subject to taxes in these states. If they fail to do so, they can be subject to heavy penalties and fines. 

    Summary

    Nevada is recognized as a business-friendly state. It offers businesses that incorporate a wide range of benefits. However, businesses will still have to pay state taxes for any other state that they operate in. 

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    FAQs on Nevada Corporations

    What Does a Nevada Corporation Do?

    A Nevada Corporation can be any type of business. It is more defined as a business that has been incorporated in the state of Nevada.

    Does a Nevada Corporation Have to Have Its Headquarters in Nevada?

    No, a business can have its headquarters based in another state and still be classed as a Nevada Corporation.

    How Do I Set up a Corporation in Nevada?

    Setting up a corporation in Nevada is the same process as in any other state. You have to file the Articles of Incorporation. As well as file an Initial List and State Business License Application.

    Do You Pay Corporate Tax in Nevada?

    Nevada doesn’t impose a corporate income tax on businesses. Only four states in the nation, including Nevada, do not demand the filing of either individual or corporation income taxes. This is a significant benefit that makes Nevada a particularly appealing jurisdiction for individuals wishing to launch a new business.

    How Long Does It Take To Incorporate in Nevada?

    Within 7 to 10 days after placing a purchase, you will typically receive your filed and approved Nevada incorporation documents.

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