Where to Incorporate:
Nevada, Delaware, Wyoming, or Your State?
|
|
| |
Request Information
or a Price Quote Now!
|
|
| |
Order a New
Corporation or LLC Now!
|
|
|
|
|
Nevada, Delaware, and Wyoming are all typically referred to as
“corporate havens” and are all popular jurisdictions to incorporate your business. Wherever you choose to incorporate, be aware of the significant
differences between each state.
|
|
|
|
|
InCorp used to recommend Nevada as the #1 state in which to incorporate. InCorp's National
Headquarters is located in Nevada, so it is our home, but that is not why we
used to recommend it. Nevada law protects directors and officers from personal liability for acts committed on behalf of the
corporation or by the corporation (except in cases of fraud). Because jurisdiction for the corporation is in the state in which it is incorporated,
this law has previously made Nevada our preferred state in which to incorporate. Nevada has
some of the most favorable tested corporate
laws in the United States. It has arguably the highest degree of privacy, and Nevada is the only state in the U.S. that does not
share information with the Internal Revenue Service. (Note that this does not
help you avoid any Federal Taxes you may owe, but may be a privacy issue for
you.)
Lastly, Nevada has no state corporate taxes! Nevada Corporations have proven
effective over time by thousands of clients from literally every state in
the nation and around the world. Take a look at the following list and
see why many people prefer to incorporate in Nevada:
|
|
|
No Corporate Income Tax |
|
No Taxes on Corporate Shares |
|
No Franchise Tax or Gift Tax |
|
No Stock Transfer Tax |
|
No State Personal Income Tax |
|
Minimal Reporting and Disclosure Requirements |
|
Stockholders are not a matter of Public Record |
|
Law requires only one director (you can have a corporation with only one
person involved (the same is true for Delaware and Wyoming!) |
|
Directors can change bylaws |
|
No minimum capital is required |
|
Only officers, directors, and resident agents are disclosed |
|
|
|
In Nevada, you do not have to reveal the stockholders of a corporation. The only thing revealed is the identity of the
officers. If you have nominee officers for your corporation, your name is not revealed. You, therefore, have privacy.
No one knows who owns your corporation. If done properly, this can be a very valuable strategy for protecting assets.
|
|
|
Nevada Corporations have proven effective over time by thousands of clients
from literally every state in the nation and around the world.
|
|
|
If price is a consideration, you may wish to consider Wyoming as it costs 75% less to incorporate
there than in than Nevada. Nevada instituted a business license requirement which recently increased to $200 per year in addition
to other state fees.
|
|
|
Cons: Special interests such as public employee and education unions have
pushed the Nevada legislature every session very hard to create massive crushing unbearable taxes on all business entities in Nevada. With the business license requirements for non-resident businesses
- and its subsequent increase, they
have essentially priced Nevada out of the market. It is much cheaper to
incorporate in Wyoming. Unless you have a compelling reason for
incorporating in Nevada such as having property or employees within Nevada,
the cost may very well outweigh the benefit compared to Wyoming or even
Delaware. Wyoming is very intelligent in this regard and not considering any new taxes
or fee increases on business entities.
|
|
|
|
|
Wyoming is up and coming in the way of attracting new businesses to their state, but their statutes
are not as strong and there is not as much established case law as there is
in Delaware and Nevada. Wyoming's advantages are that its laws are
very similar to Nevada and they have SUBSTANTIALLY LOWER initial and annual fees. Additionally, the State of Wyoming
continues to be very
strong financially enjoying a huge budget surplus so there is no foreseeable fee increase for maintaining your Wyoming business entity. Wyoming is not considering any new taxes
or fee increases on business entities.
|
|
|
Cons: Unlike Delaware and Nevada, much of Wyoming's case law is untested.
|
|
|
|
|
For many decades,
Delaware was the single most popular state to incorporate in and it is still favored by many
attorneys and especially by publicly traded corporations.
|
|
|
There are a number of advantages to Delaware, however probably the biggest and
most substantive advantage of Delaware to consider is The Chancery Court. This is a special court that only hears Delaware
business entity cases and has a reputation as one of the finest courts in the
country. Delaware has an extensive body of corporate case law spanning over
100 years regarding such matters as mergers,
acquisitions and management/shareholder issues. This is why the Fortune 500 are drawn to the state of Delaware.
Delaware laws have been tested so many times over the years that they provide unmatched predictability. Huge public companies
can have
literally hundreds of such disputes pending in the courts on any given day. If
you have a Delaware business entity,
Delaware’s case law offers many insights into what you can and cannot do, and what the likely consequences may be.
This can save you thousands in attorney fees should an issue go to
litigation and can actually help you avoid a lawsuit in the first place! If
you do end up in Chancery Court, the decisions are issued without jury
trials and are written.
|
|
|
More than 60% of Fortune 500 companies are incorporated in Delaware. If you
are concerned about your company's image, consider that there may be some
perceived prestige to your business entity being incorporated in Delaware.
|
|
|
Unlike some other states, Delaware realizes that a substantial portion of the state's revenue comes
from corporate registration fees and it is in the state's best
interests to keep the state "business friendly". What this means to you is that you can likely count on Delaware's filing fees remaining relatively
stable since they know what your business means to their state.
|
|
|
Cons: Fees in Delaware tend to be higher than most other states, however
you must weigh the benefits associated with your business entity being
"domesticated" there. You get the Chancery Court, and you get the "Delaware
Prestige!" These things cost money and as the old saying goes, "you get
what you pay for." Also, because of indemnity statutes in Wyoming and
Nevada, there are cases where an officer was personally exposed in Delaware
but had they been an officer of a Nevada or Wyoming entity they would have
been protected. Delaware has personal income tax, a state franchise tax, reporting requirements
and regulations compelling disclosure of substantial amounts of information
which can result in far less privacy for you. Delaware also does have a corporate income tax,
however, this only applies to businesses actually conducting business in
Delaware so it does not apply to most. |
|
|
|
|
State Corporate Income Tax
|
(only
for companies actually conducting business in Delaware.) |
|
|
|
State Personal Income Tax
|
|
|
|
|
Franchise Tax
|
|
|
|
|
Expensive "Business License" Required |
|
|
|
|
Requirement to Report Number of Shares Issued and Outstanding
|
|
|
|
|
Requirement to Report Places of Business Outside State of Incorporation
|
|
|
|
|
Taxes Corporate Shares
|
|
|
|
|
Low Annual Fees
|
|
|
|
|
Nominee Shareholders Allowed
|
|
|
|
|
Unlimited Stock is allowed of any par value
|
|
|
(Annual fees increase substantially on capitalization
higher than $75,000 total!) |
|
Single Person Corporations Allowed
|
|
|
|
|
No Annual Report Required until the anniversary of the incorporation date
|
|
|
|
|
Officers, Directors, employees and agents are statutorily indemnified
|
|
|
|
|
No Minimum Capital Requirements
|
|
|
|
|
Share Certificates are not required
|
|
|
|
|
Meetings may be held anywhere
|
|
|
|
|
Requirement to Report Dates and Times of Annual Stockholders and Directors Meetings
|
|
|
|
|
|
|
Some incorporating companies and registered agent services will tell you only one state is the best to incorporate in.
This is generally because this is the only state they operate in. InCorp services provides incorporation and registered
agent services in all 50 states and DC. We only want you to incorporate in the correct jurisdiction!
If you're not sure which state to incorporate in, consult with your attorney
or accountant!
|
|
|
Questions about Where to Incorporate?
|
|
| |
Request Information
or a Price Quote Now!
|
|
| |
Order a New
Corporation or LLC Now!
|
|
|
|
|
Call us today at 800.2.InCorp (800-246-2677) for a free consultation.
|
|