What is a 'Nevada Corporation'

A Nevada corporation is a business incorporated in the state of Nevada, which is known to be business-friendly through its tax and corporate law statutes. Companies that incorporate in Nevada have several distinct advantages, including no state income tax, no franchise taxes, no personal income taxes and no succession taxes. 

Another unique advantage of Nevada corporations is that company officers and directors are well-protected against lawsuits arising from lawful business pursuits.

BREAKING DOWN 'Nevada Corporation'

Nevada corporations exist because of differing state laws about taxes and liability, and because corporations are typically governed by state law. Nevada’s laws make it a well-known corporate haven. Delaware has similar laws on the books, and a Delaware corporation functions similarly to a Nevada corporation.

Nevada has become a widely used tax haven in recent years, drawing a large number of West Coast-based companies in the U.S. A company may have a headquarters in another state and still be incorporated in Nevada. Some individuals also choose to form a Nevada corporation to protect their individual assets. Not only does Nevada not have an individual or corporate state tax, it also is one of two states, along with Texas, that does not have an information sharing agreement with the IRS.

In addition to public companies that choose to incorporate there, many private companies are attracted to the state because of its strong protection laws against hostile takeovers of a business. 

A term known as "piercing the corporate veil" refers to the ability of a plaintiff to go after the personal assets of a company owner or director. While piercing the veil is rare in any state, Nevada is well-known for its strict adherence to the protection of personal assets and information.

Advantages and Disadvantages of a Nevada Corporation

Nevada encourages businesses to incorporate in the state by offering a number of incentives. Along with the tax and legal benefits noted above, Nevada is lenient about the requirements it places on those corporations and their board members. For example, the stockholders, directors and officers of a Nevada corporation are not required to be U.S. citizens. Nevada also has strong privacy laws that favor businesses. The names of the officers and stockholders of a Nevada company are not public record. The board of directors of a Nevada corporation does not have to hold meetings in Nevada. The state has minimal requirements in terms of annual reporting and disclosure documentation.

Nevada corporations that do business outside the state are still subject to taxes in the other states where they operate. Companies that do most of their business in California, for example, will have to register with that state and file tax returns there as well. If they fail to do so, they may be subject to hefty fines.

  1. Articles of Incorporation

    Articles of incorporation is a set of formal documents filed ...
  2. IRS Publication 542

    IRS Publication 542 is a document published by the IRS that provides ...
  3. Domestic Corporation

    A domestic corporation is a company that conducts its affairs ...
  4. Income Tax

    An income tax is a tax that governments impose on income generated ...
  5. IRS Publication 555

    A document published by the Internal Revenue Service (IRS) that ...
  6. C Corporation

    A C corporation is a corporation in which the owners or shareholders, ...
Related Articles
  1. Insights

    Apple Plans $1 Billion Expansion in Nevada

    By doubling the size of its data center, Apple can better cater to surging demand for iCloud storage and enjoy tax breaks.
  2. Personal Finance

    Players Are the Winners in Raiders' Move to Vegas

    Whether you watch professional sports or are a professional athlete, financial planning is the same.
  3. Investing

    Las Vegas Strip Casinos' Win Dips 3.5% in November

    The action wasn't all that hot in the key Las Vegas casinos in November, at least according to the latest financial figures. The Nevada Gaming Control Board reports that the gambling palaces ...
  4. Investing

    Apple Files for New Cloud Project in Nevada

    Apple is expanding its cloud footprint in Nevada to reduce reliance on Amazon and Google to power its fast-expanding services.
  5. Insights

    How Moving Can Affect Your Finances

    Here are the factors you need to look at to determine whether moving to a new area will leave you with more money on a regular basis.
  6. Investing

    The Next Exotic Place to Hide Your Cash... USA! USA!

    Worldwide, people are pulling their money out of tax havens like Bermuda and Switzerland, and shifting them into state trusts in the United States for privacy and personal safety reasons.
  7. Trading

    3 Casino Plays Primed for Sports Betting Profits

    Middle America casino and race track stocks rallied strongly on Monday after SCOTUS opened the door to legalized sports betting.
  8. Taxes

    Do U.S. High Corporate Tax Rates Hurt Americans?

    The United States has the highest corporate tax rate of the 34 developed, free-market nations that make up the Organization for Economic Cooperation and Development (OECD).
  9. Managing Wealth

    4 Benefits of Owing an Offshore Company

    Four reasons why you might consider incorporating offshore.
  10. Investing

    5 Sports Betting Stocks May Pay Off Big

    The odds are now in favor of several gaming stocks after the Supreme Court ruling.
  1. What is the difference between a state income tax and a federal income tax?

    Learn the difference between state income tax and federal income tax based on tax rates, deductions, tax credits and taxable ... Read Answer >>
  2. Is a private company required to show financial information?

    Understand whether a private company is required to disclose financial information to the public. Learn what is required ... Read Answer >>
Trading Center