Nevada/Delaware Corps?

nadonailer

Anyone have a corporation in either of these two states? I've heard they have a lot of advantages???

__________________
"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

Brushslingers

Delaware is anon... thats why most large companies incorp there. The standard list of officers is not required to be on file, or at least... public. Not sure about NV. You can look up just about everyone on state public access websites, get the addresses, officers addresses, etc.

__________________
Benn

SlingerLissa

Finally, a post I can reply to! This is my line of work.

Here's the skinny on Delaware Corporations.

Service from the State of Delaware and its unique Agent Community is fast and unprecedented.

Most Delaware corporations can be formed within minutes and evidence of filing can be available in a matter of hours.

No minimum amount of capital is required to form your company and begin operating your business.

Delaware has no sales tax, no personal property tax and no intangible property tax.

Delaware state income tax is not assessed on corporations that are not doing business in Delaware.

Annual franchise tax is low and is based on authorized shares, not company revenues.

One person can be the Officer, Director, and Shareholder.

Officers and Directors can be indemnified, limiting their personal liability.

Directors need not be shareholders.

Corporate books and records are not required to be stored in Delaware.

Non-resident shareholders pay no Delaware state tax on shares.

Delaware corporation law has centuries of legal precedent matched no where in the world.

Delaware courts are respected worldwide for their expertise in corporate issues.

Shareholders are protected by takeover statute, which limits abusive hostile takeover tactics.

Voting provisions requiring greater-than-majority approval may be enacted.

Corporation may pay dividends from profits and surplus.

Shareholders and directors may act by unanimous written consent in place of official meetings.

Directors may be given the power to make and alter by-laws.

Corporation may hold stocks or securities of other corporations, real and personal property, within or outside the state, with no limitation as to amount.

Different kinds of business may be carried on in combination.

Corporation may fix quorum of board of directors (not less than one-third of the whole board; two if only two shareholders; one if only one shareholder.)

Voting trusts and voting agreements may be created.

Generally, stockholder liability is limited to stock held in the corporation.

Delaware law includes Close Corporation provisions.

Different classes of stock may be issued in a given series.

A franchise tax report is due annually to the Delaware Secretary of State, the fee is based on the authorized shares. The minimum is 3,000shares at no par value. Normally when we incorporate for someone, we do so at 1,500 shares at no par value. At 3,000 shares at no par value or less the total fee to file the franchise tax report would be $60.00. Officers and directors are supposed to be included on the report, although, the state has been known to file reports without this information. It must be noted that the state has the right to reject any franchise tax report that does not include this information.

The Certificate of Incorporation (which is Delaware's way of saying Articles of Incorporation) is $89.00 to file, which includes the recording fee.

-------------------------------
Now, Nevada - Within 60 days of filing the Articles of Incorporation in Nevada, your Initial List must be filed with the Secretary of State. The initial list must include the names and addresses of the officers and directors of the corporation, thus making this information public record. Once filed, ANYONE can log on to the Nevada Secretary of State's website and view this information. The initial list is $125.00 to file weeks.

Filing the Articles can take up to several weeks, unless you file using their expedited service for an additional $125.00. The filing fee is based on the authorized capital. $75,000.00 or less is $75.00 to file.

I know this is a lot of information, and I apologize. I just like to give as much as I can. Please realize that it is important for you to speak to either an Attorney or CPA in your area. They can offer the best (and of course legal) advice when it comes to which state you should incorporate in. In addition, if you are not located in either Nevada or Delaware, and are conducting business in another state you may be required to qualify the (DE or NV) Corporation to do business in that state. Definitely seek out legal advice before making any final decisions. Each company has it's different needs, and what may be best for your business may not be best for another.

I hope I was helpful, if only a little.

Lissa

Brushslingers

Heh, thats my girl.

__________________
Benn

Mike Finley

The amount of time spent on driving one nail straighter on a job site will be more productive in the long run then worrying about a Nev or Del corporation. The time spent contemplating the amount of grains of salt on a McDonald's french fry would also be more productive. I hate with a passion the scum bags who pray on people with this ruse.

The one simple issue of having to be a foreign corporation in your own state is more than enough of a reason to out weigh any potential benefits of a NV or Del corporation for 99.9% of anybody in construction on this site.

SlingerLissa

I agree Mr. Finley, a business owner should be attending to business matters, and leaving the legal issues such as where to incorporate, what type of entity, how many shares, etc. up to their Attorneys or CPA's who are better qualified to make those decisions.

BUT, in saying that, I do not agree with Mr. Finley's statement that it is a ruse. There are advantages for many corporations to be incorporated in a state that is not where they are actually conducting business, and then having to qualify in what should be their home state. It is not an advantage to you, obviously, and many others. Usually the advantages have to do with tax, but again, this can only be determined by a CPA and/or Attorney.


Lissa

Mike Finley

Sorry Lissa, didn't want to sound like I was attacking your advice, to be honest I didn't actually read what you wrote and wasn't responding to any specific points of your reply.

I've been familiar with the NV, Del incorporation debate for at least 10 years and I'll stand by the fact that at best 99.99% of anybody on this site is not going to be able to take advantage of any of the advantages of a NV or Del corporation, and just the opposite they would be sorry if they did it.

If we should get into specifics almost every advantage is a disadvantage and unless you are a company with a nation wide presence with offices nation wide, you are only going to create more cost and more work by not incorporating in your home state. Since 99.99% of us here don't fit that bill anybody who would convince one of us to incorporate outside of their home state is pulling a fast one. A simple search of the web shows tons of websites who try to make a fast buck by preying on peoples ignorance to the truth of the fact that a NV or Del corporation is a waste of time unless you can benefit from the 'advantages', and if they don't offer a simple screening to tell you that there is no advantage in your situation then they are in my book con men and only out for a quick buck by taking advantage of the wive's tales of the NV and Del corp.

Nothing personal but this is simiar to a car salesman being approached by an elderly couple who ask them "I heard a Power Stroke diesel, dually would be able to tow my boat." the saleman can answer yes it can truthfully, but is it the best interest for this couple to take out a 2nd mortgage in order to plunk down $45,000 for this vehicle, incur extra insurance premiums, extra fuel costs all because he wants to tow his 120 lb canoe?

Sure the salesman didn't lie to them, it will tow their boat, but so would every single other car on the market.

That's why the NV and Del corporation is a ruse, yes it has advantages but only if the incorporator is qualified and found to be able to take advantage of them, if not it actually becomes a liability over simply incorporating in their home state.

SlingerLissa

Mr. Finley -

You are correct in the fact that there are a lot of websites out there who toute the advantages of Nevada and Delaware Corporations. They do that, because there ARE advantages. In the old days, before websites people called the office to find out what the advantages are. Putting this information on a website is convenient for an individual who is curious about the advantages, etc. And, it's provided for free. It's provided for free if a customer calls too.

I've been in this business for over twelve years, and there are some shisters in the business of forming corporations, just as there are some shisters in the Construction and Painting industry. It happens all over. What I can tell you is this, a company who provides the service of assisting with incorporating (in any state) cannot do a "screening" to determine what state a business should incorporate in. Just like they cannot tell a customer what entity type they should form. Why? Because it's considered legal advice. The only people who should and can give this advice are attorneys and CPA's, and this is exactly what I tell any entrepreneur who contacts me with questions.

The information I provided was not advice, it was fact, and could be obtained by contacting the Delaware Secretary of State, or Nevada Secretary of State for that matter.

The humorous part however is, just like HO's try to do it themselves for less, so do many entrepreneur's/small business owners. I'm not referring the process of incorporating, but instead the process of determining what entity type, what state, etc. Again, these questions are best presented to an attorney, CPA.

It has to be said, and if you read any of my post please at least read this. Companies who assist people with incorporating are qualified to do just that. Assist people with incorporating. That means, completing the proper paperwork, filing it with the proper office, etc.

I think you are misunderstanding the services that incorporation companies provide.


Lissa

R&S Exteriors

I think you met your match Mike

SlingerLissa makes allot of sense.

eastend

isn't it true that most states require an out-of-state corporation ( ie: foreign corp) to register with their secy of state, get a tax registry#, pay state taxes. etc , if doing business in that state?
So, if you're a DE corp, doing work in PA or NY or anywhere, wouldn't you still be responsible to file with the state you're working in, and conform to their regs?
Case in point: We're a NY corp; did work in CT and since it was a gov't project, we had to register with CT, file taxes there, etc. If I was a DE corp, I still would have had to done the same thing.
So, I agree with Mike- there's really no advantage to being a DE corp for us.

Teetorbilt

I've always wondered why so many corporate yachts have Delaware as a home port. The thick plottens.

__________________
You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

Mike Finley

Yes, exactly. Like I said if you get into specifics 99.99% of anybody on this site that I have seen in the last 3 years would be making a mistake incorporating anywhere but their home state.

I can say this without individually qualifying all those users in 3 years because it is so over whelming true. If you are an intelligent type, simply go over each advantage as listed here by Lissa in her well written copy and pasted reply and apply it to your situation. There won't be a single "advantage" listed that would become a disadvantage to you if you only incorporated in your home state.

Once again a simple example. Nadonailer asked about them because he heard there were a lot of advantages to them.

The same correlation exists say for instance asking the same question in regard to the stock market. I have heard there are a lot of advantages in investing in the stock market.

Yep, there sure are. Does that mean that there are so many that everyone should call up a broker tomorrow and invest every penny they have in the stock market? The two issues are identical, the only difference is the SEC will protect you from yourself with some of the safe gaurds built into the investment community.

anyways...

Please point them out and I will be more than happy to show you the error in your thinking by going into specifics. NV and Del corporations and the people who push them are tit for tat on the level of Amway, when they are being sold to companies the size of all of us here.

SlingerLissa

And this is where every business is different, and why folks need to seek out the advice of an attorney and/or CPA. There is no straight answer, wouldn't it be nice if there was!

Here's an example - Mail order companies and/or internet companies are usually NOT required to qualify in states that they may be doing business in because they may not have a nexus. A nexus is an office within the state, employees within the state, generating revenue within the state, etc.

In many states Foreign corporations are taxed differently than Domestic Corporations. Domestic being the state that you incorporated in. It just depends upon the state(s) in question, and the type of business your conducting. Some states require that you file a report, some don't. Some make that decision based on the entity type. Some states charge you to file a report, and you have to pay tax, some don't. Each state has their own requirements, and these requirements tend to change more frequently than I change my panties.

It's a lot to keep up on. Colorado as an example is cutting out the middle man (service company). They are offering online filing, retrieval (if your company was opening a bank account and the bank required a good standing certificate), etc. I guess it would be akin to the contractor doing all of the work, including the painting (which I hear tell, some do already).

Lissa

Mike Finley

Maybe this is why you aren't getting it. We all here are contractors.

SlingerLissa

Teetor, I've heard so much about you!

I've had quite a few customers form a Delaware LLC just for the purpose of buying a Yacht. LLC's in Delaware are not required to provide their member/manager (akin to the officer/director information for a Corporation) to the Secretary of State, and, they do not have a Department of Revenue to pay tax to. The Delaware Secretary of State is the whole kit and kaboodle. LLC's pay a flat $200.00 tax to the Secretary of State no matter how much revenue they make.

Lissa

SlingerLissa

Oh, I'm getting it alright, believe me. I completely understand that this is a contractor board. I've been watching the goings-on here for quite some time (thanks to Benn, he's been forcing me to).

But, what does being a contractor have to do with anything? It's great that you can speak for yourself, but why speak for someone else, unless of course you know the inner workings of every single contractor's business who posts (and let us not forget the multitude of people who NEVER post and simply read) here. If that's the case, I'll bow out and will no longer try to be helpful. I mean, after all, I was giving information that was requested on this board.

Saying that contractors would or wouldn't find the information I provided is well, ignorant. I have had plenty of entrepreneurs call our office out of the blue completely confused, bewildered and uncertain. And guess what, some of them were contractors looking for information and help. And that's all I'm trying to do is be helpful. If I can't help you, I'm 99.9% sure that I can be helpful someone else and that's all that matters.

Oh, and to be very clear... I'm not trying to sell the services of our company. Blame Benn, he said... Hey baby, someone's asking about Delaware vs. Nevada, can you give them info?

Lissa

Teetorbilt

I sure hope that what you heard wasn't about the flap at Brown. She was a kid and I had to deflect the onslaught.

Before my mouth runneth over, what have you heard?

__________________
You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

SlingerLissa

Oh, I see now....I really think I get where you're coming from. I'll explain, since you still have no idea where I'm coming from. In our industry, at least ten times a day we have customers ask us the Delaware/Nevada Advantages/Disadvantages. When they ask that, they're not necessarily asking us if Delaware/Nevada is better than forming in their home state. What they are usually asking is the difference between Delaware and Nevada.

By the way, if you would have read my original post fully, the first time (which you admitted you didn't) I am pretty sure that you would have understood that all I presented were facts. Facts can't be disputed whether you want them to be or not. The only reason why I even mentioned qualification, was that 9 times out of 10 folks who inquire about Delaware/Nevada aren't actually doing business in those states.

By the way, notifying people that they would may have to qualify in their home state if they are domesticated elsewhere is usually a pretty big deterant.

Who is pushing Delaware and Nevada Corporations? I hope you're not insinuating that I am. I did live and work in this industry in Delaware for almost nine years. But not anymore.

The simple fact is that Delaware and Nevada are hot spots, for their own reasons and for reasons that do not benefit EVERY business out there. When customers come to a service company they tell us what they want, not the other way around. That's what customer service is all about. And yes, I know, it's a dying breed in all industries.

Lissa

Brushslingers

duhdadah! I'll explain, she deals with million and billion dollars rollers, I even mentioned one name in a different post. Her dad works for one of the billion dollar rollers (mentioned in a different post)... cough trump cough.... however, the business aspect of small verses large isn't that much... all things considered, anything over what.. 300k is taxed at a different level than 280... so sometimes it would be beneficial to be incorped in a tax free state. Really depends on your accountant and lawyer. *I* have no clue on that crap... I leave it up to her.

__________________
Benn

SlingerLissa

I'm not in the habit of kissing and telling, but I'll tell you what I heard anyways. Benn has been talking about you and your posts. He's made me read quite a few, actually. He refers to you as "The Pirate".

I have to admit that everytime I see or hear your name a little voice in my head is screaming -

TEETOR TEETOR PUMPKIN EATER!