Incorporation laws in Nevada are designed to stimulate business activity. It isn’t by accident the State has become arguably the best venue to form a corporation. Sometimes called “The Delaware of the West” due to its pro-business policies, Nevada is well-known as a popular state for businesses.
Absence of income tax creates an exceedingly attractive business environment. Top that with minimal reporting and limited disclosure requirements for corporations, and you start understanding why so many companies choose to incorporate in Nevada.
Under the Nevada Corporate Code directors, officers and stockholders do not need to reside or hold meetings in Nevada ( See NRS 78.310 ). Shareholders are not public record and Nevada does not impose a corporate income tax or franchise tax.
Unlike most states, in Nevada a corporation can issue shares for a promissory note. No minimum initial capital is required, and stock can be issued “for consideration consisting of any tangible or intangible property or benefit to the corporation” ( See NRS 78.211 ). Corporate directors are empowered to determine the value of these transactions, and their decision is final.
The more you learn about incorporating, the more you appreciate how the Legislature has designed Corporate Rules and Laws to promote incorporation here. Because of the positive impact on its business climate, Nevada competes as the best venue to form a corporation – second only to Delaware.
In fact, the state has become so successful at attracting companies to incorporate in Nevada, other state legislatures look to Nevada’s laws as a model, patterning their own corporate codes after Nevada’s to be competitive.
According to Inc. Magazine: “Nevada boasts two metros (Reno and Las Vegas) in the Top 15 Best Places for Doing Business in America”. Nevada is ranked number two in the nation as the best place to grow a business according to the Small Business Survival Index 2005.
With all the incentives offered to incorporate here, you might think everyone should form their corporation in Nevada. We believe choosing a corporation’s site should be done after due consideration. Nevada is not the ideal incorporation site for all circumstances. If your business will have a PHYSICAL OFFICE located in Nevada, or if your corporation will conduct business in more than one state, then Nevada may be the best choice.
The fundamental procedure to incorporate in Nevada involves the precursory steps of deciding on a company name; choosing the principals; and determining what the corporation’s objective is.
Assuming the company will be a domestic Nevada corporation transacting business for profit, it’s time to start the paper chase. To legally form a corporation, articles of incorporation are filed at the Secretary of State’s office.
All Nevada corporations must now use the statutory form required by the See NVSOS . An incorporator can include additional provisions to this instrument by appending the standard form with supplemental pages, but the NVSOS wants the preliminary details in their format.
The standard form deals only with the minimum provisions of NRS 78.035 which prescribes the abstract information necessary to form a corporation. This doesn’t mean an incorporator can’t or shouldn’t introduce more technical matters in the articles of incorporation. They should. But the state wants those matters outlined on supplemental pages to ease processing.
The MINIMUM provisions of Nevada’s statutory incorporation form are:
Next, the incorporation forms are submitted to one of the Secretary of State’s offices. There are offices in Carson City and a satellite location in Las Vegas. Which office to select depends partially on what level of processing is used. Standard processing is usually acceptable for most people, since the NVSOS moves quickly. To reduce the approval time to 24 hours an extra $125 fee applies. Four-hour processing is available.
The Las Vegas office doesn’t accept walk-in filings or non-expedited orders. To file the form in person, you have to do so in Carson City.
When the articles are approved, a certificate is returned to the organizer confirming the incorporation. A Nevada corporation’s legal existence begins the date the articles are filed . A certified copy is evidence of existence and incorporation of the corporation pursuant to NRS 78.055.
Now that the company is incorporated, important tasks remain for sustaining compliance with Nevada’s corporate code.
First, statute 78-105 provides a corporation “shall keep a copy of the following records” with its registered agent:
Corporations are empowered under Nevada law to adopt bylaws for the management of affairs and property. Either directors or shareholders can make bylaws. Generally, directors may adopt or repeal any bylaw, even if it was passed by shareholders. Articles of incorporation can limit the directors’ power to repeal bylaws created by shareholders. Conversely, articles may reserve the authority to adopt bylaws exclusively to the directors.
Usually, a Consent Action of the Board of Directors is utilized to adopt bylaws, appoint corporate officers and open bank accounts.
Also, Nevada requires an “Initial List of Officers” be lodged with the NVSOS on or before the last day of the first month following the incorporation date. The list must be updated annually.
A Nevada State Business License from the Secretary of State is obligatory for corporations with a base of operations in Nevada. If applicable, a sales tax license will need to be secured, also from the NV Department of Taxation.
Most Nevada municipalities have codes requiring permits before doing business in their jurisdictions.
If the corporation will physically conduct business in other states, a Nevada corporation needs to be domesticated to those venues. Otherwise, it loses its limited liability protection in the foreign jurisdictions. Compliance with the foreign state’s licensing codes is necessary at the state, county and local levels of government.
The important thing to be aware of is that merely filing incorporation documents with the Nevada Secretary of State does not completely form the corporation. Supplemental filings are needed and the directors should immediately adopt bylaws conforming to the Nevada Corporate Code.
Your corporation needs to secure licenses, permits, DBA (trade name) filings in every jurisdiction where it will transact business – at the state, county and local levels.
When we form Nevada corporations, we secure the legally mandated records for the records book, including conformed copies of the incorporation articles, Nevada bylaws and the organizational consent actions to adopt bylaws and appoint directors.
We do it efficiently and quickly, and at a competitive cost. When you’re ready to start, begin incorporating by completing the Nevada Incorporation Form to submit the essential details. We only ask for the information that is necessary to incorporate, and the pages will help you through the procedure with authoritative information. When you’re done, you can pay by credit card to get your incorporation underway.
This article is provided as an overview of Nevada incorporation procedure and incentives rather than a comprehensive study. For specifics on forming a Nevada Corporation, you should also see: