- Nevada corporation
Companies law Company · Business Business entities Sole proprietorship Corporation
United States S corporation · C corporation
LLC · LLLP · Series LLC
Massachusetts business trust
Delaware statutory trust
UK / Ireland / Commonwealth Unlimited company
Community interest company
European Union / EEA SE · SCE · SPE · EEIG Elsewhere AB · AG · ANS · A/S · AS · GmbH
K.K. · N.V. · Oy · S.A. · more
Doctrines Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine Piercing the corporate veil
Related areas Contract · Civil procedure
Nevada, like the state of Delaware (see Delaware corporation), is well known as a corporate haven. Many major corporations are incorporated in Nevada, particularly corporations whose headquarters are located in California and other Western states.
Organizers of a business generally have a choice on where to incorporate the business. In the United States, corporations are generally organized pursuant to state law, rather than federal law. Moreover, a business need not establish or maintain a physical presence in a state in order to incorporate under the state's general corporation law. If the corporation transacts business in a state other than the state of incorporation, it is considered by the other state to be a foreign corporation. See NRS Chapter 80. For example, a business may be headquartered in San Jose, California but incorporated in Nevada. The corporation is a Nevada corporation and the State of California will consider it to be a foreign corporation. See California Corporations Code Section 171.
In the United States, states generally, but not invariably, follow the internal affairs doctrine. "The internal affairs doctrine is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation's internal affairs ... because otherwise a corporation could be faced with conflicting demands." Under the internal affairs doctrine, courts will generally apply the law of the state of incorporation to the "internal affairs" of the corporation.
States can derive revenues through the incorporation of businesses. These revenues include direct payments to the state in the form of filing and other fees. The state can also receive revenues indirectly through businesses (law firms, resident agents, accounts and other service providers) to corporations. The Nevada legislature has tried to make Nevada an attractive alternative to Delaware as a state for incorporation. In many instances, it has tried to "out Delaware" Delaware.
Nevada's laws offer flexibility to a board of directors in managing the affairs of a corporation, and permit management to put in place strong protection from hostile takeovers. It also provides extremely strong protection against piercing the corporate veil, where a corporation's owners can be held responsible for the actions of a corporation. As of 2007[update], in all of the court cases involving a corporation, in a period of twenty years, in only one case has the piercing of a corporate veil been permitted under Nevada law, and in this single case the reason was because of fraud on the part of the corporation's owners.
Because the provisions on "piercing the corporate veil" are corporate governance matters, if a corporation chartered in California, for example, (which has much more creditor friendly provisions permitting this) is sued anywhere, California law applies, but if a corporation chartered in Nevada, which operates only in California, is sued in a California court, the California court would use Nevada law in determining what the requirements permitting this (Note that foreign corporations, including those, for example, incorporated in Nevada, may be subject to California Corporation Code 2115). On the issue of "piercing the corporate veil," Nevada law applies (which is much more supportive of the corporation's interest), even if the corporation only operates in California and has never had any other contact with Nevada and is simply chartered there as a "flag of convenience."
Nevada (unlike other states) permits the corporation's articles of incorporation to vest authority to adopt, amend or repeal bylaws exclusively in the directors, so that shareholders would not be able to change the corporation's bylaws.
Disputes over the internal affairs of Nevada corporations are usually filed in the Nevada District Courts, from which judgments can be appealed to the Supreme Court of Nevada, the state supreme court. Because of the large number of corporations chartered in Nevada, the courts in that state are more focused on the application of corporate law than the courts of most other states. Nevada's courts are developing a strong body of case law that serves to give corporations and their counsel guidance on matters of corporate governance, although Delaware and some other states have a larger body of such case law.
Nevada's tax structure is also a large benefit to incorporation in Nevada. Nevada has no franchise tax. It also has no corporate income tax or personal income tax. While Nevada likes to promote that there are "no corporation taxes" in the state, there is an annual $200 "Business License Fee" which is paid to the Nevada Department of Taxation in some cases (but not all). Nevada and Texas are the only two states that do not have information sharing agreements with the Internal Revenue Service.
- Nevada Corporation Statutes
- Nevada Government Main Website
- Nevada Secretary of State
- Bishop & Zucker on Nevada Corporations and Limited Liability Companies (2011) (Treatise)
- Keith Paul Bishop, Silver Standard – There are many benefits to incorporating in Nevada but tax avoidance is not one of them, Los Angeles Lawyer, November 2008
Wikimedia Foundation. 2010.
Look at other dictionaries:
Nevada Corporation — 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… … Investment dictionary
Sierra Nevada Corporation — (SNC) est une entreprise d électronique et un intégrateur de systèmes américain fournisseur de l Armée américaine, de la NASA et de l industrie spatiale. SNC propose, via sa filiale SpaceDev acquise en 2008, le vaisseau spatial Dream Chaser.… … Wikipédia en Français
Nevada National Security Site — Nevada Test Site November 1951 nuclear test at Nevada Test Site. Test is shot Dog from Operation Buster, with a yield of 21 kilotonnes of TNT (88 TJ). It was the f … Wikipedia
Nevada Landing Hotel and Casino — Casino sign, which remained standing after the building was demolished. The sign was demolished in 2010. Address 2 Goodsprings Road Jean, Nevada 89019 … Wikipedia
Corporation — This article is about business corporations. For other uses, see Corporation (disambiguation). Corporate redirects here. For the Bollywood film, see Corporate (film). A corporation is created under the laws of a state as a separate legal entity… … Wikipedia
Nevada State Bank — Type Subsidiary Industry Finance Founded 1959 Headquarters Las Vegas, Nevada, USA Key people Dallas Haun, Chairman and CEO … Wikipedia
Nevada Northern Railway — Reporting mark NN Locale Nevada Dates of operation 1905–1983 Track gauge 4 ft 8 1⁄2 in (1,435 mm) (standard gauge) … Wikipedia
Nevada Power Company — headquarters in Las Vegas Nevada Power Company is a Las Vegas based company that produces, distributes and sells electricity in southern part of the U.S. state of Nevada. As of 2005, Nevada Power had over 700,000 electric customers in parts of… … Wikipedia
Nevada Theatre — U.S. National Register of Historic Places California Historic Landmark #863 … Wikipedia
Nevada Central Railroad — Locale Battle Mountain Austin, Nevada Dates of operation 1879–1938 Track gauge 3 feet (910 mm) Headquarters Austin, Nevada The Nevada Central Railroad was a narrow gauge railroad, completed in 1880 between Batt … Wikipedia