Corporate Strategies

Clients have used their Nevada corporations and corporate bases to their advantage in many interesting ways, especially those who have corporations in other states and are losing from 3 to 12% of their income to state corporate taxes. (If you have a corporation qualified with the state of California, for example, and are using California as your corporate base, you are paying a minimum of $9,600 on every $100,000 of taxable income.) Many have solved this problem by moving their corporate base or by setting up an additional corporation in Nevada.

You probably already provide your business with capital or services that it needs to function on a daily basis. With a little more imagination, a Nevada based corporation could be utilized to provide those very same functions. What if your Nevada corporation were to bill your present corporation for its management services in the amount of $150,000? That management fee is a tax deductible item reducing total taxable income to only $50,000. Then you could, by forming another Nevada corporation, provide accounting services to your current corporation and bill it $45,000 in accounting fees, leaving only $5,000 in taxable income. Get the idea?

All you need to do is make sure that the accounting and management are actually being done through your Nevada corporations, and that those services are being properly billed and invoiced. If you have someone appointed as officers and directors of your Nevada corporations other than yourself, no one can connect the ownership of the Nevada corporations (which is not public knowledge) with that of your current corporation (which most certainly is public knowledge).

Remember, Nevada has NO state income tax whatsoever. Therefore, all the income that appears in your Nevada corporations saves you thousands of dollars. This strategy provides you with a completely legal means of paying the least amount of tax on the money you have worked so hard to earn!

As important as the considerations of taxation are to businesses everywhere, we have found that the issue of liability is of equal concern to those who are involved in their own businesses. This is of particular importance in the economic times in which we live. For example, if you are an independent businessman (cabinet maker, barber, secretarial service, etc.) and have built your business on consistent, reliable service, you have worked hard and want to make sure you're protected from unforeseen events. No one can predict how the courts will rule when someone goes after everything you have, simply because he/she tripped on the sidewalk outside of your shop.

You will be more secure if you form a Nevada corporation to which your present business is indebted. Because of the debt owed by your business, and the foresight you had to make a UCC-1 filing in the applicable counties, the Nevada corporation has the first lien on all of its assets. Now when a legal adversary wins a judgment that closes down the shop, your Nevada corporation takes possession of the assets to which it has a legal right. Because you have incorporated in the state of Nevada, and have acted legally, you did not have to disclose your ownership of the Nevada Corporation. You have, therefore, protected all you have worked so hard to build.

There are other strategies for using your Nevada Corporation to your advantage which are far too numerous to mention here. Our clients are constantly discovering new uses for their Nevada based corporation. When executing any corporate strategy, always check with your legal and tax advisor's to tailor it to your specific situation.