Forming a C Corp in Nevada

One of the best things about forming a C corp is that you don’t always have to form the corporation in the state that you live in. For example, if you live in CA, but plan to do most of your business in Utah you should incorporate your business in Utah. The reason for this is that when you are incorporating a business you need to incorporate it in the state that you will primarily be doing business in, but you can also incorporate the business in your home state or another state.

Many people choose to incorporate their C corp in other states because of the benefits that those other states have to offer. One of the biggest benefits that other states have to offer a C corp is income taxes; some states have higher income tax rates, while other states simply have no income tax at all. Forming a C corp in a state that does not require income tax, means each year your C corp will only have to pay federal taxes. The no income tax benefit of forming a C corp in another state is what draws corporations to the state of Nevada.

Another reason that people choose to form a C corp in the state of Nevada is how business friendly the state of Nevada is. Nevada is the toughest state in the country when it comes to protecting your business. They offer some of the toughest liability and asset protection laws in the country, which is beneficial for businesses because it limits the chances of being sued by unhappy consumers.

The most important step to incorporating your C corp in Nevada is writing and filing your articles of incorporation. If you live out of state and wish to form your C corp in Nevada you will need to have a registered agent that lives in the state of Nevada, the registered agent’s name and address will need t be included in the articles of incorporation.

Articles of Incorporation

The articles of incorporation, which is different than the certificate of incorporation, is a legal document that filed with the state to form your corporation. These articles do not contain the bylaws, which are the rules that your corporation will follow, but without the articles of incorporation, your corporation cannot exist. They describe any identifying and operating characteristics of your corporation, rather than the rules that your corporation must follow when conducting business.

Regardless of the size or type of the business you are forming, there are certain things that must be included in the articles of incorporation. This basic information generally required by most states in the U.S. You will want to check with the state where you business is being formed before writing your articles of incorporation so that you don’t miss any of their specific requirements. Included in the articles of incorporation are the corporation’s name and physical address. The address needs to be the principal place of business. You also need to include the corporate purpose; most states allow you to state it in broad language, rather than limiting the corporation’s business prospects by not including a specific industry. For example, you could say…

“The company’s purpose is to engage in any lawful activity for which a corporation may be organized under the laws of the state.”

Rather than saying…

“The company’s purpose is to sell bikes and bicycle related repair services to the general public.”

You must also include the name and address of your corporation’s registered agent, this person is authorized to accept legal documents on behalf of your corporation. The last thing that must be included is stock information, including classes, number of shares issued, and the value of each share.

When it comes to preparing the articles of incorporation, you can hire a corporate lawyer to do it, a trusted CPA, you can use an online incorporation service, or you can do it yourself. If you choose to write the articles of incorporation yourself make sure you do your research so that you get it right the first time.  This is a very important part of distancing yourself from business liability so don’t take this step lightly.