You might have heard, if you are a new small business owner, that Nevada has state laws favorable to business. This being the case, you might be considering Nevada incorporation for your small business. There are several factors that you will want to consider to determine if obtaining a Nevada LLC will be the best solution for business incorporation for your particular business. LLC for a Shopify or Etsy business
Businesses like to form an LLC in Nevada because Nevada does not have a state income tax. So if your business is located in and operates from Nevada, and any employees of your business are legal residents of Nevada, then you would qualify for this tax benefit. If, however, your business is located in another state and you choose to register in Nevada, you might still be liable for your business location state’s income tax.
If you choose to incorporate in Nevada, your privacy will be protected to a minor degree, more so than in several other states. This is because a corporations shareholders’ names are not in the Nevada Secretary of State’s records. However, their names can be listed on a Nevada business license, and they can be listed if you operate your business in a different home state as well.
As a major reason as to why incorporate, business owners often think of taxes. One advantage to owning and operating a business in Nevada is that Nevada does not exchange information with the Internal Revenue Service. It does bear mentioning that if your business is registered in another state, that other state, with the exception of Texas, does have an information exchange agreement with the IRS.
Another benefit to listing Nevada, Inc. as one of your business’s credentials has to do with the corporate veil, or the amount of liability you would assume if your business was sued. The corporate veil refers to the idea that in legal terms your business would have limited liability, one of the benefits of incorporating. It is more difficult to pierce the corporate veil in Nevada than in many other states. This is because a plaintiff in a lawsuit against a Nevada corporation must prove in court three things in order to gain access to your personal assets. They include the corporation being under an undue influence of the principal in the business, that the ethical line between ownership and interest in the company has been removed or made fuzzy, and that the classification of the corporation as an entity separate from the principal would be considered a fraud under the circumstances of which the case was brought. All three must be proved by the plaintiff, or the case will usually be dismissed in Nevada courts.