Why you should organize your limited liability company in Nevada:

Nevada has been very aggressive in making laws to attract business to Nevada, especially from people in nearby California. Nevada has favorable state income tax rates. Nevada allows for bearer stock certificates where the holder of the certificate is the owner and no stockholder list is required. Nevada has designed its laws to make it very difficult for a creditor of a corporation from suing the stockholders personally. For this reason, Nevada corporations have grown in popularity.

Despite these positive aspects of Nevada's legislation, some business owners find more benefit by forming their companies in Delaware.

Delaware vs. Nevada

Our U.S. and foreign customers often ask about anonymity, confidentiality and privacy with regard to the owners, officers and directors of a corporation or members and managers of an LLC formed in Delaware or Nevada. The following explains how the Delaware LLC provides the most protection at the lowest cost.

It is much touted that the State of Nevada does not charge an income tax to businesses located in Nevada. Nevada allows for stockholders to remain anonymous (bearer stock certificates with no names of stockholders). The only way for officers, directors or members to remain private is to have a director nominee; this service is not ethical in our opinion. Nevada does not have an information sharing arrangement with the IRS (but this is irrelevant if your private information is published with the initial list of officers and directors). If you are located outside of Nevada, such as in California, you will pay California income tax and will probably have to register your Nevada Company as an out of state company doing business in California and pay the annual fee to California ($800 per year).

While Delaware does not have such a non-information sharing arrangement with the IRS, for most companies, that is not relevant because the State of Delaware does not obtain any financial or personal information about your company. Delaware companies also have a better reputation in the business community, as judged by the United States Chamber of Commerce.

If you are not located in Nevada, you will probably be better served incorporating in Delaware. The Delaware LLC has more privacy because it does not require the disclosure of member or manager names.

The minimum filing fee to form a Delaware corporation is $74.00 or $100.00 to form a Delaware LLC. In contrast the minimum filing fees to form a Nevada Corporation or LLC is $175.00 plus $125.00 to file the required list of Corporation Officers and Directors or LLC Members and Managers and $100 to expedite the filing. The minimal annual fee for a Delaware Corporation is $60.00 or $200.00 for an LLC in contrast to the Nevada Annual Corporation or LLC fee of $85.00.

Baililai does not voluntarily disclose any information about its customers unless under a court order. Baililai protects the privacy of its customers by forwarding any requests for information or notices of legal actions to its customers for the customers to decide whether and what to respond.

The Minutes, Bylaws and Stock Certificates which Baililai sends to its full service Delaware, Florida and Nevada Incorporation customers are private documents which may be kept confidential by the Stockholder or Stockholders. The Limited Liability Company Agreement which Agents and Corporations, Inc. prepares and sends to it's full service Delaware, Florida and Nevada LLC customers is a private document which may be kept confidential by the LLC Member or Members.

Delaware will accept the filing of the Annual Corporation Franchise Tax Report and payment without the listing of Officers and Directors and signature. The Delaware LLC Annual Report does not require any information or signature when it is filed with the $200.00 Annual Fee.

A Delaware Corporation or LLC does not have to obtain a business license or pay any Delaware income taxes if it does not do business in Delaware. A Nevada Corporation or LLC is required to apply and pay $25.00 for a one time business license even if it does not do business in Nevada. Neither Delaware nor Nevada requires a bank account to be opened or meetings to be held in the state. Please note that Delaware bank accounts are exempt from attachment by creditors (other than tax creditors and spousal and child support creditors).

This explanation and comparison will help you make your choice of State if you are looking for anonymity, privacy and confidentially when you incorporate or form an LLC.