Advantages and Disadvantages to Incorporate in Nevada
The term incorporate in Nevada and others parts of the US and the world as a whole comes from the word corporation. The word corporation is derived from a Latin origin word corpus, which loosely translated means body. In the eyes of the legal system and the law, a corporation is a not a company but a legal person. This simply means that it has a separate individual identity that is not attached to that of its owner.
Being a legal person in law, any business that you incorporate in Nevada will be able to buy property and assets on their own, sell them on their own and even bring lawsuits. It also rids the owner of its obligations of debt and personal liability for those debts.
There are many advantages of making sure that you allow your business to incorporate in Nevada. Some of the advantages are highlighted below.
• Your business will have a legal precedent that can not only guide owners but also managers in how to operate.
• The transfer of securities is the easiest way to transfer ownership in such a company.
• These legal entities are the first stepping stone for large public companies.
• Unlike a partnership or a sole ownership business, the identity of the business is individual and not reliant on the owner which means that it can go on for as long as it wants unless it is shut down.
• Some corporations that have been incorporated can enjoy some common tax benefits.
• The default of a corporation is not considered a default of the owner of a share holder
• They are able to raise finances quicker than other legal structures of companies. They use the selling of shares as a mean of increasing revenue. This is both easy and has no liability incurred on the business especially in terms of the gearing ratio.
There are also some disadvantages of incorporation, these are outlined below:
• Incorporation of a business is a tough task, which can cost the business owner a considerable amount of money in comparison with what it would take to set up a sole proprietorship or partnership.
• These are certain ways that a corporation is run which cannot be changed even at the owner’s behest, such as the requirement to have annual meetings of owners and directors with general share holders.
There are several advantages and disadvantages of such a task and the choice for that is ultimately down to the owner’s preference.