Incorporate in Nevada?

Question

I am from NJ, and about to set up a RE investment company.  Normally would have set up an LLC but heard just last week at my real estate club-as an advertisement hook for our January meeting which will deal on the subject-that 40% of the time the corporate veil is pierced, so it might be better to inc. in Nevada.  I am looking for feedback on this, thanks.

Jerry W. · Answer

@Al Boettger, I would love a link if you have it to the article showing 40% fail rate for LLCs.  That has not been my experience.  The few times I have seen the veil pierced it is usually from someone who neglects the corporate formalities.  Using the LLC checkbook for your own uses is the biggest one, and undercapitializing is not far behind.  I am unaware of any piercing case where there was not an alter ego problem.  If that is the case the problem is not where you incorporate, the problem is not following the rules.  Filing in a different state won't help if you break the rules.

Anastasia G. · Answer

Matthew, I have my accounting practice, I would not offer to register LLC if it was something I was not competent in. I believe that attorneys charge too much money for 30 min of actual work that they delegate to legal staff. Thank you for your concerns.

Matthew Kreitzer · Answer

For help setting up LLCs, you should consult with an attorney licensed to practice in the state in which you want to incorporate. Do not accept aid from people in the form of legal document preparation or guidance on where to file such documents. In many states, such a practice is considered unauthorized practice of law, even if nothing of value is being exchanged between the parties.

As for whether or not Nevada is a good state for you to consider, there is more to consider from a legal perspective than simply whether or not it offers protection from creditors (which I am unable to tell you, since I am not licensed in that state). For information on how corporations work in Nevada, incorporation requirements, overhead costs of incorporation in Nevada, and other information, refer to the Nevada Code, Chapter 78. Otherwise, seek out a licensed attorney in Nevada.

Laurette Saint · Answer

In some states, like Georgia, you have to register your corp no matter WHERE you originally incorporated, so there's no privacy to be had!

Shurrone Jordan · Answer

That is good advice Matthew because things could get a little sticky if you do not seek an attorney who is able to give you the right information.  By the way Anastasia I heard the same buzz about incorporating in Nevada.   Thanks for your input Matthew.

Shurrone Jordan

Anastasia G. · Answer

hi Al!

I heard the buzz about incorporating in Nevada. We are doing the same search on it. Most likely will just keep everything in NJ. I am part of that real estate club and part of fortune builders. Let me know if you need help setting up LLCs. I will be at that meeting in Jan. Good luck!

Wayne Brooks · Answer

Nevada laws don't prevent piercing of the corporate veil.  Their big claim to fame is anonymity, and better BK treatment for debtors. If you think you need to try and hide your identity, go for it. Of course though you'll need a registered agent and some documentation giving you authority to contract on behalf of your entity, so anonymity may be gone anyway, and of course if you get sued it will be in NJ.  Local guys using Nevada corporations always raise a red flag for me, as scammers do love anonymity, don't they?

Incorporate in Nevada?

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