Why
Nevada?
"OK", you say, so how does setting up a Nevada
corporation or LLC save any tax? I live in
California and pay say 9.6% state tax."
Here is a brief insight into several simple
scenarios. There are many others. If you are in
business, and want the benefits alluded to in this
overview, then we should talk and tailor make a
package that will work in your particular
situation.
Scenario(s).
Among many workable solutions, one is to set up
a corporation or LLC. in your home state that is
your operating company. Let's call it LOST, INC.
Try as it might, it doesn't make a profit, yet it
keeps on running. So, no profit, no income taxes.
If LOST, INC. has only debts and no unsecured
assets then it is virtually judgment proof. Of
course, it makes enough gross income to pay
salaries and other expenses, but basically has
nothing left at the end of the year.
Next you set up a Nevada corporation (or LLC)
NEVADA GOLD, INC. This company then does
business with LOST, INC. For example, NEVADA GOLD
performs services i.e. purchases what LOST INC.
sells (marks it up) and then sells to LOST, INC.
and the profit stays with your Nevada corporation.
NEVADA GOLD purchases physical assets such as
equipment, machinery, vehicles, computers, and
leases them to LOST, INC. on a non-equity lease
and, of course, NEVADA GOLD makes money on the
lease which is an expense and tax deductible to
LOST INC.
Most state laws permit you to solicit business
in that state and not be registered to do business
there so long as you just solicit and don’t
actually sell the service or product there. The
concept is that you solicit the business and then
the purchaser enters into a sales contract which is
then ACCEPTED in Nevada. The customer is invoiced
and sends a check made to NEVADA GOLD which goes
into NEVADA GOLD's Nevada Bank. Hence, no business
was contracted in LOST INC's home state and there
are no profits or state taxes.
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Many consultants and other individuals arrange
to be employed by Nevada companies which, in turn,
bill the company for which the services are
performed and, again, the contract for services is
made In Nevada and payment goes into the NEVADA
GOLDs’ bank. Then NEVADA GOLD pays you, the
consultant, something less than it charges for your
services. The result is that you have a living
wherever you are residing and performing services
yet you have split your taxable income and saved
state taxes.
NEVADA GOLD can also loan money to LOST INC and
charge interest (Nevada has no usury laws). Money
from loans is NOT income and interest is deductible
to LOST INC as a business expense. One way of
funding NEVADA GOLD, INC., your Nevada start up
company, is to purchase shares in the Corporation
or LLC. There are many others scenarios that are
easily workable for you. By the way, a Nevada
corporation may have bearer shares, so no one is
able to easily ascertain from public records just
who the owner(s) are.
Asset Protection
One way to protect your hard-earned money from
unforeseen events which could result in judgments
which could wipe out your assets, is to have your
Nevada corporation make a loan to your current
business, and by properly documenting the
transaction, your Nevada corporation has the first
claim on your business assets. You might give your
Nevada corporation a promissory note, which is
payable on demand, for the funds which it lends to
your current business. Then, if the going gets
rough and someone's lawyer obtains a judgment
against you, for whatever reason, your Nevada
corporation can call the note and take possession
of your assets; in that way you still have full
control and use of your assets--and no one needs to
know that it was your Nevada corporation that
claimed your assets. It's almost like locking your
assets away in a closed vault where only you have
the combination.
Tax savings with Nevada corporations.
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