Nevada C corporation

One of the popular state to incorporate is Nevada. Nevada C corporation status is among the most popular C corporation status because of Nevada 's favorable corporate tax treatment. An example of how incorporating a Nevada C corporation works is shown below.

How to incorporate as a Nevada C corporation yet do business in home state?

Suppose a business owner has a business in Arizona but wants to incorporate in Nevada under Nevada state law. Then, to do business in Arizona, the business owner will have to be accepted to do business in Arizona under the Arizona law. Arizona will consider that business a foreign corporation even though the business owner is actually residing in Arizona and the majority of his or her business is done in Arizona. The business owner can incorporate his or her business in any state including Nevada and can do business in any states providing his or her business is accepted under those state laws. The term 'foreign corporation' refers to a business which has incorporated in another state. This compares to the term 'alien corporation' which refers to a business which has incorporated out of the country.

Reasons to incorporate in Nevada or in another state

Tax favorable state laws

The reasons why business owners may want to incorporate in Nevada or in another is primarily because of tax reasons. Different states impose tax differently. Nevada, for example, currently has no state tax for corporations. However, this may change in the future. Nevada C corporation status, therefore, has been popular among new corporations.

California, in comparison, has state tax for corporations and also uses different  tax law for determining how the tax is assessed. That means, when it comes to filing corporate taxes, corporations in California need to file two different tax returns which are calculated using different amounts of income and expense.

Click on 'next' to go to the second of reasons to incorporate a Nevada C corporation

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