Asset Protection

The corporation is traditionally the first line of defense in any asset protection strategy because of the long history of statutory and case law that supports the goal of achieving limited liability. This liability protection is only available because of the way the law separates the corporation from any associated individual.

The "corporate veil," refers to the separation between the individual and the company. It is the most valuable quality that the corporation offers. Care must be taken to preserve the corporate veil, because if it is "pierced," the corporation may have no asset protection.

Silver Shield Services, Inc. is prepared to assist you with the formalities that are necessary with keeping your corporation's affairs in good standing. Give us a call at (775) 882-4822 for a free consultation.

Passive Income

A corporation may have up to 59% of its income from passive sources. Once the total passive income goes above 60% then the corporation may be designated as a personal holding company and may be taxed at personal income tax rates instead of corporate tax rates. Examples of passive income are dividends, rent, interest, royalties, and annuites.

Nevada Disclosure Requirements

Nevada may have the simplest, and most favorable disclosure requirements. A one page form requires the disclosure of the President, Secretary, Treasurer, and at least one Director of the corporation. Since Nevada allows for a one-man corporation, the name of the same individual may be used in each instance. No other information is required.

Although that list is then filed annually, the Nevada corporation is not required to file a list of officers and directors more frequently than on an annual basis, even if there is a mid-year changing of the guard. The corporation is not required to keep any officer or director for the entire year. They can be removed from office and replaced at any time.

Tort Reform

In a responce to the increased cost of doing business Nevada has enacted tort reform legislation that have provisions which limit exemplary damages and abolish joint and several liabilities, except in certain cases. Before tort reform legislation, it was common for courts to award exemplary damages three to five times greater than the compensatory damages. Nevada statutes now limits exemplary damages to an amount no greater that $300,000 when the amount of compensatory damages is less than $100,000. These limitations do not apply to situations involving product liability, the release of toxic substances, and insurer bad faith. The abolishment of joint and several liabilities means that if a judgement is entered against several defendants, they are each equally liable for the full amount of the judgement, without regard to their relative fault in causing damages. Nevada law now requires the court to assign a percentage of fault to each defendant, from zero to one hundred with the total equal to 100 percent. Each defendant is required to pay a share of the total judgement no greater than his/her percentage of fault.

Limits on State's Power to Tax Mutistate Corporations

Two cases that were appealed to the United States Supreme Court in 1982, Woolworth v. New Mexico and Asarco v. Idaho had the following results. Although these cases each came from different states, the issues involved were similar. The Supreme Court ruled that if a company is not based within a state, that state may not tax the dividends , interest income and capital gains earned by the corporation's foreign subsidiaries. Prior to these rulings, many states required multistate and multinational corporations to pay taxes on earning of their independent subsidiaries, no matter where they were based.

Presidential Election

We think most would agree that it has been an interesting national political procees over the last 6 months. Before this year who knew there was such a thing as a "super delagate". It makes one wonder what other surprises lie ahead. The stage now seems to be set with both parties having decided on their canidates. No one, at this point, can predict who will win in the general election but we can prepare business and personal affairs with long established Nevada corporate strategies for asset protection, privacy and tax reduction. Give us a call at 775-577-4822 to discuss a strategy that works for you.

Articles of Incorporation

Articles of Incorporation is a document that must be filed with the Secretary of State to be recognized as a corporation. It is considered a form of contract between the incorporators, the state, and the shareholders regarding the function, responsibilities, and duties of the corporation to the others. In Nevada, the articles of incorporation must contain 5 mandatory items and should contain an optional item which eliminates the personal liability of a director or stockholder. To make sure your articles of incorporation take full advantage of all the Nevada advantages please call the Silver Shield Services operation department at (775) 577-4822.