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Incorporating In Nevada And Relying Upon Privacy To Protect You

Aug 17, 2007
When it comes to protecting your hard earned assets you want every advantage possible. When incorporating in Nevada it is often promised that there is a level of privacy for the owners of a corporation or LLC that will help them in case of a lawsuit. Some individuals looking to form a Nevada corporation or LLC are hoping that if they get sued no one will find out who the owner of the corporation or LLC may be. Thus, preventing them from being a the target of frivolous lawsuits. In the context of litigation, the best scenario is presenting properly structured business model and having the court rule in your favor resulting in your assets being protected. That would be ideal!

Now, if it takes longer for someone to get to first base in your situation to figure out who the owners are, wonderful, that just means the plaintiff will have to spend more money! After all, aren't most lawsuits a simple gain of economics? And if you can make it very expensive for the plaintiff to find your assets the better!

So what is the challenge...

The challenge is the creation of rock solid asset protection plan that does not rely solely on the illusory promise of privacy through the use of Bearer shares (which doesn't work) and nominees (which works to a certain degree). If the whole plan is designed to prevent the discovery of your assets to fend off a lawsuit and the corporation or LLC lacks substance; there are no employees anywhere; and no business license, the plan is doomed to fail. The only way you would be protected would be to hide under a rock, because you had to be so private!

Again, if you structure a rock solid asset protection plan and have privacy along with it that is the icing on the cake!

The common places most people have to give up their identity as being linked to a corporation are in the following areas:

1. Issuing stock
2. Obtaining a Nevada Business License
3. Opening a Nevada bank account
4. Being an employee or independent contractor to the corporation
5. Entering into other contracts or agreements
6. Loan applications from banks

It is important to realize that you may be private on the surface corporation, such as the state records, but eventually, your name will appear in one of these six (6) areas. You cannot be so private that your name won't appear in one of these six (6) areas, unless you choose to have no role in your corporation or LLC.

Nevada is pro-business and has a strong history of protecting the corporate veil. Creating a sound business model and understanding all of the strategies available to you will complement your plan of asset protection.
About the Author
Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 10 years NCP has assisted more than 4,500 business owners form LLCs and corporations to get their business off to a fast start! Visit http://www.nvinc.com for insight and essentials in proper entity formation.
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