Posts Tagged ‘Debt Relief’

Delaware vs. Nevada vs. Wyoming: Comparing Incorporation Heavens.

September 23rd, 2022

It is commonly recognized today that Delaware, Nevada and Wyoming can all be called “incorporation friendly” states due to their corporative laws and relatively low (or non-existent) fees and taxes. However, how would a person choose between the three? This article runs a comparison between the three states, summarizes the differences, and presents conclusions and tips to help you make a more educated choice of incorporation state.

It is commonly recognized today that Delaware,Guest Posting Nevada and Wyoming can all be called “incorporation friendly” states due to their corporative laws and relatively low (or non-existent) fees and taxes. However, how would a person choose between the three? This article runs a comparison between the three states, summarizes the differences, and presents conclusions and tips to help you make a more educated choice of incorporation state.

Delaware is good for big business

In general, Delaware, through its developed legal system and laws protecting shareholder rights, is geared toward the large complex public corporation, whereas and Wyoming are more attractive to the small privately held corporation. Delaware law tends to protect the rights of boards of directors and shareholders, while Nevada and Wyoming tend to favor management.

Does it mean Delaware is not the best place to incorporate your new business? Not necessarily. The choice to incorporate in Delaware depends on the long term goals of your corporation.

Delaware has an excellent body of corporate case law spanning 110 years regarding such matters as management / shareholder issues and mergers / acquisitions, and that’s precisely why the Fortune 500 are drawn to this state. Delaware laws tend to be “pro-management” when it comes to minority shareholder disputes. Huge public companies have literally hundreds of such disputes pending in the courts on any given day.

So if you are aiming to grow your company to become a Fortune 500 company (or at least planning it to attract VC investors and possibly go for IPO one day), Delaware’s case law offers many insights into what you can and cannot do, and what the likely consequences may be.

Unfortunately, Delaware also has corporate income tax, personal income tax, a state franchise tax, reporting requirements and regulations compelling disclosure of substantial amounts of information resulting in far less privacy for you. That makes Nevada and Wyoming much more attractive for small privately owned businesses.

Nevada or Wyoming?

Here are some things you should consider when choosing between those two states:

1. Information sharing with IRS:

Nevada is famed as the only state that does not share information with the IRS. Although that fact by itself is true, there are few things that you should know about it.

First of all, Wyoming does share information with the IRS, but only the information given by companies with real assets inside the state. So if you don’t have any real estate in Wyoming you are as protected in that regard as in Nevada.

Second, Nevada makes IRS mad. That means if you are in Nevada the IRS is targeting you because you are in a “non friendly” state.