       
Where You Should Incorporate Delaware Nevada vs Wyoming Side- By- Side Comparison Why Wyoming We
hope the foregoing review of business entities has been helpful and given
you some ideas. All of them have a place, many can be used in conjunction
with one another, but by far our favorite is the corporation. Corporations
have become the quintessential form of doing business throughout the world
for more than a century. Just the simple act of incorporating in your home
state can protect your personal assets, reduce taxes and provide a
universe of "fringe benefits" such as retirement plans, deferred
compensation, annuities, life insurance, and medical reimbursement plans
just to name a very few. Moreover, many of these benefits may be tax
deductible to the corporation and tax-free to the employee (that would be
you). So what state should you incorporate in? Exploding the Delaware Myth You
may have heard that Delaware is the "incorporation capital" of
America. It’s true! More than 60% of Fortune 500 companies are
incorporated in Delaware. If you own a Fortune 500 company (and for your
sake we hope you do) then by all means you should strongly consider
incorporating in Delaware. However, if you are a small or medium sized
business that is more concerned with tax benefits, flexibility, privacy
and a minimum of bureaucracy and "red tape" then Wyoming is the
clear choice for you. You
see, Delaware has an excellent body of corporate case law spanning 110
years regarding such matters as management/shareholder issues and
mergers/acquisitions. That’s precisely why the Fortune 500 are drawn to
the state of Delaware. 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 managing a Fortune 500 company, 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. We are always surprised
at how many otherwise knowledgeable professionals advise their small
business/ entrepreneur clients to incorporate in Delaware. Well
intentioned though it may be; it is not sound advice. Perhaps
you’re one of those who received such advice and have incorporated your
business in Delaware. It’s not to late! Refer to the preceding section
and you will see that we can easily "move" your corporation to
Wyoming while preserving the original incorporation date. Nevada vs Wyoming Perhaps
you’re one of those who have read all the web sites that promote
incorporating your business in Nevada. The reasons given usually are:
1. Nevada does not share information with the IRS. Wyoming
Answer: Nevada makes the IRS mad. Wyoming does share information with the IRS,
but only the information given by companies with real assets inside the
state. So you have the best of both worlds, the IRS is not targeting you
because you are in a non friendly state (like they may in Nevada), and yet
there is no information that is shared because most businesses do not have
real assets inside the state of Wyoming. 2.
Nevada allows bearer shares. Wyoming
Answer: Nevada's law does not say anything about bearer shares. Wyoming's law
allows them. 3.
Nevada has privacy. Wyoming
Answer: Go to the Secretary of State of Nevada's web site and type in a person's
last name and/or first name. You will see a list of all companies that
person is a part of in Nevada. Go to the Secretary of State of Wyoming's
web site and you will find that the only way to search on a company is by
company name. You can not search using a person's name. 4.
No taxes in Nevada. Wyoming
Answer: No state income taxes on people or companies in Wyoming either And
Wyoming is not considering any. Nevada is. There are more comparisons in the chart below. A Side by Side Comparison of Wyoming
and Nevada and Delaware:
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