| How many directors do I need? |
At least one. |
| How specific does my purpose have to be? |
When the corporation is formed, we state "Any lawful purpose." However, when we prepare the minutes for the first Board of Directors meeting, we must have an exact purpose. That purpose can always be changed by the Board of Directors and recorded in the Corporate Minutes, unless your business requires a state license or approval (i.e., bank, engineer, doctor, insurance broker, and other professions that require state registration). |
| What is meant by the term "foreign corporation? |
Corporations formed or incorporated in the USA but doing business in another state (other than the incorporating state) are referred to as "foreign corporations." Corporations formed or registered outside the USA in foreign countries are referred to as "offshore" corporations or companies. |
| How do I qualify the corporation to do business in states other than Nevada (the incorporating state)? |
You can register the Corporation as a foreign corporation in any State by registering with the Office of the Secretary of State of the state you want to do business in. You may require one additional set of "Certified Articles of Incorporation," and a "Letter of Good Standing" or "Corporate Existence," from Nevada. This Letter has a limited effective existence period. Some states accept them for 30, 60, or 90 days from the issue date. If the letter is not filed within a short period of time (determined by the acceptance state), you will be required to order another letter. Of course, fees and processing for the first and all subsequent letters will be applicable. Do not order this letter until you are ready to register your Nevada corporation as a Foreign Corporation. If you are only doing business in NEVADA, there is no need to register your corporation in any other state. |
| Will the Corporation have to file a Corporate Tax Return? |
Nevada has NO state tax on corporate profit. Of course, the corporation must file a Federal Corporation Tax Return. CATS is not licensed to provide tax advice. Please consult a qualified and licensed tax professional, as required. |
| What does "doing business" mean? |
This varies from state to state. |
| Do I need an employer identification number (EIN)? |
You will need an EIN to open the corporate bank account. |
| Where do I get an EIN? |
The IRS processes more than 21,000 applications daily. CATS will assist clients for the immediate processing of an EIN. |
| Do I need a representative in Nevada? |
CATS will act as your Registered Agent (RA) within the State of Nevada, for your corporation. If you select option 3, 4, or 5 there is no additional fee for this service during the first year. Upon starting the second year, CATS charges a nominal annual fee for this service. A registered agent of the corporation is required by Nevada Revised Statute. |
| What is the annual state maintenance fee for a Nevada corporation? |
The annual state filing fee is $125.00 minimum. |
| Are there any hidden fees? |
Well, yes and no. Within sixty (60) days after your incorporation date, the state charges a $125.00 fee to register the initial List of Officers of the Corporation. This fee is not considered part of the incorporation cost, because you cannot appoint the officers until after you are incorporated. This document is similar to the annual list of officers to be filed before completion of the anniversary month of the corporation. Also, Nevada has recently required most corporations with Federal net income exceeding $21,500 to obtain business licenses for a quite reasonable $100 annual fee. CATS can provide these and other Registered Agent services for your new corporation. Please call us at (702) 367-1931 to discuss.
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| What is “capitalization” and “par value”? |
If you had incorporated for 25,000 shares of stock with a value of $1.00 per share, and if you were going to divide the share(s) equally between four (4) persons to raise money or capital for starting the corporation, each person would give you $6,250.00 for 6,250 shares of stock. "Capitalization" has nothing to do with the value of the corporation. The corporation could be worth $1,000,000.00, but the capitalization is still $25,000.00 with a par or per share value of $1.00 each. Of course, if the value of the corporation was $1,000,000.00 each of the four (4) shareholders could be worth $250,000.00 each. Nevada has no required minimum capitalization.
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| Do I need a Nevada business license? |
If you are going to do business in Nevada, yes. Entities must have a state business license, which is different than a county business license. Effective July 1, 2009, the state business license fee for a new business registration and the annual renewal fee is a reasonable $200/year. And, the Office of the Secretary of State will possess the responsibility to administer and collect said fee effective October 1, 2009. Please contact CATS at (702) 367-1931 for more information.
If you are required to obtain a Nevada business license, CATS can file and process your Nevada business license in Las Vegas (Clark County, Nevada), and open a corporate checking account with an inter-state bank. CATS provides this service for a nominal fee, and you don’t even have to leave your home state. If you are planning to visit Las Vegas, and want to file your own business license, CATS will direct you to the applicable state and county offices. Of course, CATS provides this information free to our clients. Normal processing of all licenses can generally be completed in one day.
If you are going to do business in another state, you should also consult the county or city business license department where you want to conduct business. Each state has its own business license requirements.
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Sole Proprietorship |
Partnership |
Corporation |
| Pro |
Easy to create, limited restrictions and regulations; direct ownership and control; minimum investment; profits are retained by owner; and ownership is transferable.
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Easy formation, moderate restrictions and regulations; moderate capital resources are required for investment; and shared monetary liability between partners.
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Limited liability; ownership is transferable; continuous existence; legal entity; capital is raised through sale of stock; and may be taxed as partnership.
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| Con |
Unlimited personal liability; limited capital;
terminates upon death of owner; personal credit utilized for securement of business loans; and profits are taxable as personal income.
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Unlimited personal liability shared between partners; divided business authority; difficult to raise capital; lack of continuity; terminates upon death of partner, bankruptcy, or withdrawal; and not transferable without consent of partners.
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Professional service costs for formation and filing; strictly regulated by state; state charter restrictions; minutes should be written and retained; and double taxation as: (a) corporation: and (b) personal.
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