Many business owners prefer to form a limited liability company or LLC, in Nevada, because the state of Nevada offers the most corporate friendly atmosphere. Nevada is also considered the best domicile state to form a limited liability company, as the laws here are designed to protect the interest of the business companies.
In order to form an LLC in Nevada, business owners need to file articles of organization with the Secretary of State. The articles of organization are similar in nature to the articles of incorporation, which are required to be prepared and signed by the members of the limited liability company. An operating agreement must also be drawn, to govern the operations of the limited liability company. A resident agent is required, along with an attorney, to properly form the LLC.
Many business owners choose to form the LLC in Nevada, even though the state where they are conducting business is different. The reason for such a decision is that they will be able to benefit from the pro-business laws of Nevada. Once a business is incorporated in Nevada, it makes the state of Nevada its domicile. After this, it can register this newly formed LLC in any other state, which will be termed as foreign registration. If the business is sued in its home state, the plaintiff will have to file in the domicile state, to attack the personal assets of the business owners.
Nevada Corporation Code does not hold all directors or employees responsible for their actions, taken on behalf of the corporation, if they are able to prove they believed it was legal. This is known as indemnification and it includes all civil, criminal and administrative acts. Therefore, forming a Nevada LLC provides protection for business owners from lawsuits that may threaten their personal assets.
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