7 Comparisons Between Delaware Incorporation and Nevada Incorporation

1) First lets start with several areas that they are the same in. Number one is that neither of the businesses require bank accounts, business meetings, or any other form of operations when incorporating in their state.

2) Secondly, neither of the states have income taxes when doing business outside of the state. So, if you start a new business, incorporated in Delaware or Nevada, but operating somewhere else, you won't have to pay income taxes on the Nevada or Delaware Incorporation (but you will probably need to pay income taxes in the state of operation).

3) Neither Delaware nor Nevada allows anonymity of stockholders (as of 2007, Nevada no longer allows bearer certificates).

4) For LLC formations, Delaware allows complete anonymity of members (owners). Nevada does not.

5) Delaware has a franchise tax for companies incorporated or formed as LLCs within the state. Nevada does not. (This gets a little complicated for Delaware Incorporation; basically $250 per year for an LLC formation, and $150 plus $75 for every 10,000 shares above 10,000 for a Delaware Incorporation for 1 of 2 possible tax methods, a discussion which is a little beyond the scope of this article).

6) For a Delaware Incorporation, the state of Delaware requires that places of operation outside of the state be disclosed. This is not a requirement of Nevada Incorporation.

7) And finally, start-up costs in both states are relatively low: minimum of about $90 for Delaware Incorporation and $200 for Nevada Incorporation.

So, when you're thinking about whether Delaware Incorporation or Nevada Incorporation is better, make sure to consider the above 7 issues. Both have their advantages and disadvantages when deciding to incorporate. One thing that is sometimes at issue is whether you intend to go public sometime. Then, it's said that Delaware's legal system is better, whereas Nevada Incorporation may be better for private company incorporation.

(While the above is intended to help educate you to make an informed decision and written to provide as accurate and valuable information as possible, please do not consider any of the above as professional or legal advice. Always be sure to get advice from authorized professionals whom you know to be trustworthy.)

Thanks for reading this comparison of Nevada Incorporations and Delaware Incorporations or LLC formations!