NEVADA IS ONE OF THE PREFERRED STATES FOR GOING PUBLIC

Nevada is another state, like Delaware, without any corporate income tax and until recently relatively low  population. Most of Nevada government revenues come from gaming, tourist industry, and franchise taxes. Like Delaware, Nevada has made significant efforts over the years to streamline its corporate law. Being contiguous to California, a high tax state, has enabled Nevada to siphon off quite a bit of incorporation business from California. In addition, because Nevada does not impose any individual income tax, it is a destination for residents of high income individuals.

In recent years, Nevada has lost some of its advantages because of the increase in annual fees. Together with the business license tax requirement, and other fees, the annual cost of maintaining a Nevada Corporation (excluding the cost of a registered agent) is about $500–a little more than a Delaware corporation. Devise franchise taxes are based on the number of shares are authorized to issue. For most public companies, this is an immaterial cost; however, there are some Nevada public companies with billions of shares outstanding and the fees can be up to $10,000 per year.

In contrast to Delaware, where the identity of officers and directors is not available online without the payment of an additional fee, all this information is freely available on website of the Nevada Secretary of State. It is possible to file articles of incorporation and annual reports online, however, making this much more convenient than Delaware.

Incorporation in Nevada for going public or an IPO is not as prestigious as Delaware, but it doesn’t lag too far behind.