Legal Question in Business Law in California

I've ended up incorporating my business in both California and Nevada based on advice from friends, some say California is better, some say Nevada. I need to figure out which to keep. The business is located in California and everything we do is located in California.

The advice given to incorporate in Nevada is for corporate protections (piercing corporate veil and such), I'm aware that trying to incorporate in Nevada for taxes probably won't end very well.

Should I keep the California or Nevada corporation?


Asked on 6/18/11, 2:43 am

2 Answers from Attorneys

Shawn Jackson The Jackson Law Firm, P.C.

Well, if you are "doing business in" California and all or most of your sales activity originates in California and unless you are a multi-director Board of Directors, I do not see the immediate advantages of incorporating in Nevada. Can you tell me more about who and why someone would tell you to incorporate in both states?

By Grace...

Shawn Jackson ESQ. (707) 584-4529

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Answered on 6/18/11, 6:58 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

A corporation cannot be incorporated in two states. You have two corporations, one a Nevada corporation and one a California corporation. Or, perhaps, you mean your business is incorporated in one of the states and registered to do business in the other.

There is no valid reason for a small business to incorporate in Nevada when its headquarters and operations are solely or primarily in California. None.

A suit seeking to pierce the corporate veil would be against the stockholder(s), officer(s) or directors, and could be brought under the laws of the place where they reside, without regard to the domicile of the corporation. Nevada doesn't protect that information any more than does California. Besides, if the corporation is doing business here, its legally-required registration forms will require disclosure of the officers and directors.

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Answered on 6/18/11, 9:53 am


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