Nevada Corporation Formation Guide

Complete guide to forming and managing all types of Nevada corporations: C-Corp, S-Corp, Close Corporation, Benefit Corporation, Nonprofit, and Professional Corporations

No Tax Income Tax
$500 Annual License
NRS 78 C-Corp Statute
Strong Director Protection

Nevada Corporation Types at a Glance

Nevada offers seven distinct corporate structures, each governed by specific chapters of NRS Title 7.

🗺️ Complete Nevada Corporate Entity Map

Entity Type Statute Best For Key Feature
C-Corporation NRS 78 Standard for-profit businesses, venture-backed startups Traditional corporate structure, unlimited shareholders
S-Corporation NRS 78 + IRS election Small businesses wanting pass-through taxation Federal tax status (not NV entity type), max 100 shareholders
Close Corporation NRS 78A Family businesses, tight shareholder groups Can eliminate board, shareholder management, transfer restrictions
Benefit Corporation NRS 78B Mission-driven businesses, social enterprises Must create public benefit, enhanced stakeholder duties
Nonprofit Corporation NRS 82 Charities, 501(c)(3) organizations, foundations Public benefit, mutual benefit, or religious purposes
Professional Corporation (PC) NRS 89 Doctors, lawyers, CPAs, licensed professionals Ownership restricted to licensed professionals
Cooperative Corporation NRS 81 Agricultural co-ops, consumer cooperatives Member-owned, democratic control

❓ Which Nevada Corporation Type Do You Need?

Tech Startup / Venture-Backed

→ C-Corporation (NRS 78)

VCs expect Delaware or Nevada C-Corps. Unlimited shareholders, preferred stock, stock options all work seamlessly.

Why Nevada over Delaware? No franchise tax, stronger director protection, similar corporate law.

Small Business / Main Street

→ S-Corporation or LLC

Form NRS 78 C-Corp, elect S-status with IRS for pass-through taxation. Or just use an LLC taxed as S-Corp (simpler).

Nevada has no state income tax, so S vs C matters only for federal taxes.

Family Business / Restricted Ownership

→ Close Corporation (NRS 78A)

Eliminate board of directors, run by shareholder agreement. Strict transfer restrictions keep ownership in family.

Social Enterprise / Mission-Driven

→ Benefit Corporation (NRS 78B)

Create general public benefit (and optionally specific benefits). Directors must consider stakeholders, not just shareholders.

Charity / 501(c)(3)

→ Nonprofit Corporation (NRS 82)

Public benefit corporation eligible for federal tax exemption. Must include non-distribution clause in Articles.

Doctor / Lawyer / CPA

→ Professional Corporation (NRS 89)

Only licensed professionals can own shares. PC doesn't shield you from malpractice (get insurance!).

📍
Why Nevada vs Delaware?

Delaware wins if: Raising VC money (they're used to DGCL), going public (most IPOs are DE corps), complex preferred stock structures.

Nevada wins if: Want to avoid franchise tax ($400-180K+/year in DE based on shares), stronger director/officer liability protection, similar anti-takeover statutes, no income tax.

Nevada C-Corporation Formation

Standard Nevada for-profit corporation under NRS Chapter 78. Step-by-step formation, requirements, and ongoing compliance.

📋 How to Form a Nevada C-Corporation

1 Choose a Corporate Name

Requirements (NRS 78.035):

  • Must be distinguishable from existing NV entities on file with Secretary of State
  • Must contain "Corporation," "Incorporated," "Company," "Limited" or abbreviation (Corp., Inc., Co., Ltd.)
  • Cannot contain restricted words (Bank, Trust, Insurance) without approval
  • Check availability: Nevada SOS Entity Search

Tip: Reserve name for 90 days ($25 fee) if not ready to file Articles immediately.

2 Appoint a Nevada Registered Agent

Requirements (NRS 77 - Model Registered Agents Act):

  • Must have Nevada street address (not P.O. box)
  • Must be available during normal business hours
  • Can be individual Nevada resident or registered agent company
  • Receives service of process, government notices, compliance documents

Cost: Commercial registered agent services: $50-300/year.

3 Prepare and File Articles of Incorporation

Required Content (NRS 78.030-78.035):

  • Corporate name
  • Registered agent name and Nevada street address
  • Number of authorized shares (and classes if multiple)
  • Name and address of incorporator
  • Purpose (can be general: "any lawful purpose")

Optional (but recommended for custom structures):

  • Par value of shares
  • Preemptive rights provisions
  • Cumulative voting
  • Director liability limitations (NRS 78.138)
  • Indemnification provisions (NRS 78.7502)

Filing: Online via Nevada SOS Online Filing or mail/deliver paper filing.

4 File Initial List of Officers/Directors + State Business License

Due: Within 30 days after filing Articles (or can file simultaneously).

Initial List (NRS 78.150):

  • Names and addresses of president, secretary, treasurer
  • Names and addresses of all directors
  • Fee: $150

State Business License (NRS 76):

  • Required for all Nevada corporations
  • Fee: $500 (corporations) — higher than LLCs ($200)
  • Renewable annually in corporation's anniversary month
5 Adopt Bylaws and Hold Organizational Meeting

Bylaws (NRS 78.120):

  • Not filed with state (internal document)
  • Governs corporate operations: meetings, quorum, voting, committees, officers
  • Adopted by board of directors (or incorporator if no directors named yet)

Organizational Resolutions:

  • Approve bylaws
  • Elect officers
  • Authorize share issuance (NRS 78.211)
  • Adopt stock certificate form
  • Approve corporate seal, bank account, fiscal year
  • Authorize S-corp election (if applicable)
6 Issue Stock and Maintain Stock Ledger

Stock Issuance (NRS 78.211):

  • Board authorizes number of shares and price
  • Can issue for cash, property, or services
  • Must receive consideration equal to or greater than par value (if par value set)
  • Issue stock certificates to shareholders

Stock Ledger: Maintain record of all shareholders, shares issued, dates, and transfers.

💰 Nevada C-Corporation Formation Costs

Articles of Incorporation (≤75,000 shares authorized) $75
Initial List of Officers/Directors $150
State Business License (corporations) $500
Registered Agent (annual, commercial service) $50-300
Total Formation Cost $775 - $1,025

Annual Renewal (Anniversary Month):

Annual List of Officers/Directors $150
State Business License Renewal $500
Registered Agent (annual) $50-300
Total Annual Cost $700 - $950/year

Note: Filing fee increases for corporations with >75,000 authorized shares. See NV SOS Fee Schedule.

⚠️
Annual List Due Date: Nevada Annual List of Officers/Directors and Business License renewal are due on the last day of the month of your anniversary month. Miss the deadline and you face $75 late fee, plus potential administrative dissolution.

Tip: Set a calendar reminder 30 days before your anniversary month.

Nevada S-Corporation Status

S-Corp is a federal tax election, not a Nevada entity type. Here's what it actually means and when it helps.

🚨
Critical Misunderstanding: "S-corporation" is NOT a Nevada entity type. It's a federal tax status you elect by filing IRS Form 2553.

You still form a regular Nevada C-Corporation (NRS 78) or Nevada LLC, then elect S-corp taxation with the IRS.

🏢 What Is S-Corp Status?

Definition: An S-corporation is a pass-through tax entity under IRC Subchapter S. Instead of the corporation paying federal income tax, profits and losses flow through to shareholders' personal returns.

Factor C-Corporation (Default) S-Corporation (IRS Election)
Federal Taxation Corporation pays tax at 21% (2024 rate), then shareholders taxed on dividends (double taxation) Pass-through: Income flows to shareholders, taxed once at individual rates
Nevada State Tax None (NV has no corporate or personal income tax) None (NV has no corporate or personal income tax)
Self-Employment Tax N/A (corporations don't pay SE tax) Only on reasonable W-2 salary, not on distributions
Shareholder Limit Unlimited shareholders Max 100 shareholders (certain trusts/estates count as one)
Stock Classes Multiple classes allowed Only one class of stock (different voting rights OK)
Eligible Shareholders Anyone (individuals, corps, foreigners, etc.) Only U.S. citizens/residents, certain trusts, estates

📊 How to Elect S-Corp Status

1 Form Nevada C-Corporation (or LLC)

File Articles of Incorporation under NRS 78 (or Articles of Organization for LLC). Complete all formation steps listed in C-Corp tab.

2 File IRS Form 2553

Form 2553: Election by a Small Business Corporation

  • Deadline: No more than 2 months and 15 days after start of tax year you want S-status to begin, OR anytime during preceding tax year
  • All shareholders must consent by signing Form 2553
  • Send to IRS address listed in form instructions
  • IRS sends confirmation letter (keep it!)

Download: IRS Form 2553

3 Run Payroll for Shareholder-Employees

If you work in the business, you must pay yourself a "reasonable salary" as W-2 employee. Remaining profits distributed as dividends (not subject to self-employment tax).

IRS heavily audits S-corps that pay too-low salaries to avoid payroll tax.

4 File Form 1120-S Annually

S-corporations file Form 1120-S (U.S. Income Tax Return for an S Corporation) + Schedule K-1 for each shareholder showing their share of income/loss.

💡 When S-Corp Makes Sense (and When It Doesn't)

✅ S-Corp Makes Sense If:

  • Small business with $60K+ net income (save on self-employment tax)
  • All shareholders are U.S. citizens/residents
  • Don't need multiple stock classes (single class OK)
  • Fewer than 100 shareholders
  • Want pass-through taxation to avoid double tax

❌ S-Corp Doesn't Work If:

  • Raising VC money (they need preferred stock = multiple classes)
  • Foreign investors or corporate investors
  • Plan to go public or have 100+ shareholders
  • Want to retain earnings in corp at 21% rate (vs your higher personal rate)
  • Want stock options with favorable tax treatment (ISOs easier in C-corp)
💡
S-Corp Tax Savings Example:

You run a Nevada consulting corp, net $120K/year profit.

As C-Corp:
• Corp pays 21% federal tax: $25,200
• You pay dividend tax (20% + 3.8% NIIT) on $94,800: $22,574
• Total tax: $47,774

As S-Corp:
• Pay yourself $70K W-2 salary (FICA: $10,710)
• Distribute $50K (no additional payroll tax)
• Personal income tax on $120K (~24% bracket): $28,800
• Total tax: $39,510

Savings: $8,264/year!
📍
Nevada Advantage for S-Corps: Because Nevada has no state income tax, your S-corp income isn't taxed at the state level. If you live in California or another high-tax state, you'll still owe state taxes on your share of S-corp income to your home state.

Bottom line: Nevada S-corp election only saves you federal taxes (vs C-corp). State tax depends on where you personally live.

Nevada Close Corporation

NRS Chapter 78A allows tightly-held corporations to eliminate boards and run by shareholder agreement. Perfect for family businesses.

🔒 What Is a Nevada Close Corporation?

Definition (NRS 78A): A close corporation is a Nevada corporation (formed under NRS 78) that elects close corporation status by amending its Articles of Incorporation.

Key Features:

  • Limited number of shareholders (typically ≤30)
  • Strict restrictions on stock transfers
  • Can eliminate board of directors and manage by shareholder agreement (NRS 78A.150)
  • Shareholders can contract to vote shares as a block
  • Cumulative voting for directors (if board exists)
💡
Close Corporation vs LLC: Both allow flexible management and restricted ownership. Close corp keeps traditional corporate structure (stock certificates, formalities), while LLC is more informal. Choose close corp if you want corporate culture or plan to elect S-status.

📋 How to Form a Nevada Close Corporation

1 Form Regular NRS 78 Corporation First

Follow standard C-corporation formation steps (see C-Corp tab). File Articles of Incorporation under NRS 78.

2 Elect Close Corporation Status

Add to Articles of Incorporation (NRS 78A.020):

  • Statement that corporation is a "close corporation" or "closed corporation"
  • Can be included in initial Articles or added via certificate of amendment
  • Must be included in stock certificates: "This corporation is a close corporation"
3 Add Transfer Restrictions

Include in Articles or Bylaws (NRS 78A.040):

  • Right of first refusal for existing shareholders
  • Consent requirement for transfers
  • Buy-sell provisions upon death/disability
  • Prohibition on transfers to non-family members

Note restrictions on stock certificates (required for enforceability).

4 Eliminate Board (Optional)

Shareholder Agreement (NRS 78A.150):

  • Shareholders can agree to eliminate board of directors
  • Shareholders exercise powers normally held by board
  • Agreement must be in Articles, bylaws, or separate written agreement
  • All shareholders must approve

💼 Close Corporation Advantages

Shareholder Management

Eliminate board entirely. Shareholders act directly on major decisions (hiring, contracts, banking, etc.). No annual meetings or board formalities required.

Transfer Restrictions

Keep ownership within family or founding group. Automatic buyout provisions on death, divorce, bankruptcy. Prevents unwanted outsiders from becoming shareholders.

Flexibility

Customize voting and management arrangements. Shareholders can vote as a block, cumulative voting for directors (if board exists), weighted voting, etc.

Corporate Structure

Maintains traditional corporate benefits: stock certificates, S-corp election, clear ownership transfers (unlike LLC membership interests).

⚠️
Compliance Requirement: Close corporations must still file Annual List of Officers/Directors and State Business License with Nevada SOS. Even if you eliminate the board, you must list the shareholders exercising board powers as "directors" on the annual list.

🎯 When to Use Close Corporation vs LLC

Factor Close Corporation LLC
Management Shareholder-managed (can eliminate board) Member-managed or manager-managed
Ownership Units Stock certificates (familiar, transferable) Membership interests (less familiar, harder to value/transfer)
S-Corp Election ✓ Available ✓ Available (but as LLC taxed as S-corp)
Formalities More formal (Articles, bylaws, stock ledger, annual list) Less formal (Articles, operating agreement)
Annual Cost (NV) $650 (Annual List $150 + License $500) $350 (Annual List $150 + License $200)
Best For Family businesses that want corporate structure + flexibility Small businesses wanting simplicity and low cost

Nevada Benefit Corporation

NRS Chapter 78B allows corporations to pursue public benefit alongside profit. Perfect for mission-driven businesses and social enterprises.

🌱 What Is a Benefit Corporation?

Definition (NRS 78B.010): A benefit corporation is a for-profit corporation that has elected to create general public benefit and may identify specific public benefits in its charter.

Can Apply To:

  • Regular corporations (NRS 78)
  • Close corporations (NRS 78A)
  • Professional corporations (NRS 89)
  • Cooperative corporations (NRS 81)
💡
Benefit Corp vs Nonprofit vs B-Corp Certification:

• Benefit Corporation (NRS 78B): Legal entity type, for-profit, can distribute dividends, must create public benefit.
• Nonprofit (NRS 82): Can't distribute profits, eligible for 501(c)(3), tax-exempt.
• B-Corp Certification: Third-party certification by B Lab (not a legal entity type). Any corp can get certified.

📋 How to Form a Nevada Benefit Corporation

1 Form Regular Corporation (or Convert Existing)

File Articles of Incorporation under NRS 78 (or 78A, 89, 81). Or amend existing corporation's Articles to elect benefit status.

2 Include Benefit Corporation Language in Articles

Required Provisions (NRS 78B.030-78B.040):

  • "This corporation is a benefit corporation" (exact language)
  • Purpose: State that purpose includes creating general public benefit
  • Specific public benefit (optional but recommended): Examples:
    • Providing low-income communities with beneficial products or services
    • Promoting economic opportunity beyond creation of jobs
    • Preserving the environment
    • Improving human health
    • Promoting arts, sciences, or knowledge
    • Increasing flow of capital to benefit corporations or similar entities
3 Prepare to File Annual Benefit Report

Requirement (NRS 78B.200):

  • Must prepare annual benefit report for shareholders
  • Report must describe how corporation pursued general public benefit and any specific public benefits
  • Must assess performance against third-party standard
  • Post report on public website (if you have one) or provide to shareholders and Secretary of State on request

Third-Party Standards: B Impact Assessment (B Lab), GRI Standards, GIIRS, etc.

⚖️ Director/Officer Duties in Benefit Corporations

Enhanced Stakeholder Consideration (NRS 78B.150-78B.160):

Directors and officers must consider effects of actions on:

  • Shareholders
  • Employees and workforce
  • Customers and suppliers
  • Community and society
  • Local and global environment
  • Short-term and long-term interests of the corporation
💡
Legal Protection: Directors are not personally liable for failure to create public benefit, as long as they consider stakeholder interests and make decisions in good faith. NRS 78B.160 shields directors from benefit enforcement suits.

🎯 Why Choose Benefit Corporation Status?

✅ Advantages

  • Legal protection for mission: Directors can prioritize public benefit over short-term profit
  • Attract impact investors: Signals commitment to social/environmental mission
  • Brand differentiation: "Benefit corporation" designation builds trust
  • Employee recruitment: Millennials/Gen Z prefer mission-driven employers
  • Customer loyalty: Consumers increasingly support values-aligned brands

⚠️ Considerations

  • Annual report requirement: Must prepare benefit report (adds compliance burden)
  • No tax benefits: Benefit corps are taxed same as regular C-corps
  • VC concerns: Some investors worry benefit status conflicts with profit maximization
  • Accountability: Shareholders can sue if directors ignore public benefit duties
📍
Converting to Benefit Corporation: Existing Nevada corporations can convert by amending Articles to add benefit corporation language. Requires shareholder approval per NRS 78.390 (majority or supermajority depending on bylaws/Articles). File certificate of amendment with SOS.

Nevada Nonprofit Corporation

Form a Nevada nonprofit corporation under NRS 82 for charitable, educational, religious, or mutual benefit purposes. Path to 501(c)(3) tax exemption.

❤️ Types of Nevada Nonprofit Corporations

Nonprofit Type Purpose 501(c) Eligibility Examples
Public Benefit Charitable, educational, religious, scientific purposes benefiting public ✓ 501(c)(3) Charities, schools, churches, hospitals, homeless shelters
Mutual Benefit Benefit members (not public) 501(c)(4), (6), (7) Homeowner associations, trade associations, social clubs
Religious Religious worship, education, ministry ✓ 501(c)(3) Churches, mosques, synagogues, religious schools

📋 How to Form a Nevada Nonprofit Corporation

1 Choose a Corporate Name

Requirements (NRS 82.086):

  • Must be distinguishable from existing entities
  • Should avoid implying for-profit purpose
  • Common endings: Foundation, Charity, Association, Society, Institute
2 Prepare Articles of Incorporation

Required Provisions (NRS 82.081-82.086):

  • Corporate name
  • Registered agent name and address
  • Purpose clause: Must state nonprofit purpose (charitable, educational, religious, etc.)
  • Non-distribution constraint: "No part of net earnings shall inure to benefit of private individual"
  • Dissolution clause: Assets distributed to another 501(c)(3) upon dissolution (required for federal tax exemption)
  • Name and address of incorporator

IRS Language (for 501(c)(3)): Include IRS-required charitable purpose and dissolution language from IRS Sample Articles.

3 File Articles + Initial List + Business License

Filing Fees:

  • Articles of Incorporation (nonprofit): $50
  • Initial List of Officers/Directors: $25
  • State Business License (nonprofit): $200
  • Total formation: $275
4 Adopt Bylaws and Hold Organizational Meeting

Nonprofit Bylaws Must Cover:

  • Board composition (typically 3+ directors)
  • Meeting procedures, quorum, voting
  • Officer roles and election
  • Conflicts of interest policy (required by IRS)
  • Amendment procedures
5 Apply for Federal Tax Exemption (If Desired)

IRS Form 1023 or 1023-EZ (for 501(c)(3)):

  • Form 1023-EZ: Simplified application for small nonprofits (gross receipts ≤$50K). Fee: $275. Faster processing (2-4 weeks).
  • Form 1023: Full application for larger nonprofits. Fee: $600. Takes 3-6 months (or longer).
  • Must apply within 27 months of formation for retroactive exemption
6 Register for Charitable Solicitation (If Needed)

Nevada Charitable Solicitation (NRS 82A):

  • If soliciting donations from Nevada public, register with NV Secretary of State
  • File initial registration + annual renewals
  • Exemptions for religious organizations and small charities (<$25K revenue)

💰 Nonprofit Formation & Annual Costs

Articles of Incorporation (nonprofit) $50
Initial List of Officers/Directors $25
State Business License $200
Registered Agent (annual) $50-300
IRS Form 1023-EZ (if seeking 501(c)(3)) $275
Total Formation Cost $600 - $850

Annual Renewal:

Annual List of Officers/Directors $25
State Business License Renewal $200
Registered Agent $50-300
IRS Form 990 (annual return, if 501(c)(3)) $0 (self-file) or $500-2K (CPA)
Total Annual Cost $275 - $2,525/year
💡
Nevada Nonprofit Advantages:

• No state income tax: Nevada nonprofits don't pay state corporate tax (because NV has none).
• Lower annual fees: Nonprofit Business License is $200 vs $500 for for-profit corps.
• Annual List only $25: Cheapest in the nation for nonprofits.

Nevada Professional Corporation (PC)

NRS Chapter 89 governs professional corporations for licensed professionals: doctors, lawyers, CPAs, architects, and more.

⚠️
Critical Limitation: A professional corporation does NOT shield you from personal malpractice liability. You are still personally liable for your own professional negligence. PC only protects you from liability for other shareholders' malpractice and corporate debts.

⚕️ Who Must Form a Professional Corporation?

Licensed Professions (NRS 89.020):

Medical

  • • Physicians (MDs, DOs)
  • • Dentists
  • • Optometrists
  • • Veterinarians
  • • Podiatrists
  • • Chiropractors

Legal & Accounting

  • • Attorneys
  • • CPAs
  • • Public Accountants

Other Professions

  • • Architects
  • • Engineers
  • • Land Surveyors
  • • Psychologists
💡
PC vs PLLC: Nevada also allows Professional LLCs (PLLCs) under NRS 89. Both are governed by same statute. PLLC is simpler (no stock, less formality). PC is better if you want traditional corporate structure or S-corp election.

📋 How to Form a Nevada Professional Corporation

1 Verify All Shareholders Are Licensed

Ownership Restrictions (NRS 89.040):

  • All shareholders must be licensed in the same profession (or related profession if permitted by licensing board)
  • Cannot have non-professional shareholders
  • If shareholder loses license or dies, shares must be transferred or redeemed within reasonable time (typically 6-12 months per NRS 89.240)
2 File Articles of Incorporation for Professional Corporation

Required Content (NRS 89.050):

  • Corporate name (must include "Professional Corporation," "P.C.," "Prof. Corp.," or similar)
  • Statement of professional service: "This corporation is organized to provide [medical/legal/accounting/etc.] services"
  • Registered agent
  • Number of shares
  • Incorporator name/address

Filing Fee: Same as regular corporation ($75 for ≤75K shares authorized).

3 Obtain Certificate from Licensing Board

Some professions require certificate of good standing or approval from Nevada licensing board before or after formation. Check with your board (State Bar of Nevada, Board of Medical Examiners, Board of Accountancy, etc.).

4 File Initial List + State Business License

Same as regular corporation: Initial List ($150) + Business License ($500).

5 Maintain Professional Liability Insurance

Nevada law doesn't mandate malpractice insurance for PCs, but your licensing board might. Even if not required, get it — PC does NOT shield you from malpractice claims.

🎯 PC vs PLLC vs Regular LLC

Factor Professional Corporation (PC) Professional LLC (PLLC) Regular LLC
Statute NRS 89 (corp) NRS 89 (LLC) NRS 86
Ownership Restriction Licensed professionals only Licensed professionals only Anyone
Structure Stock, board, officers Membership interests, flexible management Membership interests, flexible
Annual Cost (NV) $650 $350 $350
S-Corp Election ✓ Yes ✓ Yes (as LLC taxed as S-corp) ✓ Yes
Malpractice Liability Personal liability (PC doesn't shield) Personal liability (PLLC doesn't shield) Personal liability (LLC doesn't shield)
Best For Professionals who want corporate structure Professionals who want simplicity Non-licensed businesses
💡
Recommendation for Most Professionals: Use PLLC (Professional LLC) instead of PC. Same ownership restrictions, same malpractice liability, but simpler structure and $300/year cheaper in Nevada.

Exception: If you're already a corporation or strongly prefer corporate structure (stock certificates, board meetings), stick with PC.

Nevada Corporate Governance & Liability

Business judgment rule, director/officer liability protection, indemnification, and anti-takeover provisions. Why Nevada rivals Delaware.

⚖️ Business Judgment Rule (NRS 78.138)

Nevada's Statutory Business Judgment Rule: NRS 78.138 codifies a strong presumption that directors and officers act in good faith, on an informed basis, and in the best interests of the corporation.

📚
NRS 78.138 (simplified): A director or officer is not individually liable for damages unless the director/officer:

(a) Acted in bad faith;
(b) Failed to act on an informed basis; or
(c) Had a financial interest in the decision adverse to the corporation.

This is stronger protection than Delaware's common-law business judgment rule because it's statutory (not just case law).

Nevada Advantage

Statutory protection: Codified in NRS 78.138. Can't be eroded by changing case law. Clear and predictable.

Delaware Approach

Common-law protection: Business judgment rule comes from court decisions (Aronson, Unocal, etc.). Subject to judicial reinterpretation.

🛡️ Director/Officer Indemnification (NRS 78.7502, 78.751, 78.752)

Nevada provides broad indemnification rights for directors, officers, employees, and agents.

Statute Coverage Key Provisions
NRS 78.7502 Discretionary indemnification Corporation may indemnify directors/officers for expenses, judgments, fines if they acted in good faith and in corporation's best interests
NRS 78.751 Mandatory indemnification (successful defense) Corporation must indemnify if director/officer wholly successful in defense
NRS 78.752 D&O Insurance Corporation may purchase insurance covering directors/officers, even for conduct not otherwise indemnifiable
💼
Best Practice: Include indemnification provisions in Articles of Incorporation (not just bylaws). This creates a contract right that can't be easily removed. Also purchase D&O insurance ($1M-10M+ coverage depending on company size/risk).

🔒 Anti-Takeover Provisions

Nevada has two major anti-takeover statutes (similar to Delaware):

Control-Share Statute (NRS 78.378-78.3793)

What it does: Restricts voting rights of any shareholder who acquires 20%, 33%, or 50%+ of voting stock unless other shareholders approve in a special vote.

Applies to: "Issuing corporations" (Nevada corps with 200+ shareholders, NV as principal place of business or substantial assets).

Opt-out: Can opt out via Articles or bylaws.

Business-Combination Statute (NRS 78.411-78.444)

What it does: Restricts mergers/asset sales with any "interested stockholder" (10%+ owner) for 2 years after crossing threshold, unless board approved in advance or fair-price requirements met.

Similar to: Delaware's Section 203.

Opt-out: Can opt out in Articles (before becoming "resident domestic corporation").

💡
For Startups/VCs: Opt OUT of both statutes in your Articles. VCs want flexibility for exits and recaps. Including opt-out language shows you're sophisticated and VC-friendly.

📊 Nevada vs Delaware: Governance Comparison

Feature Nevada Delaware
Business Judgment Rule Statutory (NRS 78.138) – strong, predictable Common law – extensive case law, evolving
Director Liability Limitation Automatically applies (78.138) Must include 102(b)(7) clause in charter
Indemnification Broad (78.7502, 78.751, 78.752) Broad (DGCL 145)
Anti-Takeover Statutes Control-share (78.378) + Business-combination (78.411) Section 203 (business combination)
Case Law Depth Limited (newer statute) ✓ Extensive (Court of Chancery 200+ years)
Court System Standard district courts ✓ Specialized Court of Chancery
Annual Fees $650 (no franchise tax) $450 + franchise tax ($400-180K+)
📍
Verdict: Nevada offers similar governance flexibility and director protection as Delaware, with stronger statutory liability limits and no franchise tax. Delaware wins on case law depth and VC familiarity. For most businesses (non-VC, non-public), Nevada is better value.

Nevada Corporate Taxes & Fees

No state income tax, no franchise tax. But you still pay federal taxes, state business license, and annual list fees.

💰 What Nevada Corporations DO Pay

State Business License (NRS 76)

Corporations: $500/year (due in anniversary month)

Nonprofits: $200/year

This is higher than LLCs ($200/year) – one reason many small businesses choose LLC over corp in Nevada.

Annual List of Officers/Directors

Corporations: $150/year

Nonprofits: $25/year

Due same time as Business License (anniversary month).

Commerce Tax (NRS 363C)

Triggered at: $4,000,000+ Nevada gross revenue

Rate: 0.051% - 0.331% depending on industry

Most small/medium businesses exempt. Only kicks in for large Nevada operations.

Federal Corporate Income Tax

C-Corps: 21% flat rate (federal)

S-Corps: Pass-through (shareholders pay personal income tax)

Nevada can't eliminate federal taxes – only state taxes.

🚫 What Nevada Corporations DON'T Pay

Tax Nevada Delaware California
Corporate Income Tax ✓ $0 ✓ $0 ✗ 8.84%
Franchise Tax ✓ $0 ✗ $450 + $400-180K based on shares ✗ $800 min
Personal Income Tax (for S-corps/shareholders) ✓ 0% ✗ Up to 6.6% ✗ Up to 13.3%
Capital Gains Tax ✓ 0% ✗ Up to 6.6% ✗ Up to 13.3%

🧮 Total Cost Comparison: Nevada vs Delaware vs California

Scenario: Small C-corp, 1,000,000 shares authorized, minimal activity.

Cost Item Nevada Delaware California
Formation (Articles) $75 $89 $100
Initial List $150 N/A N/A (Statement of Information $25 first time)
State Business License $500 N/A N/A
Year 1 Total $725 $89 $125
Annual Report/List $150 $50 $25 (Statement of Information, biennial)
Business License $500 N/A N/A
Franchise Tax ✓ $0 $450 + $5,000 (1M shares = ~$5,000 tax) $800 minimum
Annual Total $650 ~$5,500 $800-825
💡
Nevada Saves You Money If:
• You have significant authorized shares (Delaware franchise tax scales with shares/assets)
• You're an S-corp and live in Nevada (no state income tax on pass-through income)
• You're a C-corp and reinvest profits (no state corporate income tax)

Nevada Costs More If:
• You're a very small corp with minimal shares (Delaware/CA cheaper Year 1)
• But Nevada is still cheaper long-term due to no franchise tax

🌍 Corporate Transparency Act (CTA) Update – March 2025

🆕
Major CTA Update (Effective March 2025):

FinCEN issued an interim final rule that removes BOI (Beneficial Ownership Information) reporting requirements for U.S. domestic companies.

What this means for Nevada corporations:
• Nevada corporations are exempt from CTA BOI reporting (as of March 2025)
• Only foreign reporting companies (non-U.S. entities registering in U.S.) must file BOI
• Previous BOI deadlines/requirements for domestic entities are suspended

Source: FinCEN BOI Page (updated March 2025)

Professional Nevada Corporation Formation Services

Get your Nevada corporation formed correctly. Custom charters, governance documents, and ongoing compliance support.

⚖️ Formation Packages

Standard C-Corporation

$1,500 + State Fees

Includes:

  • Articles of Incorporation (custom drafted)
  • Bylaws
  • Organizational resolutions
  • Stock certificates
  • Stock ledger
  • IRS Form SS-4 (EIN)
  • Filing with Nevada SOS

Close/Benefit/Nonprofit Corporation

$2,500-4,000 + State Fees

Includes everything in Standard, plus:

  • Custom NRS 78A/78B/82 provisions
  • Shareholder agreements (close corp)
  • Benefit report template (benefit corp)
  • IRS Form 1023/1023-EZ (nonprofit)

S-Corp Election Package

+$500

Add to any package:

  • IRS Form 2553 preparation
  • Shareholder consent forms
  • S-corp compliance checklist
  • Reasonable salary guidance

Annual Compliance Service

$500/year

We handle:

  • Annual List filing
  • Business License renewal
  • Deadline reminders
  • Registered agent service
📞
Consultation: Not sure which Nevada entity type you need? Schedule a consultation to discuss your business, goals, and optimal structure.

Email: owner@terms.law
Attorney: Sergei Tokmakov, Esq.