Nevada Corporation Act
Each state has separate laws governing how corporations are formed and can legally be operated. Nevada provides unique situations in its corporate law, known as articles of incorporation. The state views company directors as those elected by shareholders and placed in charge of company operations. Company officers are responsible for day-to-day operation of the business and often include a president, vice-president, treasurer, and other official positions.
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Standard of Care
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The majority of states have an objective standard of care placed on company directors, meaning the validity of their actions are based on what similar officials would do in like situations. Nevada law provides a subjective standard, which places less emphasis on director's actions. The objective standard only factors in a company director's state of mind when determining accountability for their actions.
Liability
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Nevada law virtually eliminates liability for corporate directors and officers. This gives company officials the freedom to act without legal burdens, provided those actions are not criminal or fraudulent in nature.
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Corporate Taxes
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The state does not have a franchise tax and places no other taxation on a corporation. Furthermore, a company issuing stock is immune from paying any state taxes on the shares it distributes.
Number of Officers
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Small business owners can benefit from Nevada's law governing the number of directors and officers required to operate a corporation. While other states require a host of people to occupy multiple corporate positions, Nevada law allows one person to act as officer and director of a corporation.
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References
Resources
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