Advantage: Nevada
For years, our company has put on a series of Corporate Boot Camp Seminars in Reno and Las Vegas to teach people about the basic essentials of forming and maintaining their new business entity, and becoming successful. In our Boot Camp, I make a presentation about Nevada's past, present and future as an incorporation center that attracts tens of thousands of new corporate and LLC filings every year from people living outside of Nevada. I am frequently asked to compare the benefits of incorporating in Nevada to that of incorporating in Delaware, which has a long-standing reputation as a corporate haven.
My answer to those questions is lengthy and technical. But to boil it down to its simplest form, Delaware law is designed for large, publicly-traded companies and Nevada law is designed for privately-held companies. Delaware protects stockholders by holding officers and directors responsible, while Nevada protects officers and directors - who are frequently also the owners.
I bring this up to provide some perspective to some interesting statistics that I stumbled upon. The Ewing Marion Kaufman Foundation released a study that ranks all 50 states for their level of entrepreneurial activity. It is no surprise that Nevada is ranked very high.
But guess which state is ranked dead last. New York? California? Massachusetts? No. Last place belongs to DELAWARE! While Delaware enjoys this great reputation for being a corporate haven, the truth is that for all the corporate filings it generates, it is a terrible environment for nurturing entrepreneurism. Its corporate laws just are not designed for small business.
ADVANTAGE: NEVADA
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