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Nevada
Corporations
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Step FourThe Really Tricky PartControl Without Ownership Looking, as we have been, from the INSIDE of things, is there any doubt who is in CONTROL of the corporation? From the OUTSIDE, of course, its a completely different matter. All that anyone on the outside can see is whatever is a matter of public recordthe list of officers filed with the Secretary of State, which shows only a nominee. Anyone on the outside cannot know anything at all about ownership unless you tell them. But, it might be argued, the corporation has to FUNCTION! What happens when you go to open a bank account or apply for a business license, or do any number of other things that require the signature of a corporate officer or disclosure of the corporations principals? Yes, this can get a little tricky in some cases. Lets look at two of the most awkward situations and see if there are some solutions to the perceived problems. Business Licensing The application for a business license in Las Vegas entails filling out the form, Nevada Business Registration as well as the City of Las Vegas Supplement. Section 10 of the Nevada Business Registration asks for the Names of owner(s), Partners, Corporate Officers, Etc. and provides spaces for name, title, percent owned, residence address, residence phone, SS# and date of birth. If Individual Ownership, the form declares, list only one Owner. Hmmmsticky wicket! Or so it seems, on the face of things. What happens if you dont have a business license? Do you really need a business license? What might ever trigger an inspection of your business to determine if it is licensed? How many of the over 300,000 corporations registered in the State of Nevada have or do not have business licenses? Why is there such a thing as business licensing? Lets obtain the answer to the last question, directly from the City of Las Vegas web-site regarding licensing: Why does the City license businesses? Businesses are licensed to insure that their location is properly zoned for the activity to be conducted, that the building the business will be operating in meets fire safety code standards, that all state and local codes are adhered to insuring the safety and well-being of our citizens, and that privilege businesses are properly regulated. If the activity of the business requires a physical presence in the form of office space not otherwise licensed (say, as in the case of a virtual office), then issues of zoning, fire safety and the safety of Nevadas citizens are involved. Otherwise, how is there ever going to be any connection to these stated reasons for requiring licensing? (This is very reminiscent of NRS 78.105, which requires that a corporation maintain certain records at its registered officefor inspection by the stockholders. If inspection by the stockholders is not an issuewhy maintain such records?) Lets say that you are occupying physical space in the conduct of your business and you DO require a business license. What then? Remember that section 10 of the Nevada Business Registration form adds, If Individual Ownership, list only one Owner. What if the owner of ABC happened to be a corporation named XYZ? It seems it would be entirely possible to submit that ABCs individual owner is XYZ. XYZ could provide its Employer Identification Number in the space where SSN would otherwise be required. Keep in mind that ownership of a corporation can be a very transitory thing. It might be one thing at the moment the Nevada Business Registration form is signed and it might be something else altogether just a few hours later. As for signing the application, perhaps a minor officer of the corporation, a vice president or an assistant secretary could do that. Certainly, one would hardly expect the CEOs of IBM or Exxon to be involved with such an application on behalf of their corporations! All that is necessary to maintain corporate privacy in most cases is a little careful THOUGHT. Think it through and you will find your answers. And if you need a little help, give us a call and maybe we can find a solution for your particular situation by thinking it through together. Banking Many people seem to think that setting up a corporate bank account eliminates the possibility of maintaining corporate privacy. This is not true. Signing authority over a corporations bank account does not constitute either ownership or control of the corporation. It is true that the authorized signer(s) are linked to the corporationbut linked in what way? Most banks require a corporate resolution authorizing the signer to open and maintain the bank account. The signer, however, is not required to be an owner or Director. In fact, many banks in Nevada will accept a corporate resolution signed (often with a facsimile signature) by a known nominee, leaving the real Director(s) out of the picture altogether. Thus, all the banking resolution reveals is the identity of the authorized signer , who may be a secondary officer of the corporationa vice president or an assistant treasurer. This person could be the corporate bookkeeperor just someone authorized to sign checks. From the corporations perspective, this party must be trustworthy but need not know anything much about the corporations activities. They might sign so many checks that they use a signature stamp to make quick work of it. For corporations, there is absolutely nothing unusual about the use of a facsimile of a signature on company checks. Whether electronically embedded in the laser printing of checks or affixed with a rubber stamp, the bank does not generally question those signatures! If you do not know someone who would allow you to stamp their signature on the companys checks like this, contact us and we can discuss nominee check signing, for a nominal fee. Many banks offer corporate debit cards, which are in both appearance and day-to-day usage, very similar to credit cards. Such a card can be used to book airline hotel reservations, or to obtain cash from ATMs. The use of such a card automatically debits the corporate checking account, so there are no credit-card-type fees. Where arrangements have been made for nominee check signing, it may be possible to have such a corporate debit card issued in the name of the nominee signerbut usable in many ways by the corporations other officers. Please understand that such a card is probably NOT usable for direct, face-to-face payments at retail stores, where identification for the individual named on the card will often be demanded. Other Situations In most cases, the signature of a corporate vice president will prove sufficient to satisfy the curiosity of the outside world. A corporation may, of course, have any number of vice presidents, whose term of office might last for anywhere from a few hours to indefinitely. If you need help thinking through the specifics of a troublesome situation, please contact us . |
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