QUATLOOS BASHES NEVADA
CORPORATIONS
The following article by Quatloos <www.quatloos.com> demonstrates an absolute ignorance of the fact that Nevada’s development of special statutory provisions relating to privacy of ownership and control of Nevada corporations IS NO ACCIDENT.
WE didn’t put these laws in place; someone at a much higher level in the pyramid did and there is no doubt there was a purpose for having done so.
· It is a FACT that Nevada does not require disclosure of a corporation’s owners on any public records.
· It is a FACT that there is no statutory requirement to issue stock in Nevada.
· It is a FACT that there is no statutory requirement to hold meetings of the stockholders.
· It is a FACT that Nevada does not prohibit the use of bearer shares.
· It is a FACT that Nevada has made a provision in its laws for “phantom” stock certificates, inventing a new word for the English language in the process: “uncertificated” shares.
· It is a FACT that anyone from anywhere, be it another state or another country altogether, can establish a private corporation in Nevada and enjoy these benefits.
With the foregoing in mind, let’s examine the Quatloos piece bashing Nevada corporations. NOTICE, PLEASE, HOW QUATLOOS AVOIDS DISCUSSION OF THE FACTS.
Quatloos! > Investment Fraud > Financial Planning > Nevada Corporations
[QUOTING:]
Nevada Corporations
Why go offshore when a Nevada corporation offers all, if not more, of the protections of an offshore corporation? After all, you get nominees, you get secrecy, you get bearer shares, you get—well, you get what you usually get in Nevada, which is something which feels really good for a couple of days but you wonder why in the world you did it when you get home.
[At Budget Corporate Renewals, we work hard to ensure this does not happen. We make a wealth of information available on our website and are always available for consultation regarding your particular circumstances. Note, please, the lack of substance in this ridiculous assault to this point.]
There are many groups which harp Nevada corporations as the end-all, and there are even a few practitioners who rely on Nevada corporations. These days, its [sic: it’s] hard to look in the newspapers and not see some fringe group or sleazy attorneys hawking Nevada corporations as a “judgment proofing” structure.
[That phrase is not used anywhere else on this website, other than in this Quatloos article. There is no such thing as “judgment proofing”, so Quatloos sets up this straw man argument just to benefit from knocking it down. When you handle your financial affairs privately, there is no need for such a concept. Note the smear campaign in the use of the words “fringe” and “sleazy”. The only reason Nevada corporations and privacy are “fringe” is that the people who established this haven for their own greedy purposes do not want it made “mainstream”.]
Unfortunately, the reality is that Nevada corporations suffer from the same basic problems as the Alaska Trust. In summary, these are as follows:
Federal judges don’t give a flip about Nevada law, so don’t expect these things to give you any protection if you are sued in federal court. (Don’t believe us? Then just tell the federal judge that you are refusing to answer questions because of the Nevada secrecy laws. Oh, and bring your toothbrush and favorite pillow to that hearing.)
[Federal law applies equally well to private Nevada corporations—and that is a great BENEFIT. A Federal judge will honor and respect any corporation that handles corporate formalities properly—and we can help you do that at very minimal expense. The FACT is that privacy can be very helpful, ESPECIALLY when it comes to litigation. IF YOU DO NOT OWN THE CORPORATION, IT IS NOT YOU AND YOU ARE NOT IT. THAT IS THE LAW.]
The U.S. Constitution requires Nevada courts to recognize judgments of other states. So, if you get sued in another state, Nevada will still have to recognize the judgment irrespective of Nevada corporation law. But this doesn’t mean that other states have to respect Nevada corporation law. If a Nevada corporation gets sued in Texas, for instance, Texas procedure will apply and not Nevada procedure.
[If a Nevada corporation stays at home in Nevada, the only proper venue for a lawsuit is in Nevada. When you set it up and run it properly, a Nevada corporation continuously enjoys the benefits of Nevada’s protective statutes. It doesn’t matter where YOU are. YOU may be sued where you are but the corporation may not be sued outside of Nevada if it has not done business outside of Nevada. Quatloos misses the very important point that YOU ARE NOT THE CORPORATION AND IT IS NOT YOU.]
Still in the U.S.
of A.
Assets held inside a Nevada corporation are subject to seizure, attachment and/or garnishment in the U.S.
[IF someone prevails against a Nevada corporation IN NEVADA, certainly this is true. But if you live in, say, California and are sued in California—what business does anyone have suing a private Nevada corporation in which you have no demonstrable interest?]
About the only real reason that you would want to use a Nevada corporation is to try to avoid state tax law. California residents attempt this a lot; unfortunately, California isn’t so big on it and regularly audits businesses which are doing business in Nevada.
[Properly structured, a private Nevada corporation stays at home and conducts business from Nevada with no nexus (connection) to a foreign jurisdiction. It has no employees there and all transactions are finalized IN NEVADA. If a Nevada corporation has no nexus in California and does no business there, sorry Quatloos, California tax authorities have no case.]
About the only people that the “extraordinary” Nevada statutes benefit are Nevada residents who have formed Nevada corporations who are being sued on a Nevada cause of action in a Nevada state court. Everybody else is S.O.L. if they expect any real benefits above those of any other state.
[Perhaps Quatloos should try
explaining that to the many top-level politicians, movie stars and entertainers
who count on Nevada’s PRIVACY to keep their business to themselves.]
The Nevada corporation statute IS somewhat more flexible than MOST other corporation statutes, and comparable to Delaware’s. For the real scoop on the advantages of Nevada corporations, see http://www.oshins.com
The IRS reads the newspaper ads like everyone else, and know that many people are trying to use Nevada corporations to avoid federal income tax—and not surprisingly, Nevada has a higher audit rate than most states.
[FACT: The audit
profile for corporations with less than $250,000 on the balance sheet was
something on the order of .25% last year: meaning, the IRS gets around to
auditing such corporations about every 400 years on average. This is a significantly lower audit risk
than the average individual with a similar asset base. ALSO:
When properly structured, there is absolutely nothing to fear from an
IRS audit because everything is done entirely according to the applicable laws
and regulations.]
Avoid Nevada corporations, and planners who use Nevada corporations as any regular planning technique. The protection you receive from Nevada corporations will only rarely be worth the incorporation cost.
[END QUOTING. Quatloos
is certainly entitled to an opinion.
Meanwhile, SAVVY, business-smart individuals will continue to
incorporate in Nevada in record numbers to take advantage of the benefits
established here by the elite controllers for their own purposes. Or perhaps the leading politicians and
entertainers will take Quatloos to heart and uproot their Nevada corporation
structures—in favor of… what, exactly?
Sorry, Quatloos, your smear campaign is backfiring.]