Video Transcript - Nevada Corporations are Scams unless you live in Nevada
Today, I take on one of my favorite scams and one of the legitimate asset protection issues that you're all going to confront. If you do any looking on the internet for asset protection, you're going to come across Nevada corporations.
I did a search just a second ago for Nevada corporations and asset protection and look 172,000 results. Everybody and their mother is a Nevada expert. Everybody and their mother who doesn’t have any skill and doesn’t have any training and wants to make some money in the asset protection world consider promoting asset protection via Nevada corporations.
These all got started by Bill Reed and his asset protection group, a total bunch of crooked scammers. What they did is they advertised that they could form an entity for you in Nevada, that Nevada didn’t have any taxes so they got lots of idiots and lots of non-idiots to buy into their rules that you could form an entity in Nevada and eliminate State taxes.
For instance, you could form a doughnut shop in California or New York incorporated in Nevada and eliminate Nevada – eliminate California or New York State taxes.
Why Nevada Corporations are bad
It's a bunch of bull. It's not true. It's tax fraud per se. They also advertised that you would have bearer shares. That’s bull.
Nevada doesn’t allow somebody else to own your shares on your behalf and be treated as the real owner. What they really ask you to do is to trust some basically nearly insolvent scammer to hold a title to the stock in your corporation or your membership interest in LLC or partnerships and basically you trusted them to not steal your money.
The crooks, Bill Reed and his cadre of people, were eventually put away. They spent good time in jail and they're still out promoting that though. They had great materials. They promoted it to everybody. The bottomline is Nevada is not a good place for you to do asset protection unless and until you actually live in Nevada.
Now, I’m going to show you a few of the important rules and by the way, we will go into this in detail in the more meaty portion. This is just the overview. This is the simple rules. Nevada corporations, like I said they stink as asset protection vehicles.
Stay away from them unless you live and work or are involved with Nevada. Then they're perfectly fine.
There's nothing wrong with being there. I do know from several conversations with the Office of the U.S. Attorney in the second district of New York, when they consult with me on things, they did tell me they were looking at Nevada filings a lot more seriously than other places. You know why? Because all the tax or a lot of the tax protestors and the tax cheaters are going there thinking they can save taxes. Well, don’t. Don’t get in the middle of some petty illegal scam. Don’t get earmarked as a crooked person. It’ll just come back and bite you. Stay away from Nevada unless there's a reason. They're marketed as tax saving vehicles. They're not. They create a myriad of gift tax problems, a myriad of income tax problems.
Who’s going to pay the tax, your bearer share expert that’s holding your title? Well, they don’t have money to pay your tax. You're probably going to pay the tax but you're going to say that they own it. Give me a break. Just walk away. If something is too good to be true, just stay away.
What's a better alternative? That’s important. It always makes sense to use entities like LLCs and partnerships although you're soon going to find that they're pretty poor asset protection entities in and of themselves and standing alone. I use them all the time and love them.
You'll learn why but it's a much better alternative to use an entity in a clean, safe jurisdiction such as Delaware or at the State that you live.
Much better alternative and if you use the State where you live, you can be the agent for service or process. Save yourself 150, 200 bucks a year.
I also like Delaware in certain States because they actually do allow you to form an anonymous LLC, a truly anonymous LLC, not that great for asset protection but it's a start. Just take this short, short video as a base point to start. When you see those 172,000 ads for Nevada bearer share or asset protection tax savings, just walk away. Write the guys off as scammers unless you live in the State of Nevada.