Wealthy & Wise: Using a Nevada LLC in Your Home State

About the Video

Using a Nevada LLC in your home state can be of significant importance for various reasons. Nevada is renowned for its business-friendly environment, offering advantages like no state income tax, minimal reporting requirements, and robust asset protection laws. By establishing an LLC in Nevada and registering it in your home state, you can potentially reduce tax liabilities and safeguard your personal assets. Additionally, Nevada’s well-established legal framework and reputation for business flexibility can provide a strong asset protection foundation for your company.

Prefer to read? A full transcript is provided below.

Cort:

Hello and welcome to another edition of Wealthy and Wise. I’m your host, Cort Christie. And today we’re going to be answering the question that we most often get, which is why a Nevada LLC over using an LLC in your own home state. And what’s the big deal about that? And we brought a very special guest. We have Shannon Hymas, one of our top advisors here at NCH. Shannon, welcome to the program.

Shannon:

Thank you.

Cort:

Absolutely. And you’ve been on before. We’ve talked about a number of different subjects, but today we’re going to really get down to the basics and the basics that you are talking to people on, on your consultations really has so much to do with like, what is it about Nevada and why do I want to register my LLC in a state where I don’t even live? And so, let’s just get right into that, you know, what do you tell people when they have that question?

Shannon:

You can do whatever you want, but most of the time people pick up the phone and call us or come to us because they want the best guidance possible. So, when we’re looking at it, yeah, you can absolutely set up an LLC in your home state or you can set up an LLC in Nevada doing business in your home state. And the difference is going to be if you set it up in your home state, you’re subject to the laws of your home state. Now, if you set it up in Nevada doing business in your home state, you get the legal protections of Nevada, which are going to give you the best protections across the board. And then we do a process that’s called foreign filing, which is, I kind of joke around and say it’s a permission slip. Don’t ask anybody else about that. That’s a Shannon-ism. It’s really called foreign filing. So, we foreign file it into your home state. So basically, it was born in Nevada. So, it gets all the legal rights and protections of Nevada and then we get permission to do business under the laws of Nevada in your home state. So that’s the nutshell of the way I put it, because under Nevada law, the only reason why the corporate veil could be pierced and you get sued personally for anything that happens with your business, is if they were able to prove that you were intentionally committing fraud. And we’re not doing that, are we? So long as we’re not doing that, we’re good to go. So, you’d have the legal protections of Nevada in your home state. Now, if we set it up as a home state entity, then it’s going to be subject to the laws of your home state. Now, if you’re in California, pick up the phone and call me now, because under California law, there’s 28 different reasons why you could get sued personally for something that happens with your business.

Cort:

Which I think is so funny because that’s the reason that people are actually coming to form an LLC, is to provide them a layer of protection against personal liability in their business. And all of a sudden, you’re saying if you’re in California, get out no, just come to us, come to Shannon at NCH and she’s going to help you set it up in Nevada first, which I love that. It’s kind of like our state slogan, Battle Born. It fits right in there. Born in Nevada. That’s where you want your LLC to be born, but then you’re going to operate it back home. Yeah, I also think you brought up some great analogies for people to think about, just to kind of root it as to what the advantage is. You know, I think you’re in a car, you feel pretty safe, right? But a lot of people don’t wear their seatbelt. Some people would always wear your seatbelt. You know if your life is of value to you, you wear your seatbelt, right? You get in a car accident. If you’re going five miles an hour, you don’t have your seatbelt on. It probably is not that big of a deal, right? But if you’re going 60 miles an hour to get in a car accident, you want that seatbelt on. And when I think of it in terms of an LLC, do you want that seatbelt, which is the Nevada LLC, that’s there to protect you? And it’s probably like more of a protection of having like a race car driver and a whole yoke and helmet.

Shannon:

Air bags and all the others.

Cort:

So, you’ve got all these great protections, you know, make sure you take advantage of it, because in business, no one knows where their business is going to take them. But if you have any wealth that you are trying to protect outside of your business, just know that you want the best and Nevada LLCs are the best and you do not have to live here to have one. And as you mentioned, how easy it is to register it for them in their home state. But they get to take the laws of Nevada with them. And so, what else do you tell people when they just have that, like uncertainty. Like this still doesn’t make sense to me Shannon. You know, I was told by my attorney or my CPA just to register an LLC.

Shannon:

Well, that actually happened a lot. So, your attorney is your attorney. He’s there to advise you on legal things. Your CPA, or your accountant is your CPA or accountant, and there to advise you on tax things. A lot of times I hear, my attorney told me to talk to my CPA, my CPA told me to talk to my attorney. Guess what? They both tell you to call us. And because this is their lane, this is their lane. They don’t cross. Here, we have all of the services for business owners and investors right under one roof. So, we are able to bridge that gap and actually give you the best guidance based upon what it is you’re wanting to accomplish. So, your attorney may tell you, go ahead and set it up as a home state. Okay, that’s because your attorney, where does he practice? There in your home state. So, if something happens, he’s going to be the one representing you there. He probably doesn’t have that much information on the laws of Nevada. So, he’s not going to be able to advise you on that. Your CPA, they don’t care as long as you do your taxes and you come back to them. So, they’re not going to be able to give you any information on what is going to better legally protect you or not. So, I love that analogy of the car insurance. So, you can get a car, you can start a business, you can drive a car, you can start a business. It can be in your home state, it can be a sole proprietor, it can be an LLC, it can be a corporation. But what is it that you want to do? Do you want to get the Cadillac? Do you want the airbags? Do you want the protection? Do you want the higher insurance? All of those things are what you’re going to get built right in when we set up a Nevada LLC. Now you can drive the car, but do you know how safe you are when driving it? Do you know anybody else that’s going to drive the car with you, your employees, etc.? Are they going to be following the laws? Are they going to be doing everything that they need to do that’s going to protect you?

Cort:

Good point.

Shannon:

If you’re not sure…

Cort:

You got employees, number one area of laws, lawsuits. You’ve got tenants in a real estate project, another area of massive litigation. You mentioned professionals like tax people, CPAs, attorneys. One of the things you have to first of all understand about an attorney is what’s their area of specialty? Do they practice family law? You know, so they’re a divorce attorney and they’re going to tell you whether you should have an LLC or a corporation or where you should register it. You have to go to an expert in that area. It’s like, you know, for medical, if someone’s a podiatrist, you don’t go to them for your heart condition and you go to a cardiologist and vice versa. Right? Specialties are so important and that’s what it is in law. And it’s really the same with a tax pro. A tax expert is not an asset protection person. Your CPA has nothing to do with asset protection and most of the time they’re not even really good at business taxation. They might be good at your personal taxes. So, there’s specialties in all these areas. We’ve got all of that under one house. We’ve got the attorneys that specialize in asset protection. We’ve got the CPA’s here to help you with minimizing your taxes. And then we have experts like Shannon that are here to get you set up with the right state to get an LLC registered and filed for yourself. So important. Shannon, thanks for sharing this invaluable information with all of us. And I know you talk about this all day long and you love what you do, and I know you’re really good at it as well.

Shannon:

Thanks Cort. I love it.

Cort:

Thanks for being on the program. And for all of you tuning into another edition of while the wise, thanks for watching. Send us your questions please like and subscribe. We like to share our message out there and most importantly, give us a call. Schedule an appointment with us because people like Shannon are waiting to talk to you now and it costs you absolutely nothing. Our advisory calls are complimentary to you. Just to help you understand how this works and how we can help you protect your valuable assets.

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.