I googled “Incorporate in Nevada” and one of the representative sites that came up invited me to incorporate in Nevada for three reasons: 1) Protection from personal liability for business debts; 2) Perpetual existence of the corporation; and 3) No limit on the number and citizenship of C-Corporation shareholders. This is so bogus, as any corporation formed in any state provides those three benefits. It is obvious this particular company was playing on the ignorance of the typical do-it-yourselfer by suggesting that there is something magical about Nevada (or Delaware, or Wyoming) as the state of formation of your entity. The truth is that in almost every situation, a company will do just fine by incorporating or organizing as an LLC in the state where its business will be located.

Hawaii is a relatively inexpensive place to incorporate, as compared to Nevada. Hawaii does not charge upward sliding fees based upon the number of shares authorized upon incorporation. Nevada does. The fee to incorporate in Hawaii is a flat $50.00. If one incorporates with 1,000,000 authorized shares of stock in Hawaii, the fee is still $50.00. In Nevada, the fee would be $375.00. Compare! Click here for the Nevada fee schedule, and then click here for the Hawaii fee schedule. If your business is done in Hawaii and you registered your entity in Nevada, you will need to pay an annual registration fee in both states.

Another advantage of incorporating (or forming your LLC) in Hawaii if your business will be here is that your lawyer, local banker, and accountant will be more familiar with the Hawaii laws and will be able to deal more efficiently with changes that may need to be made to your entity.

While I have advised clients to incorporate in Nevada or other states on rare occasions, the reasons in each case involved very particular tax or property issues particular to that client’s unique business product or holdings. In the vast majority of cases, keeping it Aloha is the way to go for business clients. And if you are a do-it-yourselfer, check out the tabs across my page above for some guidance on how to set up your corporation or LLC in Hawaii. Better yet, come in and see me for a no-obligation consultation.