Corporate Haven Laws
What are Corporate Haven Laws?
Corporate haven laws are state laws that are designed to benefit corporations through various tax and filing incentives. States that maintain corporate haven laws are said to be “corporate havens” or “corporate haven states”. Corporate haven laws are designed to attract businesses to incorporate in that particular state or jurisdiction.
The most notable states which maintain corporate haven laws include Delaware, Nevada, Alaska, and Wyoming. Businesses may choose to file for incorporation in a corporate haven state in order to take advantage of the various benefits that the laws offer in that area. The business may conduct operations elsewhere throughout the U.S. while still being protected by corporate haven laws.
What are Some Features of Corporate Haven Laws?
Depending on the state of incorporation, corporate haven laws offer different benefits and advantages for businesses. For example, corporate haven laws in the state of Delaware tend to be favorable for larger and more complex corporations. In comparison, states like Nevada, Alaska, and Wyoming tend to protect smaller corporations and closed corporations.
Generally speaking, corporate haven laws offer benefits in the following areas:
- Various protections for shareholders and board of directors (mostly Delaware corporations)
- Protections for management (mostly Wyoming and Nevada corporations)
- Various tax shelter laws and protections for both residents and out-of-state businesses incorporating in the area
- Streamlined filing and incorporation processes
- Minimal need for actual physical presence in the state
- Application of law- the business is usually subject to the corporate haven laws where they’ve incorporated in, not where they’re actually doing business at
Thus, the choice of where to incorporate is an important decision for businesses, since it will affect the company’s rights and operations as a corporation.
What are Some Legal Issues to Watch Out for With Corporate Haven Laws?
One of the main legal issues associated with corporate haven laws is the issue of double taxation (i.e., a company being taxed twice for the same income). This may present an issue if the corporation is deriving income from outside the U.S. In such cases, the corporation may need to file specifically for certain tax credits and tax deductions, in order to avoid the issue of double taxation.
Do I Need a Lawyer for Assistance With Corporate Haven Laws?
Corporate haven laws are very important and can affect the future of the corporation’s success. If you need assistance in filing for incorporation, an experienced lawyer can help interpret the various corporate haven laws of each state. Your attorney can provide you with valuable legal advice on where and how to incorporate in the jurisdiction of your choice. An attorney can also represent you in court if you’re facing a violation or lawsuit involving corporate haven laws.
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Last Modified: 07-18-2012 02:55 PM PDT
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