Corporate Services of Nevada
502 North Division St.,
Carson City, Nevada 89703-4103
Phone: (775) 883-3711,
Toll free: (800) 655-0538,
FAX: (775) 883-2723
502 North Division St.,
Carson City, Nevada 89703-4103
Phone: (775) 883-3711,
Toll free: (800) 655-0538,
FAX: (775) 883-2723
Nevada is the right choice for you to incorporate - offering many advantages to other "incorporation states".
LEGAL ADVANTAGES; A COMPARISON WITH DELAWARE
Not intended to be legal advice, for discussion purposes only.
A. Nevada Provides Stronger Personal Liability Protection To Officers And Directors
While statutes in Nevada and Delaware have codified the business judgment rule and some of the general fiduciary duties owed to a corporation by its directors and officers, senior management in Nevada corporations may enjoy a higher level of protection against personal liability due to Nevada's business-friendly corporate laws.
1. Fiduciary Duty and Business Judgment
Nevada, like most jurisdictions, requires that directors and officers of Nevada corporations exercise their powers in good faith and with a view to the interests of the corporation. NEV. REV. STAT. § 78.138(1). As a matter of law, directors and officers are presumed to act in good faith, on an informed basis, and with a view to the interests of the corporation in making business decisions. NEV. REV. STAT. § 78.138(3). In performing such duties, directors and officers may exercise their business judgment through reliance on information, opinions, reports, financial statements, and other financial data prepared or presented by corporate directors, officers, or employees who are reasonably believed to be reliable and competent. NEV. REV. STAT. § 78.138(2). Professional reliance may also be extended to legal counsel, public accountants, advisers, bankers, or other persons reasonably believed to be competent, and to the work of a committee (on which the particular director or officer does not serve) if the committee was established and empowered by the corporation's board of directors, and if the committee's work was within its designated authority and was about matters on which the committee was reasonably believed to merit confidence. NEV. REV. STA T. §§ 78.138(2), 78.125. However, directors and officers may not rely on such information, opinions, reports, books of account, or similar statements if they have knowledge concerning the matter in question that would make such reliance unwarranted. NEV. REv. STAT. § 78.138(2).
In Delaware, directors and members of any committee designated by the board are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports, and statements presented to the corporation by corporate officers, employees, committees of the board of directors, or other persons as to matters the member reasonably believes are within such other person’s professional or expert competence, provided that other person has been selected with reasonable care by or on behalf of the corporation. Del. Code Ann. tit. viii, § 141(e). Unlike Nevada, Delaware does not extend the statutory protection for reliance on such persons to corporate officers. See Nev. Rev. Stat. § 78.138(2); Del. Code Ann. tit. viii, § 141(e).
Not intended to be legal advice, for discussion purposes only.
A. Nevada Provides Stronger Personal Liability Protection To Officers And Directors
While statutes in Nevada and Delaware have codified the business judgment rule and some of the general fiduciary duties owed to a corporation by its directors and officers, senior management in Nevada corporations may enjoy a higher level of protection against personal liability due to Nevada's business-friendly corporate laws.
1. Fiduciary Duty and Business Judgment
Nevada, like most jurisdictions, requires that directors and officers of Nevada corporations exercise their powers in good faith and with a view to the interests of the corporation. NEV. REV. STAT. § 78.138(1). As a matter of law, directors and officers are presumed to act in good faith, on an informed basis, and with a view to the interests of the corporation in making business decisions. NEV. REV. STAT. § 78.138(3). In performing such duties, directors and officers may exercise their business judgment through reliance on information, opinions, reports, financial statements, and other financial data prepared or presented by corporate directors, officers, or employees who are reasonably believed to be reliable and competent. NEV. REV. STAT. § 78.138(2). Professional reliance may also be extended to legal counsel, public accountants, advisers, bankers, or other persons reasonably believed to be competent, and to the work of a committee (on which the particular director or officer does not serve) if the committee was established and empowered by the corporation's board of directors, and if the committee's work was within its designated authority and was about matters on which the committee was reasonably believed to merit confidence. NEV. REV. STA T. §§ 78.138(2), 78.125. However, directors and officers may not rely on such information, opinions, reports, books of account, or similar statements if they have knowledge concerning the matter in question that would make such reliance unwarranted. NEV. REv. STAT. § 78.138(2).
In Delaware, directors and members of any committee designated by the board are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports, and statements presented to the corporation by corporate officers, employees, committees of the board of directors, or other persons as to matters the member reasonably believes are within such other person’s professional or expert competence, provided that other person has been selected with reasonable care by or on behalf of the corporation. Del. Code Ann. tit. viii, § 141(e). Unlike Nevada, Delaware does not extend the statutory protection for reliance on such persons to corporate officers. See Nev. Rev. Stat. § 78.138(2); Del. Code Ann. tit. viii, § 141(e).
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