How a Corporation may be utilized in Asset Protection

The Corporation is a seperate legal entity from its stockholders. As such it can perform most duties that an individual person can, such as sign documents, engage in litigation, borrow, own property, open a bank account and incur trading debts. It is governed by a board of Directors who frame its overall affairs. In the U.S the Nevada Corporation is one of the most common ways to form a corporation when undertaking business enterprises.

In most cases, the corporation affords protection from liabilities (with the exception of taxes) for its stockholders, and limits potential losses to the investment made by the stockholders in the corporation. If the corporation is sued and files for bankruptcy, the stockholders  cannot be held responsible for its debts. As a result it is a common asset protection strategy when conducting business and for the protection of assets.

Unlike the LLC, the corporation is required to hold stockholder meetings, keep minutes and file annual state returns.

Features of the Corporation

• Owners are called stockholders not members
• The issue of stock in the corporation will depend on its type 
• Stockholders cannot be held personally liable for the debts of the Corporation
• Documented minutes of Board meetings are necessary to confirm that decisions have been made in the best interests of the corporation  
• Required to file annual state reports
• Profits are taxed at the corporate level not in the hands of the stockholder 
• Officers who manage the corporation are appointed by the Board
• Required to submit an annual tax return to the IRS