Posted by osupsycho (OK) on July 19, 2005 at 08:48:38:
From what I understand the way that is recomended to avoid this problem is that the nevada corp does not do business in the other state. The nevada corp is a separate (on paper) business that sells its services in nevada and the other business goes there to buy (or lease) them. The key is that the local business must have no value on paper. In other words it must owe (on paper) as much or more money as it is worth to the nevada corp. Thus if someone sues the local company and wins it does not matter because it has no real value (it owes more than it is worth). This makes the suit a dead end and keeps the owners of the nevada corp secret (even though they are the same as the local company).
This seems to me to be only needed if you set out to do bad business or if you were in a highly litigious business. Way to much trouble, time and money for the small chance that it will ever be used. Of course you would get to take “business” trips to Nevada…Vegas baby Vegas!