Primary/Secondary Businesses

[MaxAdv]

I read something about prim/sec business at www.corpadvise.com. Is anyone doing this? I am in Ca and did my incorporation in NV registering here as foreign. I regret not buying a shelf corp. Here is my thought and please scream at me if Im way off. Reading that site leads me to believe I can still buy a shelf corp and I would use it the way the site talks about. Sorry...its hard to explain...this is what it says...can it really be done?! Should I do it?!

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"This can be done very easily through the use of the free enterprise system - one business doing business with another. There is no law stopping this practice. As an example, every business needs to be properly managed. If your Nevada corporation is in the business of management consulting and service, it could contract with your current business to provide any management related services that would be required. Assume that your Nevada business is netting $100,000 annually. If your Nevada corporation were to bill your current business for its management services in the amount of $70,000, that fee is a tax deductible item, reducing your total taxable income to only $30,000.

 

Then by forming another Nevada corporation, providing accounting services to your current business and billing it $25,000 for accounting fees, you have now reduced your total taxable income to only $5,000.

 

The key to this strategy is that you must make sure that the work is done through your Nevada corporation, and that they are being invoiced and paid.

 

In regard to the type of goods and services that your current business can purchase from your Nevada corporation is almost limitless, but keep in mind that the business conducted should be reasonable, legal, and viable. Other examples of possible business might be in the form of advertising or research and development. Your ideas will be much better than ours in deciding which tact to take from here.

 

Remember, Nevada has no corporate taxes whatsoever. Therefore, all the income that appears in your Nevada corporation saves thousands of dollars. This strategy provides you with a completely legal means of paying the least amount of tax on the money you've worked so hard to earn.

 

The key element here is that you really and truly do business through your Nevada corporation. Don't get caught with a sham; do it right! If you are truly performing a task with your Nevada corporation for your current business, billing your current business for these services, and collecting the fees for these services, then your Nevada corporation is legally conducting trade with your current business.

 

Of course, the best part of this is that your profits are now in tax-free Nevada...waiting for you to tell your Nevada corporation how to use them!"[/b][/b]

[JessicaRabbit88]

That is what I am doing. I have Corp A - I will be purchasing Corp B (or creating it if this buy doesn't work out). Then I will run the bar through Corp B, and Corp A will "consult" to Corp B. But it has to be legit. So for me my VP of Corp A will do all the book keeping for Corp B. Corp B will pay Corp A a "consulting" fee for this service. Then my VP is subleasing office space to Corp A and Corp A will pay this lease payment. My VP doesn't have to pull an income because she is an officer of Corp A.

 

There is a book called "Inc and Grow Rich".

 

Well worth the read.

 

Jessica

[javaowl]

That is what I am doing. I have Corp A - I will be purchasing Corp B (or creating it if this buy doesn't work out). Then I will run the bar through Corp B, and Corp A will "consult" to Corp B. But it has to be legit. So for me my VP of Corp A will do all the book keeping for Corp B. Corp B will pay Corp A a "consulting" fee for this service. Then my VP is subleasing office space to Corp A and Corp A will pay this lease payment. My VP doesn't have to pull an income because she is an officer of Corp A.

 

There is a book called "Inc and Grow Rich".

 

Well worth the read.

 

Jessica

 

Yes, it is a good book! Also, "Inc. Yourself" and "Own Your Own Corporation" are good ones also.