Why Incorporate in Nevada?

The Complete Case for the Silver State Over Delaware

Updated April 2025 · Cites NRS Chapter 78 & DGCL Title 8

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Introduction

For over two centuries, Delaware has been the unquestioned home of American corporate law. Its Court of Chancery, built on 200 years of precedent, became the lingua franca of Wall Street, venture capital, and M&A attorneys everywhere. More than half of Fortune 500 companies are Delaware corporations, and the state’s predictable, flexible corporate code made it the reflexive choice for anyone who has ever sat across from a startup lawyer.

That reflexive choice is now being questioned , loudly, and by some of the biggest names in business. A growing movement known as “DExit” is pushing founders, boards, and institutional investors to reconsider whether Delaware’s prestige still justifies its costs and litigation risks. And the primary beneficiary of that reconsideration is Nevada. The debate over Nevada incorporation vs Delaware has become one of the most important conversations in modern corporate law.

This guide examines Nevada’s corporate laws in depth, comparing actual statutory fees, tax structures, governance protections, and judicial philosophy , so you can make an informed decision rather than an inherited one.

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THE “DEXIT” PHENOMENON: WHY COMPANIES ARE LEAVING DELAWARE

The “DExit” Phenomenon

The spark igniting the DExit movement is widely attributed to the January 2024 decision by the Delaware Court of Chancery to invalidate Elon Musk’s $56 billion Tesla compensation package — a ruling that rattled corporate boards across America and prompted Musk to urge founders to incorporate in Nevada or Texas.

But the underlying pressure had been building for years. Delaware’s Court of Chancery had issued a series of rulings in M&A litigation — including Crispo, Moelis, Activision, and Match Group — that many corporate boards viewed as increasingly unpredictable and plaintiff-friendly. Combined with franchise taxes that can reach $250,000 per year for large companies, the calculus began to shift.

Source: Glass Lewis analysis of 2025 proxy season; Harvard Law School Forum on Corporate Governance.

During the 2025 proxy season, 18 of 28 companies with reincorporation proposals voted to leave Delaware — a roughly 70% increase from prior years. Of those 18, 13 chose Nevada. Companies that have already made or publicly announced the move include:

• Dropbox (DBX), Trade Desk (TTD), Fidelity National Financial (FNF)
• Roblox (RBLX), Madison Square Garden Entertainment, AMC Networks (AMCX)
• Sphere Entertainment (SPHR), Tempus AI (TEM), Pershing Square Capital
• XOMA Royalty (XOMA), Universal Logistics Holdings (ULH)

“Top law firms are recommending Nevada and Texas over Delaware.”
— Bill Ackman, CEO, Pershing Square Capital Management (2025)

Nevada responded with alacrity. In May 2025, the Nevada Legislature enacted Assembly Bill 239 (AB 239), a sweeping set of reforms to NRS Chapter 78 that modernized the state’s corporate governance framework — including clarifying fiduciary duties, permitting jury-trial waivers, and tightening the definition of “controlling stockholder.” The state has also proposed a dedicated Nevada Business Court (Assembly Joint Resolution 8), modeled on Delaware’s Court of Chancery.

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NEVADA INCORPORATION 101: STATUTES, STRUCTURE & PROCESS

Nevada Incorporation 101

Nevada corporations are governed by NRS Chapter 78 — Private Corporations, the state’s primary corporate statute — Nevada’s equivalent of Delaware’s General Corporation Law (DGCL, Title 8). NRS Chapter 78 takes a more prescriptive approach than the DGCL, codifying governance standards directly into statute rather than relying on evolving judicial precedent.

Basic Formation Requirements under NRS Chapter 78

To form a Nevada corporation, you must file Articles of Incorporation with the Nevada Secretary of State pursuant to NRS §§ 78.030 and 78.035. The articles must include:

• The name of the corporation (must be distinguishable from existing entities — NRS § 78.039)
• The number and par value of authorized shares (NRS § 78.035(1)(b))
• The name and address of the registered agent in Nevada (NRS § 78.090)
• The names and addresses of the initial board of directors (NRS § 78.035(1)(d))
• The name and address of the incorporator(s)

Within 30 days of filing, the corporation must submit an Initial List of Officers and Directors under NRS § 78.150. Nevada does not require shareholders, directors, or officers to be Nevada residents.

Nevada’s SilverFlume Portal

Nevada’s Secretary of State offers an online business filing system at nvsilverflume.gov, which allows same-day or next-day processing for most standard filings. Paper submissions typically take one to two weeks.

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FILING FEES & ANNUAL COSTS: NEVADA VS. DELAWARE BY THE NUMBERS

Filing Fees & Annual Costs

This is where Nevada’s argument becomes most compelling. The difference between what a company pays in Nevada versus Delaware is not marginal; for a publicly traded company with a high share count, it can mean hundreds of thousands of dollars per year in savings.

Nevada Corporation — Articles of Incorporation Filing Fee (NRS § 78.760)

The fee is based on the total authorized capital value (par value x shares):

Source: NRS § 78.760. Corporations using a par value of $0.001/share with 75M authorized shares can keep authorized capital at $75,000, qualifying for the $75 base fee.

Additional Formation Costs

• Initial List of Officers and Directors: $150 (NRS § 78.150)
• State Business License (corporations): $500 (NRS Chapter 76 / NRS § 76.100)
• Typical total at formation (small corp.): $75 + $150 + $500 = $725

Nevada Corporation — Annual Ongoing Costs

• Annual List of Officers and Directors: $150/year (NRS § 78.150) — due last day of anniversary month
• Business License Renewal: $500/year (NRS § 76.100)
• Total annual state fees: $650
• Late penalty — Annual List: $75 (NRS § 78.150)
• Late penalty — Business License: $100 (NRS Chapter 76)

Nevada LLC — Formation & Annual Costs

• Articles of Organization: $75 (NRS § 86.161)
• Initial List of Managers or Members: $150
• State Business License (LLCs): $200 — lower rate than corporations (NRS § 76.100)
• Total LLC formation: $425
• Annual renewal (Annual List + License): $350 (NRS § 86.263)

Nevada vs. Delaware — Side-by-Side Comparison

Sources: Delaware Division of Corporations (corp.delaware.gov); Nevada Secretary of State; NRS §§ 78.150, 78.760, 76.100, 86.263; Delaware Code Title 8 § 503.

A Real-World Example: $250,000 in Annual Savings

In its SEC filings, one publicly traded company disclosed: “For Fiscal 2022, we paid approximately $250,725 in Delaware franchise taxes… If we redomesticate in Nevada, our current annual fees will consist of an annual business license fee of $500.00 and the fee for filing the Company’s annual list of directors and officers… currently equal to $1,225.”

That is a reduction from over $250,000 per year to approximately $1,725 per year — a savings of roughly $248,000 annually.

Source: Harvard Law School Forum on Corporate Governance, citing SEC Schedule 14A filings (2025).

Nevada Expedited Processing Fees

• 24-hour processing: Additional $125
• Same-day service: Additional $500
• 2-hour processing: Additional $1,000
• 1-hour processing: Additional $1,250

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TAX ADVANTAGES OF NEVADA INCORPORATION

Tax Advantages of Nevada Incorporation

Nevada’s tax structure for corporations and LLCs is among the most favorable in the United States, with several advantages codified directly in the Nevada Constitution (Article 10) and state statutes:

• No state corporate income tax — a Nevada corporation doing business in Nevada pays no state income tax.
• No personal income tax — Nevada’s constitution prohibits a personal income tax, benefiting closely held corporations and pass-through entities.
• No franchise tax for corporations or LLCs — unlike Delaware’s $175–$250,000+ annual franchise tax, Nevada charges none.
• No inventory tax — Nevada imposes no tax on business inventory.
• No taxes on corporate shares — the transfer or holding of corporate shares is not separately taxed.
• Low payroll taxes — Nevada’s unemployment insurance and other payroll taxes are comparatively low.

Important Caveat: Commerce Tax

Nevada imposes a Commerce Tax on businesses with Nevada gross receipts exceeding $4 million per year. Rates vary by industry from 0.051% to 0.331%. Businesses below $4 million owe nothing. Also remember: you pay taxes where you operate, not just where you incorporate. If your corporation is formed in Nevada but conducts business in California or New York, you still owe taxes in those states.

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DIRECTOR & OFFICER PROTECTIONS UNDER NEVADA LAW

Director & Officer Protections Under Nevada Law

Nevada’s greatest structural advantage — and the primary driver of the DExit movement — is its treatment of director and officer liability. This represents a fundamentally different governance philosophy from Delaware.

The Business Judgment Rule: NRS § 78.138

Nevada’s statutory business judgment rule is codified in NRS § 78.138. It presumes that directors and officers act in good faith, on an informed basis, and with a view to the interests of the corporation. Under NRS § 78.138(7), a director or officer is not individually liable for any damages from any act or failure to act unless ALL THREE of the following are proven:

• The presumption of good faith in subsection (3) has been rebutted; AND
• The act or failure to act constituted a breach of fiduciary duty; AND
• The breach involved intentional misconduct, fraud, or a knowing violation of law.

This three-part conjunctive test requires proof by clear and convincing evidence — significantly more protective than Delaware’s preponderance-of-evidence standard.

Nevada vs. Delaware Governance Comparison

Sources: NRS §§ 78.138, 78.257; DGCL §§ 102(b)(7), 220; Paul Hastings LLP client alert (2025); Alston & Bird analysis of AB 239 (2026).

AB 239 Reforms (Effective May 30, 2025)

Nevada’s AB 239 addressed key gaps in NRS Chapter 78:

• Controlling stockholder defined as holder of voting power to elect at least a majority of the board. Their sole fiduciary duty is to refrain from exerting undue influence to induce a director/officer breach.
• Jury-trial waivers for internal corporate actions may now be included in articles of incorporation.
• Directors/officers must now exercise powers “on an informed basis” (clarifying the business judgment standard).

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NEVADA AS AN ALTERNATIVE FOR PUBLICLY TRADED COMPANIES

Nevada for Publicly Traded Companies

For many years, publicly traded companies were effectively presumed to be Delaware corporations. That calculus has meaningfully shifted in 2024–2025. Nevada has specific statutory provisions tailored to publicly traded entities that provide meaningful advantages.

Stockholder Inspection Rights (NRS § 78.257)

NRS § 78.257 — governing stockholder inspection rights — explicitly does not apply to a publicly traded Nevada corporation that is current in its Securities Exchange Act of 1934 reporting obligations. This means shareholders cannot use state-law inspection demands to access board minutes, internal deliberations, or strategic materials — a significant shield against the pre-litigation discovery tactics common in Delaware under DGCL § 220.

Anti-Takeover Provisions (NRS §§ 78.378–78.3793)

Nevada’s control share acquisition statutes provide that an acquiring person who crosses certain ownership thresholds (20%, 33⅓%, or 50%) must obtain stockholder approval before exercising voting rights on those shares. NRS § 78.139 also permits the board to consider long-term interests of employees, creditors, and communities — not just stockholders — when evaluating acquisition proposals, providing a statutory basis for broad defensive measures.

The Trade Desk Precedent: Simple Majority Sufficient

In Gunderson v. The Trade Desk, Inc. (Delaware Court of Chancery, November 7, 2024), the Court held that Trade Desk needed only a simple majority vote — not a two-thirds supermajority — to reincorporate in Nevada via corporate conversion under DGCL § 266. Trade Desk’s stockholders subsequently approved the move. This decision significantly lowered the practical hurdle for any Delaware company considering reincorporation.

Key Takeaway for Public Companies

Under Gunderson v. Trade Desk, unless a company’s charter explicitly extends supermajority voting requirements to corporate conversions, a simple majority vote is sufficient to approve reincorporation to Nevada. Confirm your charter language with Delaware counsel before proceeding.

Nevada’s Proposed Business Court

Assembly Joint Resolution 8 (AJR 8) proposes creating a dedicated Nevada Business Court with exclusive jurisdiction over stockholder rights disputes, M&A litigation, fiduciary duty claims, and other corporate matters. If approved by Nevada voters (AJR 8 must pass a second legislative session in 2027, then a public vote), Nevada would have a specialized court substantially closing the judicial sophistication gap with Delaware’s Court of Chancery.

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HOW TO REINCORPORATE FROM DELAWARE TO NEVADA

How to Reincorporate from Delaware to Nevada

Step 1: Board Approval

The board of directors must vote to approve the reincorporation proposal and engage Delaware and Nevada counsel to compare stockholder rights, prepare proxy materials, and draft Nevada articles of incorporation and bylaws.

Step 2: Proxy Statement and SEC Filings

Publicly traded companies must file a proxy statement (Schedule 14A) disclosing the proposed change, the differences in stockholder rights between Delaware and Nevada law, and the board’s rationale. The SEC reviews these materials.

Step 3: Stockholder Vote

Per Gunderson v. Trade Desk, a simple majority vote of outstanding voting power is typically sufficient under DGCL § 266 unless the existing charter explicitly applies a supermajority requirement to conversions. Verify specific charter language with counsel.

Step 4: File in Nevada and Delaware

Following shareholder approval, file a Certificate of Conversion with the Delaware Secretary of State under DGCL § 266, and Articles of Incorporation with the Nevada Secretary of State under NRS § 78.030. The conversion is effective upon both filings.

Step 5: Post-Conversion Matters

Update the registered agent in Nevada, notify stock transfer agents and depositories, update SEC filings, advise the relevant stock exchange, and file new governing documents as exhibits to the company’s next periodic report.

ISS and Glass Lewis Scrutiny

Institutional proxy advisory firms actively evaluate reincorporation proposals. In 2025, Glass Lewis reviewed 29 reincorporation proposals and assessed shareholder rights implications. Companies should anticipate scrutiny and prepare disclosures explaining the governance rationale — not merely cost savings — to maximize the chances of a favorable vote recommendation.

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WHO SHOULD FORM IN NEVADA?

Who Should Form in Nevada?

1. Founder-Controlled or Controlled-Stockholder Companies

Delaware’s entire fairness doctrine has historically subjected controlling stockholder transactions to intensive judicial scrutiny. Nevada’s narrower controlling-stockholder duty framework (post-AB 239) provides significantly more certainty. If a founder or controlling investor owns more than 50% of voting power, Nevada offers cleaner governance and reduced litigation risk.

2. Mid-Market Publicly Traded Companies Paying High Franchise Taxes

Any company paying more than $10,000–$20,000 per year in Delaware franchise taxes should model the Nevada alternative. Given that Nevada’s total annual cost is approximately $650 in state fees, the break-even point is typically within the first year. For companies paying $100,000+ per year in Delaware franchise taxes, the savings are transformative.

3. Asset Protection Holding Companies

Nevada offers charging-order protection for corporations — statutory provisions that can prevent a creditor from seizing shares of stock when the creditor has a judgment against a shareholder individually. Combined with minimal disclosure requirements and no corporate income tax, Nevada is highly attractive for holding companies and multi-entity structures.

4. Private Closely Held Corporations

For a private business with a small number of owners, Nevada’s statute-based governance rules provide clarity without the need for expensive litigation. The stronger director and officer protections reduce the risk of intra-company disputes escalating into costly lawsuits.

5. Real Estate and Asset-Heavy Businesses

Companies whose primary activity involves holding real property, intellectual property, or other appreciating assets benefit from Nevada’s privacy protections, no state income or capital gains tax, and charging-order protection.

6. Technology and Entertainment Companies with Controlling Shareholders

The DExit wave — Roblox, Sphere Entertainment, Trade Desk, Dropbox — includes a significant concentration of tech and media companies with dual-class share structures or controlling founders who face heightened scrutiny in Delaware’s courts.

7. Companies Anticipating M&A Activity as Targets

Nevada’s anti-takeover provisions (NRS §§ 78.378–78.3793) and the board’s ability to consider non-stockholder constituencies when evaluating offers (NRS § 78.139) can provide meaningful leverage when resisting or negotiating unsolicited acquisition proposals.

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HONEST TRADE-OFFS: WHEN DELAWARE STILL WINS

Honest Trade-offs: When Delaware Still Wins

Nevada is not universally superior. Delaware retains meaningful advantages for specific business situations:

• Venture capital funding — Most VC term sheets are written for Delaware C-corps. Institutional investors still prefer — and sometimes require — Delaware entities. If raising institutional venture capital is the primary goal, Delaware remains the path of least resistance.
• Case law depth — Delaware’s 200+ years of Court of Chancery decisions means there is an answer to almost any corporate governance question. Nevada’s case law is thinner and its business court is not yet operational.
• Stockholder rights and market premium — Studies show Delaware incorporation correlates with a market premium on corporate value, potentially reflecting investor confidence in Delaware’s stockholder protections.
• IPO preparation — Most U.S. IPOs in the past decade have been Delaware entities. For a company preparing for a near-term IPO, the friction of reincorporating and educating the deal team may not be worth it.
• Small businesses in one state — If your business operates exclusively in your home state, incorporating in Nevada requires foreign qualification anyway — meaning you pay Nevada fees AND home state fees. For single-state small businesses, incorporating at home is almost always more cost-effective.

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CONCLUSION & ACTION STEPS

Conclusion & Action Steps

The DExit movement of 2024–2025 represents the most significant challenge to Delaware’s corporate dominance in decades. It is driven not by ideology but by economics and governance pragmatism: Nevada offers no franchise tax, stronger statutory protections for management, limited stockholder inspection rights for publicly traded companies, and a legal philosophy rooted in clear statutory language.

For mid-market and large publicly traded companies paying tens or hundreds of thousands in Delaware franchise taxes, for founder-controlled businesses seeking protection from activist stockholders and derivative suits, and for holding companies valuing privacy and asset protection, Nevada is — in many cases — the superior choice.

Delaware recognized the threat. Senate Bill 21, enacted in March 2025, made the most significant amendments to the DGCL in decades, adding safe harbors for controlling stockholder transactions and narrowing books-and-records rights. The competition is real and reshaping American corporate law.

Your Action Steps

1. Audit Your Delaware Costs

Pull three years of franchise tax invoices. Model your annual fees in Nevada ($650/year for corporations).

2. Review Your Governance Situation

Do you have a controlling stockholder? Have you faced stockholder litigation threats? Dual-class shares? These factors weigh in favor of Nevada.

3. Engage Nevada and Delaware Counsel

Have both firms compare stockholder rights under each regime. Prepare a memo for your board.

4. Review Your Charter for Voting Thresholds

Following Gunderson v. Trade Desk, confirm whether your charter requires a supermajority or simple majority for a corporate conversion.

5. Plan for Proxy Advisor Scrutiny

If you are a public company, document the governance rationale beyond cost savings.

6. File Through SilverFlume

Nevada’s online portal (nvsilverflume.gov) offers fast, efficient processing with same-day options available.

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KEY NEVADA STATUTES REFERENCED IN THIS ARTICLE

• NRS § 78.030 — Articles of Incorporation
• NRS § 78.035 — Required Provisions
• NRS § 78.090 — Registered Agent
• NRS § 78.138 — Business Judgment Rule / Director & Officer Liability
• NRS § 78.139 — Director Considerations in Acquisitions
• NRS § 78.150 — Annual List of Officers (filing fee: $150/year)
• NRS §§ 78.378–78.3793 — Control Share Acquisitions (anti-takeover)
• NRS § 78.4265 — Publicly Traded Corporations (defined)
• NRS § 78.257 — Stockholder Inspection Rights (exempt for public co.)
• NRS § 78.760 — Filing Fees: Articles of Incorporation ($75–$725)
• NRS § 78.765 — Filing Fees: Amendments (min. $175)
• NRS § 86.263 — LLC Annual Fees ($350/year)
• NRS § 76.100 — Business License ($500/year corporations; $200/year LLCs)
• NRS Chapter 78, AB 239 (eff. May 30, 2025) — 2025 Governance Reforms

Verify current fee schedules at nvsos.gov and corp.delaware.gov before filing.

© 2025 Nevada Incorporation Guide · All statutory references are to the 2025 Nevada Revised Statutes

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Legal Disclaimer

This article is for informational purposes only and does not constitute legal or tax advice. State laws change frequently. Consult a licensed corporate attorney in your jurisdiction before making any incorporation or reincorporation decisions.