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January 20, 2004 - Phil Hodgen

Bearer shares in Nevada

A website reader, Stephen B., popped me an email:

“In 2002, you mentioned that you had a question regarding the use
of “Bearer Shares” in a Nevada corporation, that is, whether Nevada
allowed the use of “Bearer Shares.” You also stated that you would
keep us posted on the issue. What is your opinion today?

Any help would be appreciated.”

Here’s my response to him.

Hi, Stephen–

I have yet to be convinced that bearer shares are a reality. No one has yet pointed me to a provision in Nevada law authorizing it. (Compare this to countries that explicitly allow bearer shares–they have a provision in their corporations law that says exactly that).

People who pimp (and I am using that word in its technical sense) Nevada corporations talk about having nominee shareholders. So what. I can use nominees almost anywhere.

Bearer shares — in Nevada or anywhere in the world — are a waste of time and of spurious value in terms of asset protection or privacy. And certainly in terms of tax planning they are absolutely worthless.

Not that I have any opinion about the subject.

Phil.

Tax and Trusts