Posts Tagged ‘Real Estate’

The Nevada Myth: Rethinking the Nevada Corporation

September 29th, 2022

After you have decided that incorporating is beneficial for your business,Guest Posting some people consider incorporating in states outside of their home state. Most notably, Nevada has been promoted by many “incorporating services” as having incredible benefits as opposed to the client’s home state. Other states such as Delaware and more recently Wyoming have also received consideration for incorporating. In some cases, depending on the facts of your business, there are some benefits in forming an out-of-the-home-state corporation in states such as Nevada. However, in the majority of cases the benefits of forming a Nevada corporation is simply a myth and will often be more expensive and troublesome than filing in the company’s home state.

Law of the Land: Foreign Entities

This may be a surprise to many, typically, corporations will be governed under California law despite being incorporated in Nevada. Let’s assume you do file a Nevada, yet you operate all of your business in California. Under this scenario, you are deemed to be a “pseudo foreign” corporation. If the corporation is a pseudo foreign corporation, California law in many areas will supersede the law of the state where the company was incorporated in. (See California Corporation Code §2115(b)). Therefore, for companies entirely based in California and doing business in California, practically all of the claimed benefits of incorporating in Nevada are out the window. It should be noted that if a Nevada corporation operating in California fails to qualify as foreign corporation, it may be subject to a number of sanctions. (See California Corporation Code §§2203, 2258, 2259).

Nevada v. California

The benefits typically touted by a Nevada corporation are the following: lower costs; tax savings; and greater privacy. But is any of it true? Below we will discuss some of these issues.

Only Four in Nevada

April 23rd, 2022

As hard as it may be to comprehend there was a wine industry in the U.S. before there was a wine industry in California; pre-statehood. It seems the earliest effort to develop a vineyard may have been as far back as 1619. However, Thomas Jefferson experimented with vines but the results were not enough to really produce consistent crops. According to research by Jess Zimmerman, in 1798 a family from Switzerland (Dufour) planted a large vineyard in Kentucky using European vine stock. But, soon the Dufour Family moved their winery operation to Ohio.

As with all early efforts at commercial wine making, the rootstock used was of European origins and did not do well in American soil, with the climate conditions and indigenous plant diseases. However, when the European vine (vitis vinifera) was combined with a Native American grape (vitis labrusca) then the wine industry in American had a hearty vine and good fruit. Today, many universities are engaged in research trying to produce the perfect grape vine for wines, table grapes and raisins.

So, there is somewhat of a debate as to the state with bragging rights for the “first commercial winery/vineyard in America”. Some researchers let the debate live on and just give Kentucky and Ohio equal billing. The Dufour’s Kentucky’s vineyard did not do well initially and Ohio was the place where Dufour found the right vine to survive beyond only a few years before disease took its toll.

Interestingly, all 50 states have winey operations today. Some of the largest operations are in California, Washington, Oregon, New York and some states have a token presence; referring to Nevada. Nevada has 4 wineries equally divided between Southern Nevada (Las Vegas area) and Northern Nevada (Reno area). Grapes are not a big crop in Nevada, due in large part to heat, drought conditions and harsh winters. Some research is being conducted, most notably, in Oregon, California, Washington and New York to develop vines that will produce quality fruit in various climates and elevations. Varietals that seem to do well in a desert climate are Rieslings, Pinot Gris and some Rhone’s and Zinfandels and Merlots in Southern Nevada.

As noted previously, Nevada has 4 wineries; all have some vines planted that range from 3 acres to 10 acres. By most standards these are not significant size vineyards. To produce enough wine to be viable, all Nevada wineries do buy additional fruit from California. In approximately 4 hours drive time, Nevada wineries can have high quality fruit delivered from some of the world’s finest vineyards in the Central Valley of CA, Napa, Sonoma and Santa Ynez.

Mr. Frank Boul started the first winery in Nevada in 1933 and his wines were served in some very nice hotels in the U.S. Today, the longest serving winemaker and winery owner in Nevada is Mr. Jack Sanders who was the founder of the Pahrump Valley Winery; a few years ago he sold the Winery to Bill and Gretchen Loken. But it wasn’t long until Bill Sanders started another winery in Pahrump-Sanders Family Winery. “In Southern Nevada, we have success with the Zinfandel, Petite Syrah and Merlot,” said Mr. Sanders.

Mr. Sanders has been active for 30 years in trying to build the wine business in Nevada. “In the 80′s Nevada politicians wanted a focus on rural Nevada as a tourism draw,” said Sanders. “Wineries are great for rural Nevada because they were set up for agriculture and wineries could attract more visitors.” Now the restrictions for growth of wineries in Nevada are almost insurmountable-87% of the land is owned by the Federal government and now there is the problem of water rights.

Northern Nevada also has two wineries-Tahoe Ridge Winery and Bistro and Churchill Vineyards with 8 acres and 10 acres respectively in vines. Tahoe Ridge Winery and Bistro is about 45 minutes from Reno in Minden, Nevada. Churchill Vineyards is in Fallon, Nevada and is part of the 1,200 acre Frey Ranch owned by Colby and Ashley Frey. Churchill is the newest winery in Nevada, founded in 2001 and is about 1 hour from Reno.

The Frey’s are fifth generation farmers on the land. Their decision to go into the wine business was partly due to the drought situation in Nevada; grapes take about 10% of the water required for other Frey Ranch crops. In addition Colby had gained some experience about wines and felt like that was a good move. The 10 acre vineyard is planted in Riesling, Chardonnay and Pinot Gris with their red varietal wines coming from California grapes. In total they produce 1,000 cases per year.

In addition to a small vineyard, they Frey’s grow grain and hay crops on the remaining 1,200 acres. With crops such as wheat, barley and rye they have perfect raw materials for distilled spirits-wheat, barley and rye. Guess what? They have built a just opened a tasting room for their wines and distilled spirits that is very nice and welcoming. Through the glass wall in the tasting room visitors can see two copper tanks that are impressive. They distill vodka, brandy, gin and bourbon. Theirs is the first commercial distillery in Nevada. In a separate facility is the winery operation that houses fermentation tanks, oak barrels, and a new bottling line. All of which makes for a top-of-the-line equipment for making wine and spirits.

Tahoe Ridge Winery and Bistro, the oldest winery (founded in 1990) in Nevada, has two facilities-Minden (winery) and Carson City. With 8 acres in vines and plentiful California grapes, Tahoe Ridge Winery and Bistro claims they produce several thousand cases of wine annually.

With 35 years in the travel and tourism industry (airline and tour operations), focusing on leisure travel to California Wine Country, I must say, given half a chance by the State of Nevada, wines in Nevada could see growth. Having lived in La Vegas and now Reno, I have visited these wineries and find their wines to be very respectable. Each of these four locations offers an ambiance that is unique. All are worth a drive to visit them when in Las Vegas or Reno. These wineries are growing fine fruit at 2,600 feet elevation in hot and dry Pahrump and at 4,200 feet in the Reno area in hot and now dry Fallon and Minden.

Wine and vineyards have a big component of agriculture about them. If you are looking for the feel of farming with state of the art winemaking facilities try Churchill. Vineyards. If you are visiting Southern Nevada, you should talk with Jack Sanders who has worked hard to make wine a growing industry in Nevada. Good wine and food is available at Tahoe Ridge and Pahrump Valley Wineries. See you there.