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WYOMING ASSETPROTECTION

PROTECT ASSETS USING THE WYOMINGCORPORATION OR THE L.L.C.

• SLEEPER ASSET PROTECTION• NEW! LLC’S IN ALASKA & PANAMA• COMPARE DELAWARE & WYOMING• NEVADA PRIVACY MYTHS EXPOSED

WYOMING ASSET PROTECTION

WyomingVirtualOffice.com 2

All Rights Reserved. No part of this publication may be reproduced or transmitted in any formby any means (electronic, mechanical, photocopying or recording) or by any form of datastorage and retrieval system without the prior written permission from the copyright owner.

Publisher: Asset Profile, Inc.

ISBN 0-9649533-6-6

Disclaimer: The author and the publisher are not engaged in rendering accounting, tax orlegal advice. Always consult a tax attorney prior to implementing any suggestions written inthis manual. This material is not a substitute for legal or tax advice.

We don't provide tax advice, tax opinions, tax strategies or tax shelters. Contact a licensedtax attorney in the state in which you reside if you need these products and services. Thinktwice if you're told not to consult with the IRS.



TABLE OF CONTENTS

DESCRIPTION 4ASSET PROTECTION: WHY? 5ASSET PROTECTION: WHEN? 6EQUITY STRIPPING 7PROTECT ACCOUNT RECEIVABLES 9DECREASE THE IMPACT OF LITIGATION WITH TWO OR MORE ENTITIES 10USING TWO MORE CORPORATION OR LLC’S 11ASSET PROTECTION AND THE LIMITED LIABILITY COMPANY (LLC) 13THE NOMINEE OFFICER/CORPORATE OFFICER 16NOMINEE OFFICE EIN/NOMINEE EIN 17NOMINEE STOCKHOLDERS 18STEPS FOR IMPLEMENTATION 20C CORPORATION OR LLC? 22FRAUDULENT CONVEYANCE 23DELAWARE 25THE ALASKA SOLUTION/DISADVANTAGES 27THE SAFE OFFSHORE SOLUTION: AN OUTLINE FOR COMPLETE PROTECTION 30IDEAS TO CONSIDER, WHAT TO AVOID 37FORMING THE CORPORATION: NEVADA OR WYOMING? 39NEVADA PRIVACY MYTHS 40IMPLEMENTATION 41



DESCRIPTIONThe Wyoming corporation and limited liability company are explained as vehicles to protectassets.

OBJECTIVESThis manual discusses the following issues:

1. Protect income and assets beyond the limitations of liability insurance.2. Increase awareness of the risks inherent in keeping assets exposed.3. Increase asset control and financial privacy.4. Increase awareness of certain business transactions that increase client privacy in

financial counter-intelligence.

ADVISORY All of the strategies contained in this report enable a businessperson to increase awarenessabout asset protection arguments. There are no offshore structures involved in any of thisdiscussion that involve tax evasion or tax avoidance. Please be advised that the use of offshore trusts, International Business Corporations andother entities may run afoul of U.S. laws if certain reporting requirements are not met. Pleaseadvise a competent tax professional and legal counsel before implementation of any of thesestrategies. You may continue reading this manual if you agree to the following statements:• I agree not to engage in tax evasion.• I agree to complete all mandatory declarations and reporting as required by U.S. law.• I agree that Asset Profile, Inc., or Guillermo D. Jalil, shall not be a party to an act of

fraudulent conveyance, tax evasion, or any other type or form of fraud.• I agree to seek independent and qualified tax counsel about this information.• I agree to seek independent legal counsel about this information.• I agree that there's nothing secret about this information and no one has asked me to be

secret about anything, at anytime, or for any reason.• I agree not to engage in any activity that can be considered to be a tax shelter, or an

abusive tax shelter.• I agree that Guillermo D. Jalil, and Asset Profile, Inc. has not asserted to be a lawyer or

tax advisor.

Please discontinue reading this document if you are not in complete agreement with thestatements made above.

I go by the one known as Guillermo, family of Jalil, sovereign. My sample instruments are for educationaluse only, and are explicitly under reserve and without recourse. My material is my own intellectual,private property covered by a common law copyright for 100 years. The viewer may, for his/her ownpersonal use only, use my material as examples to aid him/her in his/her particular situation, but he/shemay not copy and distribute my material to anyone without my prior, written permission, nor can he/shereceive economic gain from my material.

I am not an attorney, and at no time am I giving legal advice. I deny I am using codes, rules, regulations,statutes, ordinances or legal material that is copyrighted, for the exclusive use by bar card attorneys, formy own personal gain or in any way to infringe on said copyrights.

I have put forth my best effort in generating sample, educational instruments that might help the viewerin his/her particular situation. I can not guarantee that any of the sample instruments will be effective forthe viewer's own particular situation. By using any of my material or sample instruments as a template fortheir own instruments, the viewer accept all liability for their instruments and the results thereof, andagrees to hold me harmless. If this is not acceptable, then do not use my material.

Any challenges to any portion of the above notices/agreements, or to any portion of my informationpresented, or to any portion of my sample instruments, or to me, must be placed before the twelvejustices of the Constitutional County Court for the People at the county of Natrona County, Wyoming for adetermination on the merits of such challenges.



ASSET PROTECTION: WHY?

A hostile creditor is a person or other legal entity that seeks toinvoluntarily extract income or assets from you by any legal means toinclude litigation, divorce or abusive debt collection. In this discussion,anyone with a business or valuable assets is a target.

Litigators accept cases contingent on the probability of winning thecase, obtaining a settlement amount and upon the defendant’s ability topay. Attorneys assess the defendant’s ability to pay after conducting anasset search using key information, such as the defendant’s name,address, social security number and date of birth. Even when no assetsare found, a professional may be automatically targeted due to their

capacity to earn income.

Information is commonly retrieved from the following sources:

a. Yellow pages, White pagesb. Real estatec. Voter registrationd. Professional licensee. Censusf. Proprietary change of addressg. Motor vehicle, watercraft and

aircraft registration

h. Newsletter, newspaper andmagazine subscription

i. Military directoriesj. Pizza deliveryk. Call center information indexl. Credit bureau filesm. Electronic and telephone

assistance

Liens point toward valuable assets. The following sources are used to discover keyassets:

a. Mortgage Historyb. UCC Filingsc. Foreclosured. Bankruptcye. Student Loan Scofflaws

f. Adverse Creditg. Repossessed Vehiclesh. State Tax Liensi. Federal Tax Liensj. Real Propertyk. Collection Accounts

Assets that are linked to the name, address, date of birth and social security number of theowner are increasingly subject to collection and confiscation. An effective asset protectionplan can disassociate the owner from the assets without losing control of how those assets areused, stored or invested. This critical link must be removed for effective financial privacy andasset protection.

THERE ARE TWO BASIC STRATEGIES:1. Control assets without owning them in your own name. An effective asset protection

plan enables a person to control assets without linking them to identifiers, such as a nameor social security number, that give away the location and ownership of the assets. The CCorporation is used to achieve this objective.

2. Make the assets unattractive to the hostile creditor. You can make financialholdings, real estate, and other assets unattractive to the creditor. The creditor liable forfederal income taxes on income not yet received? Learn about the “charging order”protection and how it can be combined with financial privacy for effective asset protection.



ASSET PROTECTION: WHEN?

Implement an asset protection plan before financial or legaldifficulty is encountered.

Asset transfers can be challenged and reversed under thefraudulent conveyance laws if it can be shown that the transfer wasdone to unfairly frustrate a legitimate creditor.

An effective asset transfer must be completed well in advance of aneconomic or litigious threat. For example, gifting assets to family members shortly afterreceiving notice of litigation may result in the undoing of the asset transfer. The hostilecreditor could argue that the debtor intended to unfairly frustrate the creditor because of thetiming of the asset transfer. Therefore, the timing of the asset transfer is critical to protectingassets from hostile creditors. To prevent such a risk, transfer assets into the asset protectionstructure prior to possible claims from hostile creditors.

The asset transfer must also have the following additional attributes:a. Solvency hasn’t changed after the asset transfer.b. The litigation wasn’t foreseeable.c. The debtor did not abscond after the asset transfer.d. The assets weren’t transferred to a family member or friend.e. Assets were transferred for at least 70% of market value.

Procrastination As A Risk Factor Procrastination is a major threat to any asset protection plan. Time works to theadvantage of the property owner when an asset protection plan is implemented well inadvance of financial or legal difficulties. It demonstrates a lack of intent to frustrate creditorsor commit fraud. Procrastination and haste are two key threats to any attempt to protect assets fromabusive and hostile creditors. Haste typically accompanies procrastination because theproperty owner usually makes serious mistakes in the rush to protect assets, especially whenfeeling the immediate heat of litigation.

Solvency As A Risk Factor Insolvency cannot follow asset transfers into any entity, as a means of protecting thoseassets. This immediately unravels any legitimate attempt to protect assets. It raises red flagsand it provides a competent litigator with an argument that the asset transfer caused theinsolvency. This is highly suspect when litigation, or other creditor threat, is concerned. Forthis reason, insolvency must not take place for at least one year after any substantive assettransfer, as a precaution from a potential fraudulent conveyance claim.



EQUITY STRIPPING: BURDEN ASSETS WITH DEBT TO REMOVEVALUABLE EQUITY SOUGHT AFTER BY HOSTILE CREDITORS

Ask yourself these questions from the standpoint of the creditor:• Does it make sense to take a debtor’s house if he owed morethan what the house was worth?• Does it make sense to take a debtor’s car if there were more lienson the car than its fair market value?• Does it make sense to go after business assets that were soburdened with debt, that there was no way to recoup anything at all?

The answer is NO. Why? You can’t get blood from a stone. Filing a lien is as simple as filinga piece of paper. And all liens look the same from the standpoint of an outsider, or creditor.The process of attaching friendly liens against your own assets is called equity stripping. Thisis how immovable assets, such as real estate and rental income, is protected from creditors.

Creditors consider the following questions:1. What assets exist?2. What’s the fair market value of those assets?3. What attachments (liens) are filed against the assets and their amounts?4. How is the property going to appreciate, if at all, within the next few years?5. What is the total financial picture of the debtor?6. What are the chances that the debtor will choose bankruptcy if collection is executed

against the debtor?

Consider this concept when protecting your assets: “What a creditor can do to my assets, I can do to my assets.” Hostile creditors firstconsider whether assets exist for the taking. An asset with no liens and attachments areprime targets. That also means that an asset that has no equity because of existing liens areviewed as “damaged goods.” Creditors don’t pursue assets that lack in equity. And the orderof those liens determines who gets paid and in what order. There’s no reason for them to goafter a real estate property of there’s no equity.

Hostile creditors collect, or hire a professional to do so, depending upon the payoff,opportunity, and work involved. They move on to another debtor if there’s too much workinvolved. To professional debt collectors, there are too many debtors and so little time.They’ll wait if there aren’t enough assets or if the timing is not right. For those who engage ineffective equity stripping, the timing is never right and it’s always better to go after someother debtor. And there’s always someone else with more vulnerable assets.

First, you need a reason for the debt itself. Sign a promissory note that creates a debt.

Second, the corporation or LLC files liens against assets to back up the debt. As anyother creditor, the lien is used to support collection of the debt. This is normal businesspractice. Valuable assets are stripped from their equity through the use of liens. TheWyoming corporation holds these liens as collateral for the repayment of a loan, or some otherobligation. Once the liens are filed, hostile creditors perceive the assets as void of equity andleave them alone. See legal counsel for the proper filing of a lien and the necessarydocuments to substantiate that debt.

Real estate liens are filed with the Recorder Of Deeds office in your county.

Liens against personal property are filed through a Uniform Commercial Code (UCC) filingsuch as a UCC-1.

Third, maintain the corporation or LLC in good standing and the necessary servicesto secure financial privacy. Most people are assuming more debt every day. Our debt-laden society and bad spending habits are common. Therefore, such a social problem can beused to a wealthy person’s advantage because it appears so normal to incur so much debt.



Below is an example of how the accumulation of this artificial debt results in theappearance of being less prosperous, as the control over that wealth remains unchanged:

Before Equity Stripping:Assets Fair Market Value Liens Held By

CorporationCreditor Perception

House $200,000 -$0 $200,000Vehicles 30,000 - 0 30,000Business 100,000 - 0 100,000Total Assets $330,000 -$0 $330,000 Equity

Before AssetProtection

After Equity Stripping:Assets Fair Market Value Liens Held By

CorporationCreditor Perception

House $200,000 -$220,000 -$20,000Vehicles 30,000 - 30,000 0Business 100,000 - 130,000 - 30,000Total Assets $330,000 -$380,000 -$50,000

Perceived EquityAfter AssetProtection

The effect on perceived equity of the assets:$330,000 Equity – $380,000 in Liens = - 50,000 Total Equity Visible to Hostile Creditors

The equity has shifted to a Wyoming corporation under your private control. The control ofthe assets has not changed even though the perceived equity has been reduced to less thanzero.

I already live in my home. Should I use privacy or equity stripping?When you acquired the property, the public record reflects that it was titled in your name.This information is traded as a commodity. Even if you transfer the property into a company,the public record shows that you once owned the property, and that you currently live at thesame address. Consider these choices:• Transfer the company into an LLC. Please read about the charging order protection

afforded by the LLC.• File a lien against the property. A corporation or LLC holds the lien.

What forms should I use?Contact a local attorney to file the proper forms when filing liens against your own property.Otherwise, visit LegalForms.com. Ask you attorney about using a promissory note to create adebt owing assets to the company. And then file the lien at the Recorder of Deeds office inyour county to perfect (back up) the lien. It’s critical that you file the lien against your ownproperty before a creditor files the lien.



PROTECT ACCOUNT RECEIVABLES

The account receivables are often the largest and most exposed assetof a business. A judgment creditor can simply obtain control overcollections and collect the checks. Since most creditors are lazy and in ahurry to collect the funds, they pursue lazy debtors. In other words, lazycreditors prefer to go after debtors whose assets are easily reachable.Those debtors with assets that are encumbered (liens filed against theasset) are a low priority. Judgments are commonly sold as a receivable toothers who intent on collecting. Your value as a debtor depends on theaccessibility of your assets to execution.

A smart debtor uses creditor psychology to his own advantage. The bottom line isthat 90% of the creditors are in a hurry because there are “so many debtors and so littletime.” Consider protecting the account receivables.

A Simple Solution for Your Account Receivables

The owner of a business seeks to protect the account receivables of his business. We forma Manager-managed LLC and provide a street address, PO Box, mail forwarding, and amanager to serve on the public record representing the company. The business owner assignssomeone else to serve as the manager (nominee) of the LLC. There are two members to theLLC in order to obtain the charging order protection. The business owner signs a promissorynote agreeing that he owes the LLC a certain amount of money. The LLC then files a lienagainst the account receivables of the member’s business to perfect the note. Essentially, thebusiness owner is trading his account receivables for an interest in the LLC. The creditor must now make a choice. If he goes after the account receivables of thebusiness, then he must wait until the lien is paid off. If he forecloses on the accountreceivables there may not be much left and the process is lengthy. If the creditor seeks toobtain a charging order against the LLC, he must pay income taxes on phantom income. Thisdrives the creditor to negotiate a way out of this problem or face a costly pursuit.

Loans Using Account Receivables as Collateral

Instead of privately controlling the LLC that files a lien against the account receivables, youmay consider to obtain a loan from a financial institution. This means that a bank, forexample, files the lien as collateral for the loan. There are life insurance agents that advocatefor the investment of those loan proceeds in an annuity. Since many states protect lifeinsurance and annuity up to certain amounts, they promote this arrangement as an assetprotection plan. Remember that when the loan is paid off that the bank will release the UCC1from the account receivable, and the vulnerability returns.

Remain Cautious of Conflicting InterestsThe above example involving a loan from a financial institution should involve yourattorney and competent tax counsel. There are financial planners plugging this as anasset protection tool. The financial company, the life insurance sales person and anadministrator are all looking for their own interests. And many of them claim that youcan deduct certain interest expenses. This isn’t always true, particularly if the loanisn’t for business-related expenses. Therefore, make certain that your interests aresolely represented through legal counsel and your tax advisor confirms the supposedtax deductions. Don’t rely on the claims and opinion letters presented to you by aninsurance agent.

Balance the Costs & BenefitsThe interest expense from the loan theoretically is paid by the interest incomegenerated by an annuity, or other investment. “Asset Protection” is a benefit toutedby insurance sales people. They are seeking to free pockets of assets for an insurancesale. This is the time to call your tax advisor and calculate the cost and benefit of theproposed plan. The key here is to place the loan proceeds in a vehicle that protectsthe asset rather than also leave it vulnerable to the abusive creditor.



DECREASE THE IMPACT OF LITIGATION WITH TWO OR MOREENTITIES

FACT: Many people incorporate to limit legal liability, and the legal industryhas done well over the years using fear-driven marketing to convincepeople to form a corporation or limited-liability company. Althoughincorporating is an excellent idea, opportunity and legitimacy are alsoimportant reasons to incorporation for asset protection.

STRATEGY: Consider separating assets into two or more corporations toprotect one from the other, in case of litigation. Examples:

• A taxi association runs 100 taxis. They place 2 taxis in each corporation. Thereare 50 corporations controlling 100 taxis. If taxi number 57 runs someone over,the 98 other taxis won't be involved in any potential litigation. They may only losetwo taxi vehicles per incident, even if it’s serious.

• A pizza guru owns two companies, a delivery operation and a sit-in restaurant. Alawsuit involving one of the delivery vehicles can affect the restaurant. The ownerseparates them into separate businesses. Placing a nominee officer as Director ofthe delivery operation provides an increased level of protection, and separationbetween the two entities.

• A mail order business sells Internet products from one corporation and consultingservices from another. If one of the consultants makes a serious mistake, it won’tdrag the Internet operation into the lawsuit.

• A consultant provides services using one corporation that absorbs all the liabilityand risk. Another corporation holds title to the most valuable assets and is underhis private control.

• Separate corporations own a crane and dump truck. The sign manufacturer isinstalling a heavy placard that reads “I LOVE THE USA” on top of a tall building.There’s a Taliban man burning the US flag at entrance to the structure. The sign“unfortunately” falls on top of the protestor and squishes him like a bug. Thelawsuit only affects the corporation holding the crane and its operator. The dumptruck that's contained in another corporation is left unscathed from the litigation.

QUESTIONS:

• Is it’s worth the trouble and expense to use two corporations instead of one?

• Is it worth paying the filing and management fees to have access to this secondcorporation?

• Are you willing to invest an additional 40 hours of work to manage the corporation(formation, banking, filing, bookkeeping, administration effort, and tax preparation)?

• Is there a legitimate business purpose for using additional corporations? Limited liability isa great reason to use more than one entity.

Consider these two principles when distributing income or assets betweencorporations:

1. Transfer assets away from the corporation that deals with the customer. Most times,customers pose the greatest liability threat to the business.

2. Isolate liability to separate corporations according to the risk of litigation.


WyomingVirtua

USING TWO OR MORE CORPORATIONS OR LLC’S

Method #1: Two Separate Corporations Offer Different Products & Services

For increased protection, separate assets according to their relative level of liability exposure.High-risk assets such as a medical practice or a restaurant are best separated from brokerageaccounts and low-risk real estate investments. A risk-producing asset such as an apartmentbuilding should be contained in a separate entity from a residence. This separation takesplace by placing the assets into separate entities.

Two corporations are run separately and are taxed individually.

This method is simple in spreading income or assets between two corporations; however,assets remain exposed to risk from customer liability. This can also lead to confusion onbehalf of the customer, unless co-branding is effectively used. This strategy works as long asthe businesses are run separately.

Corporation 1: Sells equipment Corporation 2: Sells supplies

Customer Customer

Corporation 1: Sells equipment

CustomerCustomer has no contact with

Corporation 2.

HIGH RISKRestaurantMedical Practice

MODERATE RISKApartment Building

LOW RISKBrokerage AccountsIntellectual Property

Corporation 2: Brokerage accounts andintellectual property are separated fromliability risks. Real estate investmentsmay be in a third corporation becausetenants create liability.

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Method #2: LLC Used With Two Corporations

Income from LLC is split between two members.

Limited Liability Company – L.L.C.

• Taxed as partnership (pass-throughtaxation)

• Corporations as members

Customer

Corporation 1 Corporation 2

LLC earnings and distributions passthrough to the members, where they aretaxed.

Corporations 1 & 2 are members of theLLC and are independently owned of oneanother. The income passes throughthe LLC (taxed as partnership) to themembers, Corporation 1 andCorporation 2. Income is split betweentwo corporations, according to theirrespective interest in the LLC. Thisprovides limited liability on two levels.The LLC provides limited liability and sodoes the corporations that serve asmembers.

THE MAIN PURPOSE is to increasethe limited liability protection usingtwo or more entities. This processis called “Asset Protection.”



ASSET PROTECTION AND THE LIMITED LIABILITY COMPANY (L.L.C.)

In 1977, Wyoming was the first state to pass a LimitedLiability Act. This was the first time the Limited LiabilityCompany (LLC) was introduced to American business. Oncethe IRS recognized the LLC can be taxed as a partnership(that is, as a pass-through entity), all 50 states passedstatutes creating their own version of the LLC.

LLC Taxation:

(1) Single Member LLCsGenerally, when an LLC has only one member, the factthat it is an LLC is ignored or “disregarded” for taxpurposes. If the single member is an individual, thesingle member is essentially treated as a sole proprietorfor tax purposes and the LLC income and expenses arereported on the individual’s Form 1040. If, however, thesingle member is a corporation, the LLC income andexpenses are reported on the corporations’ return,usually Form 1120 or Form 1120S.

(2) Multi-Member LLCsMost multiple member LLCs are treated as a partnershipand file a Partnership Tax Return Form 1065.

Partnerships & Taxation

Partnerships are “pass-through” entities for tax purposes.This means that partnership income, deductions andother items passes through the partnership directly to thepartners. Accordingly, each partner takes into accounthis or her share of partnership income, deductions andother items in determining the partner’s individual taxliability.

Partnerships have partners. Limited liability companies havemembers. The ownership in the LLCis called the “member interest.”

If a judgment is awarded against the LLC itself, it may be levied, and LLC’s propertyseized or sold in payment. If, however, a judgment is awarded against a member, tothe extent that the operating agreement so states, distribution usually cannot becompelled to satisfy a member’s judgment debt. Creditors have to satisfy themselveswith a “charging order.” This gives them the rights to any distributions made by theLLC to that particular member, but little else.

The Limited Liability Of A Corporation

When a hostile creditor sues the corporation, normally, it can only take the assets ofthe corporation. The stockholders are generally not liable for the debts, liabilities andacts of the corporation. This is called “limited liability.” This is very different from apartnership, where all partners are liable jointly and severally for everythingchargeable to the partnership.

Corporations have stockholders. Limited liability companies havemembers.

The LLC has the limited liability of a corporation.

IRS Examination Coverageof Pass-through Entities,Partnerships and S-Corporations

FiscalYear

Number of AuditCases

Per ThousandReturns

1992 5.1

1993 5.5

1994 5.0

1995 4.6

1996 4.7

1997 5.5

1998 5.7

1999 4.5

2000 3.6

2001 3.5

2002 3.3

2003 3.2

Sources: Report to the IRSOversight Board: Assessment of theIRS and the Tax System,Commissioner Charles O. Rossotti,September 2002; IRS Data Books,FY 2001-2003.

Source: http://www.trac.syr.edu


The Limited Liability Company (LLC) Is A Hybrid Entity

The LLC offers the pass-through taxation of a partnership and the limited liability of acorporation.

CORPORATION LIMITED LIABILITY COMPANY

A Corporation can have one or more Directors andOfficers.

An LLC can have one or moreManagers.

The hostile creditor can take your stock, if he canprove that you own it.

The hostile creditor can ONLY go aftera member’s economic interest in theLLC through the courts. This is calledobtaining a “charging order.”

Once the charging order is obtained, the hostile creditor is now first line for any futuredistributions that are usually paid out to the member(s).

Wyoming Statute 17-15-145. Rights of creditor.

“…The charging order is the exclusive remedy by which a judgment creditor of themember or transferee may satisfy a judgment against the member's interest in alimited liability company.”

The Assets Are Made Unattractive To The Creditor

The manager of the LLC can refuse to distribute the earnings. (If the operating agreement soallows.) What is the advantage of withholding the distribution from the hostile creditor?

This means that the creditor is now liable for income taxes on those LLC earnings, whether ornot they’re distributed. The hostile creditor is now liable for taxes on earnings not yetreceived or for what is typically referred to as “phantom income.” This places the member ina stronger position to negotiate a favorable settlement. Hostile creditors don’t want to paytaxes on earned income that’s out of reach.

For this charging order protection to be most effective, the LLC must

• Have at least two (2) members [Important!]

Managers can be people or another business.

• Be taxed as a partnership

• Be managed by a manager, not the members. [Important!]

Taxed Membe

Member #1: You

Manager of the LLC

WyomingVirtualOffice.com

LLCas Partnership, At Least 2rs, Manager Managed

Member #2: SpousLLC, Family Limited PPartnership, or other

Holds 50% Interest
Holds 50% Interest
e, Children, Corporation,artnership, Limited entity

There are two members that hold a 50% interest in a manager-managed LLC. The totalinterest in the LLC adds up to 100%.

14



Earnings & Distributions & The LLC

Income is earned and distributed from the LLC, according to the members’ respective share or“interest.”

Lawsuit From The Hostile Creditor & LLC Response

Asset protection is like defensive driving; in that, you always leave yourself an “out.” In otherwords, give the assets a path away from the financial and legal threat. This is accomplishedusing one or more corporations or LLC’s.

• Exit Strategy Using An LLC: Your assets are transferred to the LLC in exchange for amember interest. The creditor must now obtain a charging order against your earningsand distributions from the LLC and deal with the phantom income.

LAWSUITHostile creditorobtainscharging orderagainst you

The Manager mayrestrict distributions tothe hostile creditorwho obtained acharging order.Creditor must now paytaxes on “phantomincome.”

LLCTaxed as Partnership, At Least 2Members, Manager Managed

Earnings & Deductions Distributed By Manager

Member #1:You

Member #2: Spouse, Children,Corporation, LLC, Family Limited Partnership,Limited Partnership, or other entity

Earnings are distributed according theshare of the members’ interests.

LLCTaxed as Partnership, At Least 2Members, Manager Managed

LLC Earnings & Deductions

Member #1:You

Member #2: Spouse, Children, Corporation,LLC, Family Limited Partnership, LimitedPartnership, or other entity

Earnings are distributed according theshare of the members’ interests.

Earnings are restricted toMember #1.



THE NOMINEE OFFICER / CORPORATE OFFICER

You control the corporation and the corporation owns the assets.You’re in charge. The nominee officer works for you in the capacity ofDirector, President, Vice President, Treasurer and Secretary. Thisenables you to stay off state records and off the records of databaseresellers.

Many nominee officers are only willing to serve for the initial sixty (60)days. They only intend to provide minimum service in order to satisfy

reporting requirements by the Secretary of State of Nevada or Wyoming. We don't believethis is enough. We offer extensive nominee officer services that include corporate coachingand year-around access to the corporate officer and the necessary services to run thecorporation.

The role of the nominee officer should be as a functional corporate officer that helps you runthe corporation throughout the year. This corporate officer may sign other necessary filings,documents, contracts and leases, as long as a personal guarantee is not required.

Asset Profile, Inc. offers a comprehensive nominee officer service for $300 to$500 per year. Call 484.256.4563 or visit http://www.assetprofile.com for moreinformation.

The duty of the nominee officer is to fill the role of the Director, President, Treasurer andSecretary without revealing the name of the stockholders, and to provide effective businessadministration. The nominee officer fills this role without owning the corporation or its assets.

Attorney-Client Privilege For Privacy For a higher level of protection, hire the nominee officer through the attorney.

Private Investigator for Optimal Privacy Florida has strict rules about the disclosure of client information by private investigators. API in FL can lose his license to practice when releasing client information without a waiver.Consider managing a company through the use of a PI when personal security is involved.This is a superior strategy when your life is at risk, when escaping an abusive spouse, ordangerous persons. The PI cannot be ordered to provide the information since it’s against thelaw to do so. Call “MJ” at Universal Investigations.

Michael JosephUniversal InvestigationAgency No. A20001804185 W. Lake Mary Blvd # 199Lake Mary, FL 327461-877-999-7715 Office407-383-3874 Cell

http://www.assetprofile.com/



NOMINEE OFFICER EIN/NOMINEE EINWhen you apply for the corporation’s bank account, the bank screens your name withChexSystems and with the Office of Foreign Assets Control (OFAC). OFAC is an office underthe U.S. Treasury who prohibits business with persons and countries considered hostile to theU.S. There’s a list of prohibited persons who are disallowed from opening accounts due tosecurity risks. Persons are placed on this list without due process. Every person thatattempts to open a bank account must be cleared through this watch list. They run theEmployer Identification and the name of the corporation, or LLC. And then they run yourname, and social security number through this process. This means that your name is associated with the EIN of the company when applying forthe bank account. Therefore, obtaining a nominee officer EIN is of NO VALUE to privacy.You’re actually better off applying for the EIN on your own when signing on the bank account.

• Please note: Many “nominee” services are promoting false or misleading information.They prefer to charge you several hundreds dollars for an unnecessary service.

• Advisory on the EIN: Nominee officer services that are promoting an EIN service withoutyour social security number is under higher scrutiny by the IRS. The nominee applying forthe EIN’s may face difficulty and all of the EIN numbers as well. Be cautious not to involveyourself in the tax problems of others. In the effort to increase your privacy, you areincreasing the probability of an audit, or worse.

What about an aged EIN? EIN’s are randomized numbers. They are not sequential.Therefore, you really can’t tell if the EIN is new or old. This is a common question by thosewho seek to build corporate credit. If having an "aged EIN" were of benefit, we would apply forthem. Those selling corporate credit programs commonly present this as misinformation.Furthermore, a corporation without an EIN is more likely free from liabilities.


NOMINEE STOCKHOLDERS

Nominee. 1. A person who is proposed for an office, position, or duty. 2. A persondesignated to act in a place of another, usu. in a very limited way. 3. A party whoholds bare legal title for the benefit of others or who receives and distributes funds forthe benefit of others.

Black’s Law Dictionary, 7th Edition

The use of nominee stockholders is actually written into the Wyoming Business CorporationAct. This is a strong statement from the Wyoming legislature respecting the privacy of others.In Wyoming, a share may be registered in the name of the shareholder or a nominee of thatshareholder.

17-16-140. Definitions. (xxii) "Shareholder" means the person in whose name shares areregistered in the records of a corporation or the beneficial owner of shares to theextent of the rights granted by a nominee certificate on file with a corporation;

The corporation may establish the procedure in determining who is the rightful owner of thoseshares.

17-16-723. Shares held by nominees.(a) A corporation may establish a procedure by which the beneficial owner of shares

that are registered in the name of a nominee is recognized by the corporation as theshareholder. The extent of this recognition may be determined in the procedure.

(b) The procedure may set forth:

(i) The types of nominees to which it applies; (ii) The rights or privileges that the corporation recognizes in a beneficial owner; (iii) The manner in which the procedure is selected by the nominee; (iv) The information that shall be provided when the procedure is selected; (v) The period for which selection of the procedure is effective; and

(vi) Other aspects of the rights and duties created.

One share equals one vote. Control of the share, or possession of it, means that you havecontrol of that vote. The share and the vote are separated when a person signs a proxyagreement. A proxy agreement transfers the vote of a share from one person to another. Anirrevocable proxy agreement transfers the stock vote to another person for a period of time.

Example: Mike formed ABC, Inc. He wants someone else to be known as the shareholder but doesn’twant to lose control of the stock votes. Shares are issued to the nominee shareholder. The nomineeshareholder signs an irrevocable proxy agreement agreeing that the votes of those shares areirrevocably transferred to Mike. In this way, Mike remains in control and a nominee shareholder islisted on the corporate records.

BEagutmpri“Mthe

Nominee shareholdertransfers votes to Mike,or Mike’s attorney.

Mike controls votesand the corporation.Nomineeshareholder remainson corporate record.

Corporation issuesshares to nomineeshareholder


NEFIT: Most hostile creditors don’t ask about nominee shareholders and irrevocable proxyreements. Mike is able to maintain control without identifying himself as a shareholder. For

ost privacy, the votes or the shares are issued to Mike’s attorney. The attorney-clientvilege provides a layer of anonymity that’s difficult to pierce unless the corporation orike” has engaged in some fraudulent or illegal act. This approach is not effective against IRS.



What if the person who owns the votes, “Mike” in the above example, wanted to dispute anissue with the corporation itself? A nominee may dissent on behalf of the beneficial owner ofthose shares, according to 17-16-1303. Nominee shareholders can also inspect the corporaterecords, upon the request of the beneficial owner, under 17-16-1602 (f). Seek legal counselabout the strategies reported in this report.

Nominee Stockholders Vs. Bearer Shares Although bearer shares offer an advantage as far as anonymity and simplicity isconcerned, it’s not as effective as the use of nominee stockholders, which enable for someoneelse to be pointed out as supposed owner. Nominee stockholders hold the advantage whenfaced with a well-financed creditor determined on piercing the corporate veil and the shield ofprivacy surrounding the corporation.

The Location Of The Stock LedgerWyoming is unusual in terms of the location of the stock ledger because of the followingreasons:

1. The stock ledger doesn't need to be in the possession of the registered agent.2. The registered agent must not know the location of the stock ledger.

The registered agent must know the names and address of the Director(s) andOfficer(s), as listed on the annual report with the Wyoming Secretary Of State. Thisinformation must be accurate sixty days (60) after filing the annual report.

17-16-507. Duties of the registered agent.(a) The registered agent shall:

(iv) Maintain at the registered office, the following information which shall be currentwithin sixty (60) days of any change until the corporation’s first annual report isaccepted for filing with the secretary of state:

(A) Names and addresses of the corporation’s directors; and(B) Names and addresses of the corporation’s officers.

Counter-productive for privacyMany states require that the stock ledger must be in the possession of the registeredagent.

Nevada privacy is marginalNevada requires that the stock ledger be with the resident agent, or the addresswhere it can be found.

Wyoming privacy is optimalWyoming doesn’t require that the registered agent know of the stock ledger’s location.



STEPS FOR IMPLEMENTATION:

1. Form a new entity or purchase a shelf entity.

New entities are only $170 in Wyoming. Shelf entities cost more but provide a marketingadvantage. The age of a Shelf Corporation or LLC allows for a business owner to say that thebusiness was incorporated in one, two or even three years prior. It's a marketing decisionthat provides a perception of business stability when credibility is part of the sales process.

2. Consider using a Contract Corporate Officer /Nominee Officer

This is a corporate officer that serves the stockholders by signing agreements, contracts, andannual reports with the Secretary of State. This service offers substantial benefit when thestockholders prefer to remain off public record. This is appropriate in a myriad ofcircumstances. Perhaps the stockholders seek to remain distant from the corporation or astockholder was recently divorced. Financial jealousy, competitive intelligence, competitivebidding, technological advantage, and protection from litigation are all legitimate uses for thisservice. Fraud is not. Income tax evasion is not acceptable. Call for more information,484.256.4563.

3. Establish The Corporate Presence

The corporate presence is its tax nexus. The mailing address, street address and phonenumber must exist where the sales are approved. Therefore, a properly formed Wyomingcorporation has a Wyoming mailing address and a Wyoming phone number. The corporateofficer must be available through these points of contact for the corporation.

People often ask if they need to register

4. Maintain Control With Customers & The Corporate Officer

Qwest.com Phone Service: For those business people who receive calls fromprospective clients and customers, a phone number is installed at the Qwest phonecompany (Qwest.com). This market expansion line is call-forwarded to any U.S.number. Therefore, a person can receive calls with a (307) Wyoming area code anddo business from anywhere in the country, or even Canada. This is a great service ifyou're constantly on the go and work from a cell phone.

Vonage.com This is another telephone option. The apparatus attaches to your cablemodem and facilitates national and international toll calls at the fraction of the rate ofregular telephone service. Save money and stay in contact with prospective clientswith Vonage.

Fax: We suggest that you obtain a fax number through Efax.com. Faxes areautomatically forwarded to the email account of your choice. Retrieve the fax as anemail attachment from anywhere in the world.

Address: We provide an office package is available from Gusta, Inc. for only $350per year. It includes a PO Box and business street address in a business building inCasper, WY, a Wyoming fax number and a Wyoming phone number answered by a livereceptionist. The phone is answered in the name of the corporate officer representingyour corporation. Call Gusta, Inc., at 307.237.2580, for more information.

If you're intending to do business out of Wyoming, consider an upgrade to a full officepackage. Do business out of Wyoming with an immediate staff at your fingertips.

Banking: For many years, the Nevada resident agents promoted Nevada bankaccounts to “solidify” the corporate presence in Nevada. This was true years ago buttimes have changed. With the advent of the internet and the proliferation of onlinebanking, it’s no longer necessary to bank where you do business. Internet banks in



Virginia (Etrade.com), Georgia (Netbank.com) and in many other states, are makinghometown banking completely unnecessary.

Two important rules of banking if you live in a high-tax state:

1. Banks, in high-tax states, usually report new accounts to the Secretary ofState and serve in as a “spy” function for the state (California, Texas, NewYork). Consider banking in friendly states that really want your business.

2. For those people concerned with privacy, don’t bank in Wyoming if you’re aWyoming corporation. The annual report must detail all business assets heldin the state of Wyoming. This information is not reportable if the asset isoutside the jurisdiction of Wyoming. This is important when dealing with ahostile creditor or divorce situation.

Sales: An independent contractor or affiliate can sell products and/or services forthe corporation and receive a commission from the Wyoming corporation. You, as theindependent contractor, must pay any applicable state and federal income tax for income paidto you, personally.



C CORPORATION OR LLC? FINANCIAL PRIVACY OR CHARGING ORDER?

Attorneys and accountants commonly favor the LLC due to professional training. This may flyin the face of the goals of the client in several areas. Consider the following issues:

1. Private Creditor vs Public Creditor: Phantom income is an effective deterrent forprivate creditors. A public creditor, such as the Franchise Tax Board in California, isn’taffected by the charging order, since phantom income is not an issue. They’ll just waitfor their money or force the release of distributions. However, they cannot forecloseagainst the member interest of an Alaska LLC.

2. Timing: The corporation approach is effective when you’re not under the gun oflitigation. Consider the charging order protection of an LLC when the litigation isforeseeable. It’s not wise to transfer assets to a privately controlled entity afterreceiving notice of litigation.

3. Divorce: The charging order protection of an LLC doesn’t apply to divorce. Yourmember interest also belongs to your spouse, unless you can argue that it’s separateproperty from the marital assets.

4. Professional Bias: In many instances, the attorney and the accountant are nervousabout providing asset protection services and products because they’re worried aboutthe actions and intent of the client. For this reason, the LLC is most commonlyrecommended. Trading an asset for a member interest in the LLC is hardly consideredfraudulent conveyance and places the professional at ease.

• Most attorneys perceive asset protection an unethical practice. This is a biasedpoint of view since it reduces the amount of accessible assets to the legal industry.

5. Contracting: Contract bidding can carry it’s own requisites. The utility company, orstate agency, may require that the company is a corporation. Limited liabilitycompanies may not apply in certain situations. If bidding to obtain a government orutility contract is important, then choose a corporation. Many times, utility companiesand state governments are behind the times and prefer to deal with only corporations.



FRAUDULENT CONVEYANCE

A creditor can claim fraudulent conveyance if you deliberatelyfrustrated, delayed, hindered or defrauded the recovery of assets topay for a legitimate debt. “Gifting” assets to family or a businessassociate to avoid paying a debt is an example of fraudulentconveyance. The creditor can ask the court to undo the “gift”, orasset transfer, and place the asset back in your hands. The creditorthen takes your control of that asset to satisfy the debt. That’s asimplified explanation of fraudulent conveyance.

Transactions intended to protect assets don't run afoul of fraudulentconveyance issues if structured correctly. Consider these examples:

1. An asset is placed into the LLC for the memberinterest in the LLC. This is considered a "for value" exchange.

2. A privately controlled corporation serves as a supplierto your current business operation or as a friendly creditor. This is fine as longas related party transactions and controlled groups don't apply. Alltransactions must be arms-length.

To avoid a possible fraudulent conveyance claim, consider the following issues:

1. Timing: Move the asset before the threat. Transfer the asset to the corporation orLLC before the threat is even foreseeable. As time passes, the timing of the assettransfer increases credibility of the transaction.

• The biggest threat to asset protection is procrastination.• In cases where the threat exists and you’re left vulnerable, transfer the

threatened assets to an LLC immediately, to take advantage of the chargingorder protection.

• Plan when the financial and legal seas are calm. If turbulence already exists,call 484.256.4563, immediately to discuss your options.

• Involve legal and tax counsel in your business plan.

2. Solvency: It’s critical that you’re able to meet your financial obligations after theasset transfer. In other words, you can’t instantly accumulate thousands in unsecuredand other debt, and immediately run off with the money.

3. Communication: Keep quiet about your holdings and how they are controlled. Manytimes, it’s a best friend, a jealous ex-lover, hostile spouse or frustrated businessassociate that turns on the debtor and points a finger.

4. Fair Market Value: You can’t sell a $100,000 real estate property to a sibling for$10,000. It’s suspicious. Transactions must make sense and follow standard businessprocedure, reasoning, and documentation. Follow the 70% rule. When transferringassets, make certain it’s for at least 70% of its fair market value.

5. Appearance & Intent: If it walks, acts and quacks like a duck, it’s not a goose.Transactions must look reasonable from all directions. Ask yourself these questionswith legal counsel:

• Did the debtor know, or tell anyone, he was going to be sued?• Were financial difficulties or legal problems readily or easily foreseeable?• Was the asset transferred to the trust or corporation?• Does the plaintiff have an interest in the property?• Does the asset transfer or the debtor fall within the statute of limitations of the Bankruptcy

code, UFCA or UFTA?• Did the debtor intend to delay, hinder or defraud a creditor?



• Did the debtor lack adequate financial means to meet his debts after the asset transfer?• How secret was the transaction?• How did the debtor's financial situation change before and after the transfer of assets to the

trust or corporation?• What does the timing or sequence of financial events indicate or imply?• What is the cumulative effect of these transfers?• Are parties in the transactions close friends or family?• Did the debtor flee after he conveyed the property?• Did the asset transfer make up most or all of the assets?• Did he become insolvent after he conveyed the property?• Did he intentionally incur debt that he could not pay?



DELAWARE

Delaware is the best state to incorporate a business when the intent is to trade its stock on anexchange (go public). It’s best suited for medium to large publicly traded companies.Delaware has maintained its lead, in the number of total corporations formed, due to effectivemarketing by the incorporators in that state and by the state of Delaware. Therefore, if yourbusiness is destined to grow into another Fortune 500 company, then Delaware is for you. Incontrast, Wyoming and Alaska best serve small business owners.

DELAWARE LLC WYOMING LLCDelaware LLC is for big business.The Chancery Court is best for thosebusinesses that are publicly held.Big business.

Wyoming is for small business. Smalland privately controlled companies arebest served by a Wyoming LLC. Smallbusiness.

Delaware Series LLC. Delawareoffers the series LLC where you canhave an LLC within an LLC. This isan unproven structure. Mostattorneys don't know how to use it.Those who know charge $350 perhour or more.

Delaware Series LLC's arecomplicated and costly to maintain.

Series LLC not offered in Wyoming.The Wyoming LLC filing fees, and lackof a franchise tax, allow for severalLLC's to be formed and operated whenneeded. Low cost, manageability,flexibility, and the focus on small;business make it a good choice. Easyto understand.

Delaware copied from the WyomingLLC Act.

WYOMING invented the AmericanLLC in 1977, as it was modeled afterthe 1892 German company law knownas Gesellschaft mit beschrnkterHaftung (GmbH). Nevada andDelaware copied Wyoming's LLC andprofited from it most through bettermarketing.

Delaware sells more LLC's becausethey have more incorporators in thatstate. Delaware is best for largecompanies where the stock is tradedon an exchange.

Wyoming only has about 500,000 intheir population and with a handful ofincorporators. The state is low keyand the residents have a great respectfor property rights

Delaware LLC offers the chargingorder protection.

Wyoming LLC offers the charging orderprotection.

COSTSDelaware filing fee for the LLC is$90.

Wyoming filing fee for the LLC is $100.

Delaware franchise tax is $200.Don't forget the Franchise Tax forDelaware LLC's.

Wyoming has no franchise tax.

RENEWALSAnnual Franchise Tax $200 ($100fee is paid late)

No Franchise Tax

Annual filing $0 Annual report $50Registered agent $50 Registered Agent $50



DELAWARE SERIES LLC. Recently, there’s much talk about the Delaware Series LLC. Think of it as LLC’s within alarger LLC umbrella. Incorporators assert that the Series LLC is unique to Delaware, offers anopportunity to place the entire asset portfolio into the LLC, and offers superior assetprotection. Promoters also claim that using the Delaware Series LLC also saves in filing fees since oneentity is used, rather than many of them for different properties.

“REGULAR” DELAWARE LLC The Delaware LLC is a great vehicle for limited liability. In comparison, Wyoming offerslower filing fees and the business environment is hands-off.

PROBLEMSMost attorneys are not familiar on the use of a Delaware Series LLC. This may produce assetprotection benefit. This also means that those attorneys who are skilled in this entity alsocharge much more in legal fees. Incorporators promote this LLC but they really don’t knowhow to use it.

• Conclusion: Consider the Delaware Series LLC if you are willing to paysubstantial legal fees for it’s use and implementation, and when the asset portfolioinvolves many different properties. Otherwise, stay away from the Series LLCformed in Delaware if you’re budget conscious. Remember, you want the optionthat’s best for you considering what you’re willing, and able, to pay. Finally, themaintenance expenses is important to your business plan.



THE ALASKA SOLUTION

The petroleum industry in Alaska prefers the LLC. To characterize Alaska as anti-creditoris an understatement. The LLC protects the Alaska petroleum industry from environmentalliability. Creditors cannot force foreclosure against the member’s LLC interest. Consideringthe wealth, power and influence of the petroleum industry, their use of the Alaska LLC is noaccident. Consider this when assessing if the Alaska LLC provides adequate asset protectionfor your situation. As coincidence, the petroleum industry also utilizes entities formed inWyoming. As an example, look up Flint Hill Resources, LLC, and their associations with thepetroleum industry, and President George H. W. Bush. As a general rule, the strategies of “bigoil” and the politicos also work for the small businessperson.

BENEFITS OF THE ALASKA LLC

Alaska offers a level of asset protection that is supreme to all other LLC’s. Although Wyomingoffers the best balance between asset protection and business environment, the Alaska LLCreigns supreme in the charging order protection. It’s the only state that prohibits theforeclosure against a member’s LLC interest. This means that creditors cannot forceforeclosure of a member’s LLC interest to satisfy a charging order. The Alaska LLC is best foruse as a holding company and for any operation that involves tremendous liability.

Alaska Sec. 10.50.380 (c) (Rights of Creditors) reads as follows,This section provides the exclusive remedy that a judgment creditor of a member or a member'sassignee may use to satisfy a judgment out of the judgment debtor's interest in the limitedliability company. Other remedies, including foreclosure on the member's limited liabilitycompany interest and a court order for directions, accounts, and inquiries that the debtormember might have made, are not available to the judgment creditor attempting to satisfy ajudgment out of the judgment debtor's interest in the limited liability company and may not beordered by a court.

When is the Alaska LLC a good choice for asset protection in serving a smallbusinessperson not living in Alaska?• Situation A:

• The Alaska LLC is not selling or offering anything.• The Alaska LLC holds liens against your house, boat, car, and other assets.

• As an equity stripping function, the Alaska LLC is superior.• Situation B:

• The Alaska LLC is filed in your home state for the function of doing business as astorefront operation, or other business. In states of New York and California, this isnot advisable.

• The home state business is kept cash and asset poor, and the Alaska LLC is used tostrip net worth of the company.• Strip net worth of equipment, buildings, and account receivables.

What disadvantages are offered by an Alaska LLC?• Filing fees with the state of Alaska are higher to form an LLC.

• $250 for the initial filing.• $100 every two years for the biennial reporting.

• Members are disclosed on public record once every two years.• Solutions to deal with this disadvantage:

• The member is disclosed on the public record, and then assigns the interest tosomeone else who is not shown on public record.

• Use another LLC as member of the Alaska LLC.• LLC’s who have members, as corporations, must file an income tax return in

Alaska. The LLC’s must not file an Alaska return if the members are notcorporations.

• Consider using a New Mexico LLC as members of the Alaska LLC.• New Mexico LLC’s have no annual reporting to their Secretary of State.• There are no annual fees for a NM LLC because they are exempt.



• Use NM LLC’s as members. Then file the biennial report in Alaska (onceevery two years). The interest in the Alaska LLC can then be assigned tosomeone else.• This is a similar strategy for use in corporations when they assign

stock votes to a nominee stockholder using an irrevocable proxyagreement.

ALASKA LLC APPLICATIONS

Example #1: Place the house, building, financial asset, or other holding into the LLC. Eachmember contributes an asset for an interest in the LLC.

Example #2: Members own a house, accounts receivable or other asset. The members signa promissory note indenting them to the LLC. This contributing of debt is the capital to theLLC.

• House: A home has $200,000 in equity. The member signs a promissory notecontributing the equity in the home to the LLC. The LLC files a lien against thehome to perfect the debt. The lien is filed with the County of the where the houseis located. The lien protects the interest of the lien and establishes the Alaska LLCas first in line for collection of the lien.

• Account Receivables: A business owner has $300,000 in account receivables.He signs a promissory note agreeing that the business owes the Alaska LLC$300,000. The account receivables are used as collateral for the debt. The LLCfiles a UCC lien against the account receivables to perfect the debt.

A PROMISE TO PAY = PROTECTION A promise of a member to contribute property to the LLC is enforceable. It’s anenforceable promise if in writing and signed by the member. This can provide an advantagewhen facing a lack of planning and assets that are immediately exposed. The Alaska LLC canserve as a friendly creditor. Furthermore, you have an option to pay the creditor of yourchoice. Once the Alaska LLC files liens against your assets, it is the creditor of first priority.

Sleeper/Lazy Asset Protection: Form the Alaska LLC and sign the promissory noteindenting yourself to the company. Make certain that the promissory note isnotarized. If sued, simply allow the Alaska LLC to file the lien against your assets toperfect the debt. The LLC then shows up on public record as a creditor. A hostilecreditor, seeking to collect on a judgment, will have difficulty contesting the lien forthe following reasons:

• The promissory note preceded the conflict with the hostile creditor.• The Alaska LLC is a co-creditor.• You choose which creditor to pay first.

Example: You commit, in writing, to contribute assets to the LLC. The LLC has a right toenforce the contribution, even if you’re facing litigation in an unrelated matter. A promissorynote indenting yourself to the LLC is a contribution to the LLC in exchange for the memberinterest. And the LLC has a right to enforce that contribution to make certain that you followthrough. This means the Alaska LLC serves as a “friendly creditor.”

Sec. 10.50.280. Liability for contributions.

(a) Notwithstanding AS 09.25.010 - 09.25.020, a promise by a member of a limited liabilitycompany to contribute property or services to the company is not enforceable unless the promiseis stated in a writing signed by the member.

(b) Unless otherwise provided in an operating agreement of the company, a member of a limitedliability company is liable for performing an enforceable promise made to the company tocontribute property or services, even if the member is unable to perform because of death,disability, or another reason.



Sec. 10.50.285. Compromise of contribution obligation.

Unless otherwise provided in an operating agreement of the company, the obligation of amember to make a contribution to a limited liability company may not be compromised, unless allof the other members consent to the compromise.

TOOLS NEEDED TO MAKE THIS HAPPEN• Aggressive promissory note that indents you to the LLC

• The promissory note empowers the creditor to enforce collection against thedebtor(you)

• Special operating agreement• Alaska LLC

• Manager-managed• Taxed as a partnership• At least two members



THE SAFE OFFSHORE SOLUTION: AN OUTLINE FOR COMPLETE PROTECTION

OBJECTIVES• Explain to the creditor that it's better to settle out of court than to deal with the charging

order, the expenses of collecting against the interest of an LLC, ambiguity and uncertainty.• Compel the creditor go back to settlement even if he already wins the lawsuit.• Use an offshore jurisdiction, in combination with the US, to increase protection of assets

from the lack of due process, and from abusive collection practices.• Cooperate with the U.S. courts when mandated to provide information, and cooperate with

U.S. court orders. Be 100% truthful all the time.• Maintain sufficient control over accounts in order to prevent fraud, embezzlement, and

unauthorized transfers.• Maintain tax compliance in all areas.• Report everything, as legally required, to avoid penalties and problems with the IRS.• As you may know about the discovery phase in litigation, it's common for your tax returns,

bank statements and other records to be disclosed. Turn this into an advantage.• Use the IRS as leverage to encourage a settlement. In this situation, the IRS is your

friend. The creditor is faces a tax obligation for LLC earnings, and a delayed payment thatmay be indefinite.

STRUCTURE• Utilize a domestic LLC (Wyoming) and an offshore LLC (Panama).• Wyoming LLC

Background on Wyoming LLC:• You and another US person are members/partners of the Wyoming LLC.

• Members can be a natural person, corporation, or any other legal entity.• These three conditions must be met to take advantage of the charging order

protection in the U.S.• The Wyoming LLC is taxed as a partnership.• The Wyoming LLC is manager-managed• There are at least two members in the Wyoming LLC.

• The charging order protection is the key. The creditor ends up paying taxes onearnings, from the LLC, that he hasn't received. This is an excellent tool toencourage your creditor to settle out of court, even after he wins the lawsuit.

• The Wyoming LLC has a street address, PO Box, and a validating fax and phone.• You apply for the EIN of the LLC and you're the signer for the LLC's bank account

in the U.S.• This prevents a fraudulent conveyance claim.

• There is a privacy element. Your name doesn't appear on public record as amanager or member.

• The IRS and the bank identify you as the contact person for the Wyoming LLC. This is important to show that everything is transparent and no fraudulentconveyance is involved.

• The manager of the Wyoming LLC is a Panama LLC.• Panama LLC

The Panama LLC serves as a manager of the Wyoming LLC.• The Panama LLC has a Panamanian attorney as it's manager.• The Panama LLC has a bank account in a well-established Panamanian bank.• You and the Panamanian attorney (or person designated by attorney) are co-

signers of the Panamanian bank account.• Since you and the Panamanian attorney are co-signers, two signatures are

required to transfer funds out of the Panamanian bank account. Onesignature, by either person, is not enough to transfer funds.

• Again, each transfer requires your signature, you have peace of mind thatthe Panamanian attorney is not able to embezzle the funds, and he cannotuse it for an unauthorized purpose.

• Even if you agree to move the funds back to the US, to satisfy a courtorder, the Panamanian attorney may not agree to authorize the transfer. The duty of the Panamanian attorney is to look after the LLC, it's assets,



and the interests of the members. After all, you cannot force the hand oflegal counsel to authorize the funds transfer and neither can the U.S.courts. That's the independent decision of the Panamanian manager. AskMr. Guardia how the creditor must file suit in Panama to courtorder the Panamanian attorney to co-sign the asset transfer.

• You must declare to the US Treasury that you're have at least 50% controlon an offshore account once the balance has a balance of $10,000 USD ormore (form TDF 90.22.1).

• You file the income tax returns of the Panama LLC, as a generalmember/partner.

• The income tax returns, Form 1065 and the K1, are easy and simple tocomplete by a tax practitioner. The tax counsel works for you and can bethe same accountant you currently use.

• Aggressive Operating Agreement of the Wyoming LLC

• We provide an aggressive promissory note and operating agreement. For more onthis, click here.

• Compliance

• All income and assets are reported to the IRS and the US Treasury.• This is simple reporting as a partnership.

WYOMING LLC & THE CHARGING ORDER PROTECTION• You and another US person are member (partners) of the Wyoming LLC.• Funds can be shifted between the Wyoming LLC and the Panama LLC without a

problem.• The manager is a Panama LLC, and chooses when to distribute assets and earnings

from the LLC. Earnings and other distributions can be refused to be distributed, at thediscretion of the manager. This is important.

• If a creditor obtains a charging order against the Wyoming LLC, that means that thecreditor has now placed himself first in line to be paid (before you) until the debt issatisfied. A charging order means that the creditor must be paid first. Anything thatwas supposed to paid to you as a member is now owed to the creditor.

• The manager, as mentioned previously, can refuse to distribute anything from theLLC. Ask your tax advisor how the IRS (Revenue Ruling 77-137) makes the creditorliable for the income earned from the LLC, even though he hasn't received a penny. Here's an example:

• Joe sues you for $200,000 and wins. You have a 50% member (partner)interest in a Wyoming LLC. The Wyoming LLC earned $100,000 in taxableincome. This means that you earned 50% of the $100,000, or $50,000. Butyou owe Joe the $200,000 because of the lawsuit.

• Joe (creditor) is in for an unpleasant result:• The LLC is a manager-managed, and there are at least two

members, and it's tax as a partnership. This means that thecharging order protection applies.

• This means that Joe is liable for paying income on the $50,000in taxable income, even if he hasn't seen a penny of it(according to the IRS). Joe's lawyer isn't going to be happyeither and may demand additional legal fees from the creditor.

• The manager of the LLC can restrict distributions to Joe(creditor).

• Ask your tax advisor about Revenue Ruling 77-137 !!! Thecreditor must pay the taxes on his share of LLC earnings oncehe has the charging order against Mike's interest.

• Joe may go through the effort of trying to compel the managerto release the distributions from the Wyoming LLC.

• Visit this presentation on the LLC charging order protection ifyou're unclear on any of this.



• Wyoming LLC charging protection: Ask your legal counsel onthe wording of this effective statute.

• Let's now consider the manager's position, as an LLC in theforeign jurisdiction of Panama.

PANAMA LLC & THE CHARGING ORDER PROTECTION• You, and another US person, are members (partners) of the Panama LLC.• The manager of the Panama LLC is an attorney.• The Panama LLC has bank accounts in Panama.• The signers of the Panama bank accounts are the US client (you) and a Panamanian

attorney(or someone he assigns to this position agreeable by you).• Both signatures are required to authorize a check, or transfer of outgoing

funds, from Panama.• This prevents the Panamanian attorney from misappropriating the funds. You

have peace of mind that the funds are secure. Again, two people (you and theattorney in Panama), must sign to approve a fund transfer, or a check.

• This also prevents the US client (you) from being compelled to turn over thefunds to an abusive creditor who is violating your due process rights. If you'recompelled to transfer the funds back to the US, you're only doing what he'sordered to do.

• The Panamanian manager of the Panama LLC is not subject to US courtorders.

• The creditor must file his suit in the jurisdiction of Panama and break throughthe attorney-client privilege in that country. This is exceptionally difficult andexpensive to do.

• As this unfolds, the creditor remains liable for all income earned through the LLC thatis not released by the manager.

FAQ• Can the creditor go after the assets in the Wyoming LLC?

• The creditor can only obtain a charging order against your member interest inthe LLC. Example:

• You own a 40% interest in an LLC that earned $60,000 in taxableincome. This means your share of $24,000 is supposed to bedistributed to you, at the discretion of the manager. But since thecreditor has a charging order against your interest, he's first to collecton those funds. The Manager can restrict the distributions to thecreditor. This makes the creditor responsible for the earned income,although he hasn't received any of the distributions. No one wants topay taxes on money that's not in hand.

• The manager can be court ordered, possibly, to release thedistributions to the creditor. This may be exceptionally difficult for thecreditor if the manager is a person outside US jurisdiction, such as aPanamanian LLC.

• Since the Wyoming LLC possesses a short-term amount of cash andother assets, under your signing authority, then those funds can beimmediately used to pay off financial obligations. There may be nofunds in the Wyoming LLC to distribute to this particular creditor. Youcan't be criticized for paying off your US obligations and you choosewhich creditor to pay.

• What tax or other compliance reports are required?• Ask your tax advisor about filing the SS4 forms for an EIN application.

• The Wyoming LLC needs an EIN to be taxed as a partnership• The LLC must be taxed as a partnership to obtain the charging

order protection. And remember that there must be twomembers to the LLC.

• The Panama LLC does not need an EIN to establish a bankaccount in Panama.



• Ask your tax advisor about filing forms 1065 and 1065K1 (K1). Each memberof the LLC must file his or her own income tax returns and declare any taxableincome. See your tax advisor about the forms, tax advice and other taxinformation. These are simple and easy to file by any qualified tax preparer. An offshore LLC, such as in Panama, is simple, quick and easy (according topreparers that are knowledgeable about filing partnership returns).

• File form TDF 9022.1 once you are signer, or co-signer, of any foreign(offshore) bank account that's worth $10,000 USD, or more. Do this by June30th

• Can a court require you to bring the assets back into the US?• In this legal environment, your attorney may tell you that anything is

possible. Ask your lawyer about this approach.• Be completely forthright in all reporting of financial transactions and

asset transfers.• This prevents anyone of accusing you of doing something

fraudulent.• Pay all taxes to the IRS and make certain that partnership returns

(1065 and K1) are filed on time. Always confer with a qualified taxadvisor knowledgeable about partnership returns.

• Cooperate with all demands for information from the court.• This prevents a contempt issue.

• Cooperate with all demands for compliance from the court, in terms ofauthorizing asset transfers back to the U.S.

• This prevents you from being jailed for contempt. Always seeklegal counsel.

• A US court cannot compel compliance from a foreign person. The Panamanian attorney is outside U.S. jurisdiction andcannot be compelled to co-sign the asset transfer.

• The Panamanian bank will demand that both persons (you andyour Panamanian attorney) authorize the asset transfer.

• The funds stay in Panama as long as the Panamanian attorneyagrees to withhold authorization of the asset transfer.

• Where is this plan weak?

• You create your own weaknesses.• Fraud, theft, intent to deceive, illegal activity and other threats

are serious threats that jeopardize the asset protection. Itsimply won't work.

• The attorney in Panama and the US planners won't toleratefraud, theft or illegal activity.

• This plan only works if you don't commit fraud, the money islegal, there's no illicit activity, you file income tax returns forboth LLC's and you pay taxes.

• Where are the tax savings?• There are no tax savings. There is no tax benefit.

• Can you get ripped off using offshore accounts and a Panama LLC?

• You're biggest threat is from the other member/partner. Choosewisely.

• The Panamanian attorney doesn't have access to the funds withoutyour permission.

• Remember that two signatures are required to transfer fundsout of the Panama bank account of the Panama LLC.

• Your signature and that of the Panamanian co-signor.• We chose a competent and ethical attorney in Panama who

has practiced law for many years in Panama City. He's wellrespected and an honorable person.



• What portions of the funds do I place in the Wyoming LLC or the Panama LLC?• You must be able to meet financial obligations in the US and yet

protect the nest egg offshore.

• Is there any privacy?• There is privacy from public records in the U.S. because the Panama

LLC serves as a manager of the Wyoming LLC.• Banking in Panama is private. These banks won't disclose any

information unless it's demanded by the Panamanian courts or thePanamanian Attorney General in criminal situations (moneylaundering, gun running, drug smuggling, terrorism). When it's a civildispute, banks don't disclose this information. Since there is fulldisclosure on the income tax returns, this bank privacy is not a factor. The key remains in the charging order protection, and theinability of forcing the co-signer in Panama, from releasing thefunds to the creditor.

• Again, the protection lies in your ability to move funds to thejurisdiction of Panama to maintain the integrity and security of theaccount so others can't demand it from the bank. They will need tosue you in Panama, and win, to obtain the funds.

• The creditor obtains a copy of your income tax returns (past 3 to 5years). The K1 issued from the Wyoming LLC and the Panama LLC arepart of the returns. This means that the creditor knows of theseassets. This prevents a fraudulent conveyance claim.

• Can I increase my privacy?

• Yes, this is possible through the use of corporations. If necessary,Wyoming corporations can serve as members of a Wyoming LLC. No one would know about your ownership in the corporationsunless you told them. Stockholder information is not collected inWyoming.

• What is included and how much does it cost?

• Panama LLC• Formation• Filing fees• Panamanian attorney• Introduction to stable and well-respected Panamanian bank, and the

opening of the Panama account.• Opening of Panamanian bank account• Attorney co-signs on the application.• Panama virtual office

• Includes live receptionist with general greeting, mail forwarding,street address, PO Box, telephone number.

• Wyoming LLC• Formation• Filing fees• Wyoming Virtual Office

• Includes live receptionist with general greeting, street address, POBox, validating fax and phone numbers, mail forwarding.

• $5000 first year. • Add $1000 in anticipated tax return preparation fees.

• What are the maintenance fees?• $2000 per year covers everything for the Wyoming LLC and the Panama LLC for all

the services combined (not the tax return preparation fees).



• Must I travel to Panama?• Travel to Panama is necessary for the bank interview. The highly-regarded banks

in Panama require this interview.• This will also familiarize yourself with the legitimacy and stability of the banks,

economy, and the political environment.• Take a pleasant trip to a place full of beaches, water, music, culture, sun, the

Panama Canal, fishing, boating and other diversions.

• What types of persons are excluded from this service?• Any person that talks about hiding money from the IRS, illegal activity or hiding

money from their children when paying child support. Any mention of these thingsand we'll drop you, as they say in America, "like a hot potato."

• How do I start?• Contact G.D. Jalil in the U.S., phone (307)237.2580, [email protected]

• Ask questions.• Pick the name of the Wyoming LLC.• Full contact information:

• Guillermo D. Jalil• 123 West First Street, Suite 675, Casper WY 82601• PO Box 2264, Casper WY 82602• office (307) 237..2580, fax (702) 920.8824, cell (484) 256.4563

• The LLC is filed and forwarded to you immediately.• Pay G.D. Jalil $500.00 for his services

• Address the check or money order to:• G.D. Jalil, PO Box 4161, Reading, PA 19606

• You'll receive a Wyoming LLC in the mail with an aggressive operationagreement and promissory note. In addition, mail forwarding and virtualoffice services are provided.

• Contact Roberto Guardia in Panama City, phone + 507.263.3917, [email protected]• From the U.S., call 011.507.263.3917• Ask questions. The attorney will also have questions for you.• Obtain the name of the banks for which you are applying.• Negotiate date of arrival, possible date of the bank interview, and the date

of departure.• Work out any other concerns or questions.• Pick the name of the Panama LLC.• Full contact information:

• LIC. ROBERTO I. GUARDIA R.• ORILLAC, CARLES & GUARDIA, Abogados-Attorneys at Law• Ave Samuel Lewis y Calle 58• P.H. Torre ADR Technologies, Piso 7, Office 7-A• Apartado 0816-04373• Panama 3, Republica de Panama• E-mail: [email protected]• Website: http://www.orcag.com/• Office: 507.263.3917, Fax: 507.263.3924, Cell: 507.612.5429

• Prepare for the bank interview.• It's recommended that you obtain two bank references that are

addressed to the name of the banks for which you are applying. Ageneral "To Whom It May Concern" letter won't do.

• The bank reference letter must state the following:• Your name, or company name• Date the account was opened• The number of digits that reflect the average balance of

the account.• At least four (4) digits.

• The account is in good standing

mailto:[email protected]




http://www.orcag.com/



• You must have at least one bank reference and one reference from yourattorney or accountant.

• The references must not be 30 days days old, or more, for the bankapplication.

• Bring the Wyoming LLC documents with you to Panama. You may needthem for the Panama bank interview, if they ask to see them.

• The Panama bank is concerned about tax evasion and money laundering. • The bank's concerns don't apply to you because you're disclosing

everything to the US authorities and on your income tax return. There's nothing to for the bank to be concerned about.

• Prepare for the trip.• You don't need special electrical extensions because everything is up to US

standards.• People speak English but you should learn a few words of Spanish to be

polite.• Contact your travel agent and schedule your trip, or do it online.• Bring cash for the bank deposits and to pay the attorney. The rest of the

funds can be wired in. If you carry $10,000 or more in negotiableinstruments on your person, then you'll need to declare it on customsforms. Not declaring the funds, when more than $10,000 can lead to theconfiscation of the entire amount on your person.

• For every day you intend to stay in Panama, bring $40 in $1 bills for taxiservice, lunch, and other low cost items.

• Credit cards are accepted everywhere.• Don't make the bank deposit in traveler's checks. Banks charge a fee for

this service.• Visit PanamaG.com for tips on Panama travel.

• What to expect.• Fly into Panama City's Tocumen airport. Mr. Guardia's liaison will meet

you at the airport and retrieve your luggage.• Formalities at the airport are handled according to the laws of Panama.• You're transported, with the liaison, to your hotel. Check in and bring

everything for the appointment with the attorney.• Meet the attorney. Compete part of the bank application. Sign the

memorandum of understanding.• Pay the attorney for his fee, incorporation fees (Panama LLC), bank

application and the virtual office services. $4500.00

http://panamag.com/



IDEAS TO CONSIDER• Choose which creditor you pay first. There’s nothing fraudulent in preferring one creditor

to another.• A company you privately control may file a lien against a valuable asset. This is

considered a friendly lien and must be supported with a promissory note (promise to pay).Make sure the note is well drafted. You can obtain one from a qualified attorney or buyone from an online site offering legal documents. Notes can be sold for cash.• Want to refinance debt? Simply cancel the note and the lien. Consider that during

this period, you’re vulnerable to creditor attack.• Regardless of whether you’re using an LLC or a corporation, a friendly lien held against

an asset is worthless if you appear as the “alter-ego” of the company holding the lien.For this reason, you must not serve as the Director/Manager of the company thatholds the lien against your asset.

• Expect creditors to possess the mindset, “So many debtors, so little time.” This meansthat the creditors are deluged with options as to who they should go after. Even lookingpoor is enough to keep them at bay. Don’t ever appear cocky, arrogant or overconfident.Adopt the role of a poor “sheep in wolf’s clothing.”

• Even if someone files a lawsuit against you, the key is who will first file against a lienagainst your property. Lawsuits take time. And the person files first against a particularasset is the lien of first priority. If the company you control files the lien first, then itbecomes the holder in first priority.

• Each state exempts certain types of assets from collection to satisfy debts. Theseexemptions vary from state to state. Ask legal counsel to identify those exemptions. Youcan look them up at this website: http://www.assetprotectionbook.com/• Always look for an opportunity to turn non-exempt property into exempt property.

This is your prerogative, even when the creditor is snapping at your heels. Anexample of this is a homestead exemption.

• A mechanic’s lien or contractor’s lien against a debtor is not unusual. Forming a companysuch as “ABC Contracting” and allowing it to file a lien against your property may wipe outit’s remaining equity.

WHAT TO AVOID• Never hide assets from a bankruptcy trustee. The FBI investigates bankruptcy fraud.

They are serious and they mean business.• Asset protection is dangerous in the face of bankruptcy.• Never just gift assets to a family member or your spouse. Creditors look for this strategy.



FORMING THE CORPORATION: NEVADA OR WYOMING?

Where you form and operate the corporation is determined bythe following criteria:

1. Business friendly environment

2. The availability of professional management

3. Filing and maintenance fees

4. Security of the corporate veil. The stockholders/members are not responsible for theobligations and liabilities of the company and it is considered a separate person.

Wyoming and Nevada

The Nevada Revised Statutes and the Wyoming Business Corporation Act offer similarflexibility in the ownership of the stock certificates, stock votes, the indemnification ofcorporate officers, and reporting information to their respective Secretary Of State.

A comparison chart is provided on the next page to compare the cost and benefits of aNevada and Wyoming corporations, respectively.

There are two basic differences between Nevada and Wyoming:

1. Wyoming corporations are less expensive to form and maintain than those formed inNevada. Save about 33% to 50% in the formation and administration expenses.

NEVADA WYOMING

Initial List ofOfficers

Filed after incorporating:$125

Not filed: $0

Annual State Filings Annual List of Officers: $125 Annual report: $50

Business License State license: $100 No business license

Registered AgentFee

Average fee $100 Our fee: $50

2. Nevada is better at marketing their corporations and they possess more residentmarketers of incorporation services than Wyoming. As a result, Nevada enjoys morepopularity than Wyoming for incorporation services. Popularity doesn’t equaleffectiveness.

• An Example of Nevada Marketing: Registered agents of Nevada entitiescontinue to promote that Nevada has no information sharing agreement withthe IRS. This issue is more symbolic than real. The most important information isprovided to the IRS when interacting with the federal government and financialinstitutions. This means that how you apply for the Employer Identification Numberand who is the signer on the corporation's bank account, and the identity of thesigner on the accounts is more important in terms of disclosure. Banks in Nevada,and in other states, are subject to federal reporting requirements. As you see, this isan effective marketing strategy for Nevada since most people really don’t think itthrough. Besides, the Nevada Secretary Of State publishes their corporationdatabase online. Employees at the IRS know how to find the Secretary Of Statewebsite. In addition, they can issue a summons to retrieve documents from financialinstitutions to determine the identity of the account holder, transactions and copies ofcancelled checks.



• Wyoming enjoys a pro-business atmosphere, respect for property rights andprivacy. It costs less to incorporate in Wyoming and carries the same benefits asNevada. Wyoming doesn’t collect stockholder information. The state does have aninformation sharing agreement with the IRS; however, stockholder information is notshared since it’s not collected. Delaware also doesn’t collect stockholder information.

California has focused their tax enforcement efforts on theirgeographic neighbor (Nevada) since so many California residentsoperate businesses out of Nevada. Furthermore, California LLC's have noreal limited liability protection. Wyoming respects property rights and theLLC's are the most stable in the country.

3. There are more professional managers in Nevada than Wyoming. These professionalmanagers call themselves “Nominee Officers.” They provide a base of operations for thecorporation in another state and a facet of privacy for those who seek a nominal level ofprivacy. A nominee officer can serve a Wyoming or Nevada corporation from any state.We provide an extremely competitive solution that integrates administrative andmarketing services, as needed. Legal services are available through referral.

WYOMING CORP NEVADA CORPCollects corporate income tax No No

Information sharing agreement withIRS

Yes, WY shares info withthe IRS. Stockholderinformation is notcollected. So this issue ismoot.

No information sharing agreement.This is more symbolic than real inbenefit.

Directors, officers, employees & agentsare indemnified from liability by statute

Yes Yes

Bearer Certificates

Bearer shares notdiscriminated against.Bearer scrip (partialshares in bearer form) isexplicitly permitted.

Not Disallowed

Stockholders revealed to the state No NoNominee shareholders permitted Yes YesOne person can hold position ofDirector, President, Vice President,Treasurer & Secretary

Yes Yes

Capital requirement minimums No NoTax on corporate shares No NoFranchise Tax No NoState Corporate Income Tax No NoInitial Filing Fees $100 $75

Annual Fees $50$125 Annual List Of Officers$100 Business License Fee

Meetings can be held anywhere Yes YesInitial List of Officers filed within 60days

No Yes

Unlimited Stock, no par value Yes NoShares need not be certificated Yes YesContinuance, to adopt a corporationformed in another jurisdiction

Yes No

Unlimited Shares, no par value Yes NoAged Shelf Corporations 2/3 cost of NV ExpensiveResident/Registered Agents $50 per year $85-300 per year



NEVADA PRIVACY MYTHS

Let’s address the following myths of Nevada companies:MYTH #1. Nevada doesn’t have an information sharing agreement with the IRS.On the surface, this is true. Consider these potential problems with this so-called benefit:• Companies in Las Vegas are cursed in that the IRS audit rates are four times than other

parts of the state.• The Secretary of State publishing their information online.• Nevada is known for selling their information to database clearinghouse companies.• Nevada now requires an annual business registration. They demand disclosure of your

name, address, date of birth, and the social security number of all the owners. Anyinformation collected is shared.• Collection for the business registrations are processed by a debt collector in California.

COMPARE: Wyoming only discloses the officers of the corporation, or the manager of theLLC.

MYTH #2. Nevada corporate veil is stronger.• As for all privately held corporations, the corporate veil is generally pierced when the

corporation is used to:• Justify wrong• Protect fraud• Defend crime

• Defeat public convenience• Since most incorporators aren’t talking about the Nevada annual business registrations,

this affects the corporate veil• Those who are attempting to build corporate credit with a company that doesn’t have the

annual business registration will find themselves with a reduced score.• Nevada has no superior strength that Wyoming or Delaware in terms of the corporate veil.

COMPARE: Less paperwork means a reduced opportunity for someone to attack thecorporate veil. Wyoming doesn’t require the annual business registration.

MYTH #3. Bearer shares are possible in Nevada.• So what? The Nevada business registration requires disclosure, under penalty of perjury,

a list of the stockholders and their SSN’s. What’s the point?

COMPARE: Wyoming explicitly allows for bearer shares, bearer scrip (fractional shares),and nominee stockholders. The Secretary of State of Wyoming only asks for a list of theofficers. Stockholder information is not reported.

4. Nevada requires that the stock ledger be kept at the office of the registration, oran address of where it is found.

COMPARE: Wyoming doesn’t require any information about the stock ledger kept with theregistered agent.

Other considerations about Nevada:• Nevada has exploded in population and the state is in the red. They are steadily

increasing fees for filings and are short of a few votes in instituting their own income tax.• Nevada incorporators understand that the state is no longer the best place to incorporate.

They prefer to stay and ride out the marketing wave that supports their industry. Theirlifestyle issues keep them in Nevada.

• Many residents of Nevada are incorporating in Wyoming.



IMPLEMENTATION

Assemble The Team

There are three critical team members that are necessary to puttogether an effective asset protection plan:1. Client2. Attorney/Tax Advisor3. Asset Protection Consultant

Form The Corporation/LLC The entity is formed through an attorney or tax counsel.

File Liens Against Property If required, the nominee officer can serve throughout the year signing certain contractsand leases, filing liens against property as requested by the attorney. The stockholder remainsin complete control behind the scenes as the nominee officer provides the human face for thecorporation or LLC.

Maintain The Corporation/LLC Maintain the corporation and its records to reinforce the corporation’s presence andappropriate adherence to federal, state and local laws. The nominee officer fulfills requests inthe administration of the corporation.

ALWAYS CONSULT A TAX ADVISOR. G.D. JALIL IS NOT A TAX ADVISOR.

TO ORDER, CALL G.D. JALIL AT 484.256.4563 FOR MORE INFORMATION

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