So, can you use Nevada business entities if you are in California? Absolutely. Typically, you need to use a double incorporation strategy. Essentially, one entity is in Nevada and another in California. One entity provides services to other through a fair value contract, to wit, you can’t charge $1 an hour for services rendered. The Nevada entity has to have a business license, office, customary payables such as rent and typical items you find with any business. This strategy is typically used to hold non-tangible business assets such as intellectual property or patent rights.

California has a brutal business climate. The Governator has promised relief, but an actor making promises is, well, an actor making promises. Using Nevada entities can provide relief to your business as long as they are used correctly.

The FTC should be applauded for taking any step to help in fight against identity theft. The flood of recent public disclosures by companies admitting to lost records is appalling. But does this new rule really help?

No.

The new regulation provides no provisions on how long records can be held before being destroyed. This effectively neuters regulation. Any claim of violation is going to be refuted by defense of, “We destroy records every xxx months.” Even if you disagree with this assessment, consider destruction of electronic files.

Electronic files are automatically backed up on hard drives. Merely deleting a file does not erase it from a hard drive. To comply with regulations, are companies supposed to wipe all their hard drives every day or is deleting records enough? Wiping drives is incredibly burdensome while deleting files is useless. As you might imagine, FTC provides no guidance on issue.

Cutting to chase, FTC has issued this rule for one reason – to satisfy Congress. It has little practical impact in protecting your private information and leaves companies with another vague regulatory requirement.