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HOW TO FORM AN LLC IN NEVADA
Nevada is one of the most favoured states to register an LLC and this is more so because the tax climate in this state is considered to be the least burdensome in the nation. This low tax environment along with favourable business laws, a strong infrastructure, and growing economy are some of the Nevada LLC benefits that businesses can leverage.
The Definitive Guide to forming an LLC in Nevada
We are living in the technological age where technology is assisting businesses to achieve higher growth through help in maximising opportunities and executing desired results. There was a time when forming a new business was a time consuming, costly, and relatively inconvenient experience but the times are changing.
Today, you can form a Nevada Limited Liability Company in the fastest possible time, with low business formation cost, and can also benefit from customized business formation services. This is possible because we use technology enabled automated processes to streamline business formation thus catering to exclusive business requirements.
Yes, technology is an integral part of Nevada LLC business formation but at the same time, it is important that you make a well informed decision. There are many aspects to consider like how a Limited Liability Company is formed, the procedures, benefits offered by the state, the need for a Nevada LLC registered agent, documents to be filed to start a business, the fee and annual requirements, and LLC tax. Where will you find this information?
You will find most of the information required to start Nevada LLC over the World Wide Web but the information is vast and spread over multiple sources. We have conducted extensive research to create a Comprehensive LLC Information Guide, which is targeted at helping start-ups, medium businesses, foreign companies, and entrepreneurs in making a decisive choice.
How to form a Nevada LLC?
A Nevada Limited Liability Company (LLC) is the one of the most popular type of business structure especially amongst small businesses or start-ups. The popularity is because of the several advantages it offers to the owner like tax flexibility, limited liability protection, prohibition of personal income tax in Nevada, and high privacy standards to name a few.
What are the requirements to form an LLC in Nevada? Is the process complex? This guide will provide you with all the information in a step-by-step approach starting from naming your company to Nevada LLC search and even LLC laws in the state. The different steps towards formation of LLC in this state are:
1. Check Name Availability
Even before you can register Nevada LLC, you will have to conduct a Nevada LLC search for business name and reserve it for your LLC. You will have to check for name availability and ensure the name contains “Limited-Liability Company,” “Limited Liability Company,” or abbreviations like “L.L.C.,” “LLC”. There are certain rules applicable as well as restrictions regarding the naming of an LLC in Nevada. Click here for an Overview of LLC Name in Nevada.
NOTE: According to NV Rev Stat § 86.176 (2013), you can reserve a business name for a period of 90 days with the Secretary of State.
2. Appoint a Nevada Registered Agent
In order to start Nevada LLC, you will have to appoint and maintain a Nevada LLC Registered Agent pursuant to NV Rev Stat § 86.231-§ 86.261 (2013). Apart from business registration, IncParadise, one of the top business formation service providers offering several additional services including Nevada address and mail forwarding.
3. File Nevada Articles of Organization
You will have to file the “Articles of organization” with the Secretary of State to form Nevada LLC governed by NV Rev Stat § 86.161 (2013).
4. File Nevada Initial Report
According to Nevada LLC Law NV Rev Stat § 86.176 (2013), all limited liability companies formed in the state will have to file an Initial List or Annual Report with the Secretary of State.
5. Establish Company Records
Each LLC in Nevada has to maintain its official records to ensure they are organized and secure. Nevada LLC Article of Organisation is one such document that can be kept secure using an LLC kit. The LLC kit offered by us includes binder, certificates, by laws, embossing seal, operating agreement, sample forms, and transfer ledger.
6. Create the Operating Agreement
Having an operating can be extremely beneficial towards operations of your Nevada Limited Liability Company as it defines the overall structure of the business and contains ownership information. Looking for more information on Nevada Operating agreement?
7. Hold the Organizational Meeting
After you form Nevada LLC, the first meeting held with the members of the company is known as the organizational meeting. You will require the operating agreement and Nevada LLC Article of Organisation to conduct this meeting and the minutes will be stored in the corporate record book provided by IncParadise.
8. Get a Federal Employer Identification Number (EIN)
If your Nevada Limited Liability Company hires employees or has multiple members, then you will have to apply for and obtain an Employer Identification Number (EIN). This Federal Tax ID is issued by the Internal Revenue Service (IRS) and there is no Nevada LLC fees for application of EIN.
You can benefit from our EIN service using the IncParadise order form for setting up an LLC in Nevada.
9. Get Nevada State Tax Identification Numbers
Once you have decided to register Nevada LLC, you will have to apply for the state tax identification number also known as Taxpayer ID or TID. It is a 10-digit number assigned to a business entity by the Nevada Department of Taxation. The TID application has to be filed along with the Nevada LLC Article of Organisation.
10. Choose Electing S-Corp or C-Corp Taxation
If you form Nevada LLC, it will be a pass-through taxation entity but you can always elect S-Corp or C-Corp Taxation. If you elect S-Corp then one of the Nevada LLC benefits is high savings on self-employment taxes. If you elect for C-Corp then you will benefit from a low tax rate on the retained earnings.
11. Get Business Licenses & Permits
Once you have filed appropriate documents for LLC registration in the state of Nevada, you will have to apply for and obtain business licenses and permits. You can visit our Nevada Business License page to identify whether you require a license, permit, or both. A business license or permit ensures you are able to operate in specific industries and regions throughout the state.
Form a Nevada Limited Liability Company
Nevada LLC Benefits
Every state offers a range of advantages to business entities being formed in that state. So, if you are setting up a business in “The Silver State” then there will be several Nevada LLC benefits that your business can leverage. The top 5 benefits include:
- Tax Shelter: One of the foremost benefits for registering a Nevada Limited Liability Company is that the state is a tax shelter. There is no state income, franchise, or corporate taxes and taxes are not levied on corporate profits or shares.
- High Privacy Standards: If you start Nevada LLC then you will be able to benefit from high privacy levels including the fact that a Limited Liability Company is not required to list their owners or members in the state. According to the Nevada LLC Law, an investor in your business will enjoy anonymity.
- Information Sharing Agreement: If you form a Nevada LLC, you can be certain of the fact that formal information-sharing agreement with the IRS is not applicable in this state.
- Business Registration: One of the salient aspects of forming an LLC in Nevada is that the process for registration of a business entity is efficient and fast.
- Unlimited Owners: An LLC in Nevada can have multiple owners as well as investors and they are not required to be residents of the state.
How can you or your business draw greater value from the various Nevada LLC benefits offered by the state programs? IncParadise, as your chosen agent in Nevada not only provides you with services that ensure your benefits are maximized, but also ensures you are well-informed regarding the various state programs that are directed at tax benefits, and financial assistance.
Nevada LLC Registered Agent
Have you been thinking of registering your business entity in Nevada? Are you wondering if the process to form Nevada LLC is complex? This is where the role of a Nevada LLC Registered Agent comes into play. Your chosen registered agent will not only provide business formation services but also guide you through each process.
What is Nevada LLC Registered Agent?
The primary objective and function of a Nevada LLC Registered Agent like IncParadise is to enable service of process and accept any official mail on behalf of the LLC being represented. The added advantage is that a registered agent can assist your business with several other types of services including customized services that are essential for a Nevada LLC to exist and operate within the state.
Why Do I Need A Registered Agent In Nevada?
Nevada is considered as a state that offers pro-business climate and an environment that encourages business growth. Businesses being formed in Nevada are required by the Limited Liability Act to have a registered agent. Even if it was not mandatory, having a Nevada LLC Registered Agent like IncParadise would be beneficial for business entities as certain objectives would be accomplished. Some of the objectives include:
- Service of Process: One of the primary objectives of a Nevada LLC is to ensure service of process. It refers to a legal process through which a business entity is notified that legal action is being taken against the said business.
- Business Documentation: The process to register Nevada LLC can be quite discomfiting since it requires several other sub processes like name search, name registration, providing detailed information for Nevada LLC Article of Organisation etc. A registered agent in Nevada like IncParadise can make the entire process methodical as we have a back office storage system for keeping business documents secure.
- Document Delivery Address: Whether your business entity is from another state or you are planning to form a domestic Nevada LLC, hiring a Nevada LLC Registered Agent like IncParadise will ensure there is a valid physical address or principal place of business so that business documents sent by the state are delivered and maintained.
How Registered Agent helps my LLC in Nevada?
A Nevada LLC Registered Agent like IncParadise will provide a diverse range of services to any business entity – foreign or domestic. A Nevada LLC will receive the following assistance:
- The appointed registered agent will receive legal notices from the state on behalf of your LLC
- Protect your business interests
- Receive a wide variety of business notices from the office of the secretary of the state
- Help a business entity to comply with annual requirements as a part of additional services, which is filing of the Nevada Annual Report within the due date to avoid penalties and keep business active
- Provide a multitude of additional services to Nevada LLC like Amendments of Articles, Certificate of Good Standing, Apostille, help obtain Tax ID etc.
Know more about Registered Agent Services in Nevada!
Nevada LLC Fees – Nevada Forming Fees and Yearly Requirements
There is a process to register Nevada LLC and for filing of any documentation related to the formation. This will require you to pay a fee to the Secretary of State. The question is whether forming an LLC is expensive or not. As a matter of fact Nevada LLC fees are not just dependent on the document being filed but also on the requirement of the process filing to be expedited.
Nevada Limited Liability Company formation will be followed by annual requirements for business entities specific to Nevada State. This will include renewal of business license and filing of Initial List or Annual List of Managers or Members. You will be required to pay Nevada LLC fees during filing of annual lists.
Adding Members to Nevada LLC
Your Nevada LLC Registered Agent can file LLC formation paperwork in the state. Although, owners of LLC’s may feel that having a registered agent file their Nevada LLC formation paperwork ensures keeping the name and address of members from becoming public record; it is not true for the state of Nevada. Every LLC in Nevada requires submitting an annual list of managers and members to the Secretary of State.
You can start Nevada LLC with a single owner or multiple owners. Most states including Nevada allows an owner of a Limited Liability Company to choose managers or members or both to manage the LLC. One of the Nevada LLC benefits is that the owner of an LLC has the power to change the management structure of the entity from members to managers or they can add more members or managers. Once you add members, you will be required to file amended articles of the organization.
Note: An owner of an LLC can add members or managers only if it is mentioned in the initial operating agreement submitted by the business entity. Hence, the management structure can be changed to add more members according to the rules of this operating agreement.
Why You Add New Members and How to Add New Members to LLC
You can start Nevada LLC with a single member but sometimes adding new members can provide the business with a distinct advantage. Single member LLC’s are easy to set up but in the long-term, a business needs to be managed in a manner that the business itself benefits. A growing business will have requirements that may be difficult for a single member to handle and hence adding extra members will enable better management of the entity. When you add members to your LLC, some of the important Nevada LLC benefits are that the new members will also enjoy the same privileges like tax advantages and limited liability.
There is a certain degree of simplicity related to a member-managed entity and this is perfect for small businesses as it will not have a complicated organizational structure. The Nevada LLC benefits of adding more members will enable the organization to handle several departments as well as multitude of employees. A Nevada Limited Liability Company with multiple members or managers will bring in more cohesiveness between employees and departments leading to higher performance and productivity.
If you form a Nevada LLC initially with a single member and if there is a clause in your operating agreement stating that additional members or managers can be added. The process for adding members is as follows:
- Review the LLC Operating Agreement
- Study and approve the change in ownership percentage with existing and new LLC members
- Prepare an amendment to the Articles of Organization or the Operating Agreement
- Formal voting on the amendment in accordance with the rules of the operating agreement
- File Amended Nevada LLC Article of Organisation
- A multi-member LLC will require a federal employer identification number (EIN)
Nevada LLC Law
Is the Nevada LLC Law pro-business? If you are planning to start Nevada LLC or are a foreign LLC transferring to this state then you will be happy to know that the LLC Act makes Nevada a desirable destination for new business formation. What information does the LLC Act in Nevada offer?
The Nevada LLC Law provides information related to the filing requirements necessary to register Nevada LLC with the Secretary of State. The LLC Act refers to 2013 Nevada Revised Statutes, Chapter 86 – Limited-Liability Companies. The laws focus on the following areas:
- Formation of a Limited Liability Company in Nevada
- Filing of Nevada LLC Article of Organisation
- Information pertaining to the formation and operations of a Foreign Limited Liability Company
- Information pertaining to Managers, Members, Non-Economic Member, and Member interest
- Registered Agent and Registered Office
- Annual List
- Operating agreement and Operations
- Information related to Defaulting Companies and Reinstatement
- Liability, Indemnification and Insurance
- Dissolution of Nevada LLC
Apart from the above key areas defined by the Nevada LLC Law, it also contains Miscellaneous Provisions like information pertaining to issuance of occupational or professional license, renewal or revival of charter, waiver of notice etc.
Nevada LLC Asset Protection
According to Forbes, Nevada has been ranked #21 in the list of “Best States for Business” and ranked #9 in Business Costs. The economic climate along with benefit programs for small businesses provides the perfect platform to form Nevada LLC. Among many salient aspects of forming a Limited-Liability Company in Nevada is the asset protection policy that businesses enjoy. You will be surprised to know that Nevada LLC Asset Protection law is considered to be the strongest laws in the nation.
Here is a fact: Forbes Magazine has given asset protection trusts in Nevada an A+ rating. The important aspect is to ensure your asset protection trust is created well in advance as asset protection will work only if your assets have been held in the trust for at least two years.
You can create an “Asset Protection Trust” and combine it with your Nevada Limited Liability Company. This asset protection trust will prevent any creditors of the company or members from seeking any of the assets being held by this trust. Hence, your assets will be completely protected. Although the Nevada LLC law related to forming an asset protection trust became effective on October 1, 1999, many business entities have not been able to utilize it for their asset protection.
Nevada LLC tax
One of the primary reasons to register Nevada LLC is that businesses will be able to leverage the fact that there is no business tax or personal income tax in the state. The tax rate for Nevada LLC’s is also one of the lowest in the nation. It is also important to note that LLCs in this state are considered by IRS as “tax reporting entities” and not tax-paying entities.
The tax rate of a Nevada Limited Liability Company is dependent on the type of business entity it is like:
- An LLC that has a single member will be taxed as a disregarded entity. This translates into the fact that the IRS treats the owner and the LLC as the same entity or person.
- The Nevada LLC is taxed just like a Sole Proprietorship. This refers to the fact that the owner of such a business entity will have to report and pay tax using Form 1040 – personal income tax return.
- If you form a Nevada LLC with 2 or more members then it will be taxed as a Partnership. In such a scenario, the LLC will have to file Form 1065 for federal information return and issue K-1 to each of the member for reporting their share of the profit.
These are considered to be default tax elections in Nevada. You can also opt for S-Corp election so that your Nevada Limited Liability Company is taxed as an S-Corp. There are several Nevada LLC benefits for electing to be taxed as an S-Corp.