NEVADA LLC LAW
Nevada is one of the few states that provide a business friendly climate and a strong Nevada LLC law that intends to protect a business enterprise and provide valuable information regarding its formation and operation in the state.
An Introduction – Nevada LLC Act
The current Nevada LLC Act is known as the 2013 Nevada Revised Statutes, Chapter 86 – Limited-Liability Companies. Some of the most important laws related to the functioning and existence of a Limited Liability Company were first defined in the Nevada statutes between 1991 and 2001. The Chapter 86 – Limited-Liability Companies were added to Nevada Revised Statutes in 2005.
What does the Nevada LLC Law comprise of? It provides important information pertaining to operations, filing requirements, fees, agents, provisions, business name, registered agent, organizational existence, general powers, operating agreement, management, capital, profit, liability, and dissolution among others.
The primary objective of the Nevada LLC Act is to help businesses to legally operate in the state. The NRS86 of the Nevada Revised Statutes are considered to be pro-business and thus enables a business friendly legal as well as a tax environment. If you are planning to establish your business in Nevada then you will be required to file necessary formation or registration paperwork and meet requirements as specified by the Nevada Limited-Liability Companies Act.
Nevada LLC Name Requirement
The Nevada LLC name requirement is an important aspect of business formation in the state and is governed by Chapter 86 of the Nevada LLC Act. Naming requirements for a business entity can be categorized under two subsections and they are:
- Naming Guidelines
- Name Availability Check
A business name is integral to any organization and is one of the most important aspects of forming an LLC in Nevada. There are certain naming requirements governed by the Nevada LLC Law that businesses will have to comply with. Let us look at the key naming guidelines as set forth in the 2013 Nevada Revised Statutes.
- The name of your business entity must contain phrases like Limited-Liability Company, Limited Liability Company, Limited Company or Limited. The name may also contain abbreviations like L.L.C., Ltd., LLC or LC. The word “company” can also be abbreviated as Co. This is governed by Nevada LLC Act – NV Rev Stat § 86.171 (2013).
- The proposed name of your business entity should be distinguishable from any other name on the records maintained by the Secretary of State.
- The business name should not contain words or phrases that could be confused with government agencies like state departments, treasury, department of taxation etc.
- The Nevada LLC Law, Title 7 of the Nevada Revised Statutes, advocates that the usage of certain words in a business entity name may be restricted.
Note: If you are planning to form a professional limited liability company then the naming guidelines according to Nevada LLC Act must contain specific words and phrases. The name should contain words like Professional Limited Liability Company or abbreviations like “Prof. L.L.C.,” “P.L.L.C.,” or “PLLC”.
Name Availability Check
Once you have identified a business name that is compliant with all requirements of the Chapter 86 – Nevada LLC Act, the next step is to check if the chosen name is available so that you can reserve it with the Secretary of State.
You can use the state portal for Nevada Business Search to check the availability of your chosen business name. In order to accomplish an effective search, you will have to type the business name without any identifiers like L.L.C or LLC as mentioned in Nevada LLC Law. This search will return names that are either the same as chosen by you or similar. Let’s look at an example:
- If you search the name “Ibiscus” and choose the option “Name Starts With” then it will show the result as -“No records found with your search criteria.”
- If you search the name “Ibiscus” and choose the option “Name Contains” then it will show the result as – “Your Search Criteria returns 300 results”. It will show information like Name of the business entity, its status, filing date, type of entity, business ID and entity number.
It is highly recommended to conduct a detailed search using all possible parameters prior to applying for name reservation.
Articles of Organization Requirements
You can form any type of business in the state of Nevada but if you are planning to start a Limited Liability Company then Chapter 86 of the 2013 Nevada LLC Act requires a business to file specific documents related to the formation. The most important document for new business registration in Nevada is Articles of Organization, which has to be filed with the Secretary of State along with the required fee.
There are certain provisions that have been set forth by NV Rev Stat § 86.161 (2013). This chapter of the Nevada LLC Law requires a business entity to provide specific information regarding the organization. The Articles of Organization should contain the following:
- Name of the limited-liability company
- Name and address of the registered agent of LLC to enable service of process
- Name and address of the owners, members or managers of LLC
- Statement providing information of the company being managed by one or more owners, managers, and members.
- Statement providing information setting forth the relative rights, duties, and powers of the series
You can file the Articles of Organization through mail, by hand, and online.
Form your LLC hassle Free with Our LLC formation Services!
Nevada LLC Members Information Requirements
There are several advantages of forming an LLC as the Nevada LLC Act does not require it to follow the same rigorous operational requirements as is the case of a corporation. At the same time, an LLC can have a single owner or multiple owners often known as members. One of the salient aspects of a Nevada LLC is that the state does not require owners or members to residents of the state.
The Nevada LLC Law also allows a Limited Liability Company to employ non-economic members. Such members will not own any portion of the LLC but will still have voting rights of economic members. There are specific Nevada requirements for LLC members governed by NV Rev Stat § 86.291 – § 86.326 (2013) that need to be met and these are:
- Nevada LLC Act states that a Nevada Limited Liability Company should have at least one member or manager
- All members of LLC should be 18 years of age or older
- An LLC in Nevada will have to provide a list of LLC members within 30 days after it has been formed or registered. This list is also known as the Initial List
- Nevada LLC Law requires names and addresses of members to be listed in the Articles of Organization
- The members and their rights, powers, and duties need to be mentioned in the operating agreement.
Asset Protection for Nevada LLC
One of the salient benefits of forming an LLC in Nevada is their “Asset Protection law”. The Nevada LLC Act does not require businesses to list company assets hence a member will not be responsible for any liabilities of the LLC.
In the state of Nevada, a business will enjoy favourable laws related to asset protection and will be able to create an asset protection trust. Since this protection trust is under the purview of Nevada LLC law and Nevada asset protection statutes; it will protect members or the LLC assets from creditors seeking to pursue a legal case.
The Nevada asset protection trust provides protection to a wide variety of assets including personal property, family heirlooms, real estate, bonds, stocks, and cash among other assets. There is another asset protection option and it is known as the “charging order”. The strong and pro-business Nevada LLC Act provides the opportunity to single-owner and multi-owner LLC’s to use the charging order for protecting assets.