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Nevada LLC Taxes

Date: 11/12/2019 | Category: | Author: Martin Pouzar

NEVADA LLC TAXES

A limited-liability company is a form of business entity, often considered to be a private limited company. It provides businesses with numerous benefits including limited liability, flexible management structure and no double taxation on LLC distributions. The working of an LLC in the “Silver State” is governed by the Nevada Revised Statutes and this includes annual requirements and Nevada LLC tax.

Introduction – Nevada LLC Taxes

Nevada is a popular state for business because it has virtually no “state level” Nevada LLC tax. Some of the taxes not applicable to business entities include:

  • Corporate income tax
  • Franchise tax on income
  • Personal income tax
  • Unitary tax
  • Admissions tax
  • Gift tax or estate tax

Of course, there are certain taxes that your limited-liability company may have to file in Nevada. When we talk of federal income tax, an LLC is treated as a pass-through entity. Does it mean such entities are not required to file Nevada business income tax? Yes, it does and for that we need to identify what a pass-through entity really is for tax purposes.

A pass-through entity is basically a type of business structure where the primary goal is to reduce or remove double taxation. A pass-through entity will not be required to file Nevada LLC tax at the corporate level and instead the tax will have to be filed by an individual or owners of an LLC. Thus, the income generated by a limited liability company will be taxed at an individual tax rate.

Here’s an example to help you understand how it works: A Nevada LLC named “DEF” will be a pass-through entity. When this business has to file a tax return then the Nevada LLC tax rate will be as follows:

Revenues – $2,000,000

Expenses – $1,000,000

Earnings Before Interest & Taxes (EBIT) – $500,000

Interest Paid – $200,000

Earnings Before Taxes (EBT) – $300,000

Taxes – $0

Net Income Available to Owners – $300,000

DEF has two owners named Martha and Josh and each of their ownership in the LLC is 50 percent. The LLC will send an IRS Schedule K-1 to both Martha and Josh and this schedule will report their portion of the pass-through income. So, Martha and Josh will file a Nevada LLC tax return with $150,000 as their incomes.

General Information about the Nevada LLC Taxes

Although a limited-liability company is a pass-through tax entity there are other unique aspects of Nevada business income tax as well. LLC is a type of business entity that enjoys the flexibility to choose the tax treatment it wants. It can choose to be taxed as any one of the following:

  • A Nevada LLC can elect to be taxed as an S Corporation. It will require Form 8832 and Form 2553 for the same.
  • It can choose to be taxed as a C Corporation as well using Form 8832.
  • Nevada LLC tax rate can also be defined by it choosing to be taxed as a Sole-Proprietorship and this is possible only for a single member LLC or a disregarded entity.

If a Nevada LLC chooses any of the above tax designations then it will not be able to change the tax treatment for a period of five years. There are finer aspects of Nevada LLC tax that business entities planning to register in the state need to be aware of. Some of them include:

  • If an LLC operates its business in Nevada then it will not be subject to any corporate or individual income tax but if it operates outside the state then it will be subjected to a tax treatment specific to the state it is operating in. Example: If you form an LLC in Nevada and operate your business in Nevada and New York then your business will have to file taxes in New York.
  • Nevada LLC tax has to be filed annually and this can only be filed after you register your business entity with the Secretary of State (SOS)
  • The Nevada LLC tax rate and amount to be filed will depend on the level of business activity and earnings.
  • It is also important to know that if your Nevada LLC has employees and reports gross wages to the Nevada Employment Security Division (ESD) then your limited-liability company will be subjected to modified business tax (MBT). The MBT is a type of Nevada business income tax and came into effect on July 1, 2015 through Senate Bill No. 483. MBT has to be paid to the Department of Taxation.
  • Apart from the modified business tax, Nevada now imposes Commerce Tax on gross revenue pursuant to Nevada Administrative Code, NAC 363C. This tax has to be paid to the Nevada Department of Taxation.
  • If you are a domestic business entity in Nevada but are pursuing business activity in another state then you will be treated as a foreign entity in that state and may be required to file franchise taxes. However, your LLC will not be required to pay any Nevada LLC tax like inventory or franchise taxes in the state.

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Federal Taxes for your Nevada LLC

A limited liability company (LLC) in Nevada with a default tax election means such an LLC is not considered as a tax paying entity but as a tax reporting entity by the IRS. The federal Nevada LLC tax by the Internal Revenue Service can be defined according to the number of LLC Members.

If you form a single-member limited liability company that has not been elected for treatment as a corporation, then such an LLC will be known as a “disregarded entity” for Nevada LLC tax purposes. The activities of such an LLC will be reflected on the owner’s federal tax return.

The Nevada business income tax will depend on the owner of the LLC. The activities of such LLC’s will be reflected according to the owner as:

  • If it is a single owner LLC where the owner is an individual then the Nevada LLC tax rate would be like that of a Sole Proprietorship. The individual would have to file Form 1040 Schedule C, Form 1040 Schedule E, or Form 1040 Schedule F.
  • If the owner of an LLC is another business entity like a corporation or a partnership then the Nevada LLC needs to be reflected on the federal tax return of the owner as a division of business entity (corporation or partnership).

It is important to note that a single member LLC or disregarded entity will be required to use the owner’s social security number (SSN) or employer identification number (EIN) for all federal income tax or Nevada LLC tax purposes.

Nevada State Business License for LLC

The Nevada state business license is an important aspect of Nevada LLC tax as without this license, an LLC will not become operational in the state. The business license is an annual requirement and you can apply for it along with the Articles of Organization. The business license has to be renewed each year when filing LLC annual list.

Nevada State Business Income Tax

Nevada has one of the most competitive business tax climates because there are no corporate income taxes, margin tax, or gross receipts tax. Hence, the state avoids heavy tax burdens that impair business activities and growth. The Nevada business income tax that an LLC has to file is known as the Modified Business Tax (MBT). The primary advantage of the MBT is ease of compliance and simplicity.

The Nevada Modified Business Tax (MBT) is basically a payroll tax that is levied on a limited-liability company irrespective of the number of owners. This Nevada business income tax is levied on those entities that are required to pay the unemployment insurance tax. It is collected on a quarterly basis.

This is a unique tax that exists only in Nevada and MBT has two classifications – general business and financial institutions. The Nevada LLC tax rate for general businesses is 1.475% and 2% for financial institutions on the sum of all wages taxable after deducting the cost of employee health insurance. However, the first $50,000 of gross wages of a Nevada LLC will not be taxable.

It is important to note that even if the wages are less than $50,000 and there is $0 tax due, the tax return has to be filed by the limited liability company. The Modified Nevada business income tax is paid to the Department of Taxation by the last day of the quarter.

Nevada Commerce Tax Return

On June 5, 2015, the Nevada Governor introduced the new “Commerce Tax” effective July 1, 2015 after the approval of Assembly Bill 380 and Senate Bill 483. This Nevada LLC tax also known as commerce tax will be levied on any business entity that has gross revenue of more than $4 million.

A “business entity” for this type of Nevada business income tax includes a partnership, corporation, limited liability company, sole proprietorship, and any other business entity engaged in business activity in the state. However, at the same time a limited-liability company will be excluded from the commerce tax if it derives at least 90% of their federal gross income from specific investment activities. An LLC will also be excluded from commerce tax if it is confined to business activities like owning, maintenance as well as management of intangible investments, including patents, bonds, trademarks, stocks, and trade names.

The Nevada LLC tax rate for commerce tax is based on the North American Industry Classification System (NAICS) and hence varies from 0.051% to 0.331%. Let’s look at an example:

The NAICS code for Agriculture, Fishing, Forestry, and Hunting is 11 and the Nevada LLC tax rate is 0.063%. If the business activity of an LLC focuses on Administrative and Support Services, whose NAICS code is 561 then the Nevada commerce tax rate would be 0.154%. At the same time, it is important to keep in mind that if a Nevada limited liability company is engaged in a business in more than one industry category then the tax rate would be determined by the industry category in which the gross revenue generated is higher.

Local Taxes for your LLC

Nevada has one of the most unique tax systems in the nation. Modified Business Tax exists only in Nevada and apart from commerce tax; there are some local Nevada LLC taxes that may be levied on businesses operating from this state. The different types of local taxes depending on your business activity include:

  • Sales and Use Tax
  • Live Entertainment Tax
  • Local School Support Tax
  • Basic City-County Relief Tax
  • Mines Tax
  • Liquor & Tobacco Excise Tax
  • Insurance Tax
  • Gaming Tax
  • Property Tax
  • Transportation Tax
  • Business License Tax

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Foreign LLC to Register in Nevada

Date: | Category: | Author: Martin Pouzar

FOREIGN LLC REGISTERING IN NEVADA

If you have a limited liability company in New York or any other state except Nevada but are interested in forming a business in Nevada, is it possible? Yes, it is definitely possible and all you have to do is register your existing business as a foreign LLC in Nevada. This guide is intended at providing you with in-depth information about setting up and operating a foreign limited-liability company in Nevada.

What is Foreign LLC in Nevada?

A foreign LLC Nevada is a type of business entity whose primary location of business activity is outside Nevada.

For example: if you have registered a limited-liability company in New York and are planning to sell your services or products in Nevada then you will be required to register your business entity as a Foreign LLC in this state. So basically, your entity is a domestic LLC in New York but in any other state it will be considered as a foreign entity.

There are certain parameters that define if your business is a foreign LLC in Nevada or not. The parameters include:

  • Selling any product or service
  • Having a bank account in Nevada
  • Having a mailing address in this state
  • Owning a warehouse or distribution facility
  • Owning a store
  • A Sales representative in the state

One of the important aspects to consider is that you can start a business activity in the state after approved Nevada LLC foreign qualification.

Steps to register foreign LLC qualification in Nevada

The qualification and formation of a foreign LLC in Nevada is governed by Chapter 86 of the 2017 Nevada Revised Statutes, NV Rev Stat § 86.543 – § 86.5463 (2017). There are several aspects of a foreign business entity that you will need to consider so that you are able to form your business properly. Let’s look at the process through a step-by-step guide.

1. Choose a Name for your Foreign LLC

The first and foremost step towards Nevada LLC foreign qualification is choosing a business name. A foreign limited-liability company has to register their chosen name with the Secretary of State pursuant to NV Rev Stat § 86.546 (2017). When choosing a name, it is important to consider the following:

  • The name of your foreign LLC Nevada should contain words like Limited Liability Company, Limited-Liability Company, Limited Company, or Limited or abbreviations like L.L.C., Ltd., LLC, L.C., or LC. The word Company can also be abbreviated as Co. This name requirement is governed by NV Rev Stat § 86.171 (2013).
  • The name proposed for your foreign LLC in Nevada should be distinguishable from any other name existing on the records of the Secretary of State.

You can reserve the name for a period of 90 days with the Secretary of state. You can run a name availability search to check if your chosen name is available.

2. Application for Registration

The next step is to file an “Application for Registration of Foreign LLC in Nevada” with the office of the secretary of state. This application will ensure, your foreign LLC is formed in the state and your business name is registered. According to NV Rev Stat § 86.544 (2017), the application for registration has to be signed by a manager or a member of the LLC. If the powers are not vested in a member or manager then it has to be signed by any person authorized to sign on behalf of your limited-liability company like a registered agent.

It is important to ensure that the application for registration contains specific information like:

  • The name of the foreign LLC Nevada
  • The jurisdiction and date of its formation
  • A declaration of its existence or certificate of good standing from the jurisdiction where the foreign limited-liability company was formed
  • Name and address of the registered agent of your LLC pursuant to NRS 77.310
  • Address of the business entities office as required to be maintained in Nevada
  • The name and business address of each member or manager

Once the application has been duly filled, it can be submitted by hand or mail with the Secretary of State, 202 North Carson Street, Carson City, Nevada 89701-4201. You can even opt for an expedited service, although the fee would be higher. Alternatively, IncParadise can file it on your behalf.

3. Initial List

Once the Nevada LLC foreign qualification is complete, the business entity will be required to file a list of managers and members and this is known as the initial list. The initial list has to be filed within 30 days of filing an application for registration. You can also file it along with the application for registration.

The initial list has to be filed under the provisions of NV Rev Stat § 86.5461 to 86.5468 (2017) and should contain the name and address of residence or business of each of the managers or members of the foreign LLC in Nevada.

4. Appoint a Registered Agent

A foreign limited-liability company in the state of Nevada should designate and maintain a registered agent pursuant to NRS 77.390 and NV Rev Stat § 86.231 (2017). The primary reason for maintaining a registered agent is to ensure “service of process”. A registered agent is an important aspect of Nevada LLC foreign qualification and can also provide the LLC with an approved physical address where mails and notifications from the Secretary of State can be received.

Note: If a foreign LLC Nevada fails to maintain a registered agent then the Secretary of State can revoke their business or it can lead to dissolution of the legal status of the said business.

A foreign LLC in Nevada will have the option to change their existing agent or hire the services of some of the reputable registered agents like IncParadise. You will be required to file the “Registered Agent Acceptance” form along with the application for registration of foreign LLC.

5. Annual Report and Taxes

One of the important annual requirements post Nevada LLC foreign qualification is the filing of an Annual List or Annual Report with the Secretary of State along with a fee of $150. The filing of the annual list is governed by NV Rev Stat § 86.5461 (2017). The annual list has to be filed on or before the last day of the anniversary month after the filing of the application for registration of a foreign limited-liability company. For example: If you have filed an application for registration on Nov 1,2019 then your annual list or report will be due in November 2020 and you will have to file it prior to Nov 30, 2020.

If a foreign limited liability company fails to file an annual report by the due date then there will be a penalty. If the foreign LLC fails to file 90 days after the due date then the Secretary of State will deem the foreign LLC to be in default pursuant to Nevada Revised Statutes § 116.31155 or 116B.620. This can lead to the business entity losing its Nevada LLC foreign qualification.

In addition to the annual report, a foreign LLC Nevada will be required to pay an annual Business Privilege Tax of $200 as well as file individual income tax returns since it is a pass-through entity.

How IncParadise can help you

IncParadise is one of the most reputable registered agents in the state and has represented more than 10,000 business entities across the nation. We are in compliance with all commercial agent requirements in Nevada as well as Chapter 77 of the Nevada Model Registered Agents Act. We are authorized to receive service of process, demand, or notice as permitted or required by law to be served on your foreign LLC Nevada. We can provide assistance with the following:

  • Provide guidance and information on how to meet Nevada LLC foreign qualification requirements
  • Help with all types of filing requirements including application for registration of foreign LLC
  • Prepare and file taxes, initial and annual list on your behalf
  • Help you to obtain a business license and Tax EIN
  • Help you to obtain a certificate of good standing
  • Provide top of the line customer service for all queries related to forming a foreign LLC Nevada
  • Provide multiple additional services at an extra fee

EASY SET UP OF NEW NEVADA LLC WITH INCPARADISE

Dissolve an LLC in Nevada

Date: 11/07/2019 | Category: | Author: Martin Pouzar

DISSOLVE AN LLC IN NEVADA

There are times when dissolving an LLC in Nevada becomes necessary and it can be because of numerous reasons, personal and business. The formation of a limited-liability company requires several processes and documentation but if you want to wrap up the business, is the process as exhaustive? This guide will provide valuable insight into dissolving a limited liability company in Nevada.

How do you dissolve an LLC in Nevada? How long does it take?

A limited-liability company is an independent business entity and it can continue to exist in Nevada unless it is officially or legally dissolved. If you have taken a decision to close a Nevada LLC then the process needs to be initiated as quickly as possible so that it avoids any legal issues, tax liability or penalties.

There are several reasons for dissolving an LLC in Nevada and certain events require dissolution pursuant to NV Rev Stat § 86.491 (2017). A Nevada limited-liability company can be dissolved in the following situations:

  • If a specific time of dissolution has been specified in the articles of organization
  • If a dissolution should take place due to the occurrence of a specific event as mentioned in the operating agreement
  • Dissolving Nevada LLC upon written agreement or affirmative vote from all the members of the LLC

The process to close Nevada LLC involves filing of dissolution documents with the secretary of state along with liquidating your business assets and settling any liabilities.

The process for dissolving Nevada LLC will take 7-10 business days from the day you file the proper documents. You can speed up the processing by requesting 24 hour, 2 hour or 1 hour processing although there will be a higher fee for the same. You will receive a copy of the confirmation of dissolution through the return service specified in the “Customer Order Instruction” form. Alternatively, IncParadise can assist you through the entire process right from preparing for the filing of the dissolution to ensuring you get a copy of confirmation.

What is the cost of dissolving an LLC in Nevada?

If you want to close an LLC in Nevada then you will be required to file for dissolution with the secretary of state. The filing fee for dissolution is $100 although there will be an extra fee for expediting the process. The fee for a 24-hour expedited service varies from $25.00 to $125.00. If you opt for a 2-hour expedite service then the fee would be $500 and that of a 1-hour expedite service will be $1,000. Apart from this, if you wish to receive a certified copy of the Nevada LLC dissolution then it will be an additional $30.00 per certification.

Steps to Dissolve an LLC in Nevada

If you plan to close a Nevada LLC then there are certain aspects of dissolution you need to be familiar with. There are times when businesses make the mistake of not focusing on certain key areas resulting in the dissolution documents not being accepted by the Secretary of State. These steps will ensure your limited liability company is dissolved in the proper way.

1. Meeting of LLC Members

The first and the foremost step towards dissolving Nevada LLC, is to arrange a meeting among LLC members or owners. There has to be a vote to dissolve the limited-liability company and everyone needs to agree on adopting a resolution to that effect. The resolution must include payment of all outstanding debts, obligations, and distribution of assets.

2. Close Tax Accounts of Your LLC

The second most important step towards dissolving an LLC in Nevada, is to ensure closure of all business tax accounts. An active Nevada limited-liability company may have several tax accounts like Modified Business Tax, Commercial Tax, or Federal Taxes and each of these accounts are maintained by IRS or the State government. Hence, you need to coordinate with the IRS as well as local taxing agencies to ensure all tax dues are cleared.

Some of the common taxes that your company needs to clear before you can close Nevada LLC include:

  • Quarterly or annual employment tax return: This includes the Employee Withholding Tax and is for businesses that have or had employees. Normally businesses are required to file Forms 941 but small businesses withholding federal income taxes less than $1,000 have to file Form 944.
  • Sales & Use Tax: If your business has been selling taxable services or products in Nevada then you need to clear the dues prior to dissolving a Nevada LLC. This is a monthly or quarterly tax that has to be filed with the Nevada Department of Taxation.
  • Unemployment Insurance Tax: Each and every LLC formed in the state of Nevada has to pay unemployment insurance (UI) tax at a rate of 2.95 percent of the wages paid to each of the employees.
  • Career Enhancement Program: Apart from unemployment tax, a limited liability company will be required to pay a tax of 0.05 percent of taxable wages for the Career Enhancement Program (CEP) in order to close a Nevada LLC.
  • Commerce Tax: A limited-liability company will have to pay this tax only if their gross revenue exceeds $4,000,000 in a taxable year.
  • Make federal tax deposits: In order to close a Nevada LLC, you will be required to file the “Employer’s Quarterly Federal Tax Return” using Form 941.

It is important to enclose Employer identification number (EIN) while filing any of the taxes. See Checklist of Taxes in Nevada for dissolving Nevada LLC.

3. Filing Articles of Dissolution

The process of dissolving Nevada LLC starts by filing “Articles of Dissolution” with the Secretary of State. The Articles are to be submitted by a limited-liability company that has opted for voluntary dissolution. The articles need to contain the following information pursuant to NV Rev Stat § 86.531 (2017):

  • The name of the Nevada limited-liability company
  • That the company has already been dissolved or will be dissolved
  • The effective date and time of dissolving the Nevada LLC
  • The type of dissolution or cancellation

The Articles of Dissolution should be signed by a manager or member of the company being dissolved. The signing authority can also be a personal representative of the last remaining member.

The signed articles of dissolution should be filed with the Secretary of State pursuant to NV Rev Stat § 86.541 (2017) in order to close Nevada LLC. The “Articles of dissolution” will become effective when you file it with the Secretary of State or on a later time and date as specified in the articles. This later date should not be more than 90 days after the date on which the articles have been filed.

The filing fee for articles of dissolution is $100 and it can be mailed, faxed or emailed to the Secretary of State. If you are sending by normal or expedited mail then it can be sent to Commercial Recordings Division, 202 North Carson Street, Carson City NV 89701-4201. The secretary of state offers 24-hour, 2-hour, and 1-hour expedited services at a higher fee.

4. Notifying creditors and settling claims if any

If you are dissolving a Nevada LLC, it is important to notify your creditors about the closure of the business. This is an integral part of distribution of assets and is governed by NV Rev Stat § 86.521 (2017). You need to inform creditors about:

  • The intent to close your Nevada LLC or if you have filed the required documents for dissolution
  • If any creditor has an outstanding claim then you will need to provide the mailing address where they can send their claim
  • Provide creditors with a deadline for submitting their claim. The standard is 120 days from the date of notification of dissolving a Nevada LLC
  • Provide a statement that no claims will be entertained after the deadline

The claims made by a creditor may be accepted or rejected by the business entity prior to dissolving a Nevada LLC. If the claims have been accepted then satisfactory arrangements need to be made for repayment.

5. Distribution of Remaining LLC Assets

In order to close a Nevada LLC, the remaining assets have to be distributed amongst the members in proportion to their share of ownership or ownership interests pursuant to NV Rev Stat § 86.521 (2017).

For example: If A owns 40% of the LLC, B owns 35%, and C owns 25% then the assets will be distributed accordingly, which means A will get 40 percent of remaining assets and so on.

These distributions have to be reported to the IRS by filing Form 990, 990-EZ or e-Postcard (990-N). The form you need to file during the dissolution of a Nevada LLC will depend on the assets and gross receipt.

We can file Articles of Dissolution on your Behalf!

DISSOLVE LLC IN NEVADA

How IncParadise helps you

Whether your company is a single-member LLC or has multiple members, dissolving an LLC in Nevada or an active business comes with its own set of problems and documentation including setting of taxes or claims. Apart from this, you also have to ensure that the dissolution is in accordance to the Nevada Revised Statutes § 86.505 – § 86.541 (2017). You will also have to be quite thorough when it comes to filing the articles of dissolution, especially ensuring the required provisions as mentioned in NRS 86.531 have been complied with. Sounds exhaustive?

This is exactly what IncParadise as one of the top registered agents in Nevada can help you with. We have a team of in-house experts who can provide guidance and customized dissolution services to ensure you can close your Nevada LLC with ease.

Order your Nevada LLC dissolution today!

How to Form an LLC in Nevada

Date: 10/14/2019 | Category: | Author: Martin Pouzar

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

The Definitive Guide to forming Nevada LLC
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

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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.

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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. Let’s look at an example:

If you are applying for LLC formation then the fee for filing Nevada LLC Article of Organisation is $75 and there will be a fee for 24-hour expedited processing that can vary from $25 to $125. There is a 2-hour and 1-hour expedited process option available and the fee is $500 and $1000 respectively.

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)

HOW CAN I ADD MEMBERS TO MY LLC?

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.

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Form a Nevada Limited Liability Company

Nevada Business Renewal

Date: 10/01/2019 | Category: | Author: Martin Pouzar

NEVADA BUSINESS RENEWAL

If you are planning to register your new business in the state of Nevada, you will be required to obtain business licenses or state permits as part of the business registration or start-up process. The important aspect is that if you already have a license or permit then Nevada business licence renewal is integral towards ensuring your business remains operational.

INSIGHT INTO NEVADA BUSINESS LICENSE

In some states, business licenses or permits are not required by all types of business entities. In the state of Nevada, a business license can vary according to the type of business. The different categories of Nevada business licence include:

  • General License
  • Privileged License (valid for liquor and gaming)
  • Regulated License

One of the important aspects of a business license is that the type of business and the location of the business will determine whether you require a state license only or a state and county license. There are some businesses that may not require a Nevada business licence at all and can make their business operational by applying for a permit.

A new business registering in Nevada has to check with the State Department of Taxation for determining whether a retail sales permit is required or not. If the type of your business requires applying for city and county licenses then they have to be obtained from the county clerk office or state departments in the city.

License Renewals

Whether you have a license or a permit, it needs to be renewed annually. The Nevada business licence renewal fee is $500 annually for Corporations. The fee is $200 for other types of business entities including a Limited Liability Company. Normally, it is due on the last day of the anniversary month in which the business has originally filed for its license but the same is not true for Title 7 entities.

Nevada business licence renewal date for Title 7 entities like Domestic Corporation or Limited Liability Company will coincide with the due date of filing the Annual List or Annual Report. Similarly, the licence renewal date for sole proprietors and partnerships will be prior to the expiration date that is listed on the business license.

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Annual Requirements for Nevada LLC

Every business formed or registered in the state of Nevada will be required to meet certain annual requirements to enjoy an active status.

If you are planning to form an LLC in Nevada or have already registered your Limited Liability Company, one of the essential characteristics of ensuring smooth business operation is preparing and filing different documents within the due date. As an LLC, you will be required to file Nevada annual report also known as the Annual List and apply for renewal of business license.

Annual List

The Nevada annual report or the Annual List is a document that contains information regarding the business as well as its activities through the previous year. The fee for filing of the Annual List is $150. According to the Nevada Revised Statutes § 86.263, the annual list contains:

  • The name of your LLC
  • The file number of your LLC
  • The names and titles of all managers or managing members
  • The addresses of each of the managers or managing members

Note: If an LLC is unable to file within the due date then they will be charged a late fee of $175. The LLC may also lose its ‘good standing’ status in Nevada.

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Nevada State Business License Renewal

Any Limited Liability Company registered in the state of Nevada will have to file for Nevada business license renewal along with a fee of $200.

One of the important considerations to make is that the Nevada business license renewal fee in counties may be different as there are almost 400 different categories of business activities. Apart from this, counties like Clark County have gross fee license and flat fee license. The renewal fee for “gross fee license” is determined by the amount of gross revenue that has been generated by the said business. The flat fee for license renewal uses a flat rate or it can be determined by numbers like number of rooms in a hotel.

The Nevada business license renewal period in counties is different from that of state licenses. The renewal period in Clark County can be monthly, quarterly, semi-annually and annually depending on the type of license or business.

Note: If an LLC is unable to file within the due date then they will be charged a late fee of $175. The LLC may also lose its ‘good standing’ status in Nevada.

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Annual Requirements for Nevada Corporation

Every business formed or incorporated in the state of Nevada have certain annual requirements that ensure businesses can enjoy a good standing status in the state.

If you are planning to incorporate in Nevada or have already formed a business corporation then in order to ensure your business remains operational, you will be required to prepare and file specific documents annually. As a business corporation, you will be required to file Nevada annual report also known as the Annual List pursuant to NRS 78.150 (2010). Another annual requirement is the filing of business license renewal.

Annual List

A business corporation is required to file the Nevada annual report on or before the last day of the anniversary month of incorporation. The fee for filing of the Annual List is $150. However, the annual list fee for business corporations can vary according to the total number of shares mentioned in the articles of incorporation.

Example: The fee is $150 for shares of $75,000 or less but if the shares are over $1,000,000 then the fee is $400.

The Nevada annual report or the Annual List is a document that contains information regarding the business as well as its activities through the previous year. According to Nevada Revised Statutes § 78.150 (2010), the annual list contains:

  • The name of your business corporation
  • The names and titles of all president, secretary and treasurer
  • The addresses of each of the president, secretary and treasurer

Note: If a business corporation is unable to file within the due date then they will be charged a late fee of $175. The entity may even lose its ‘good standing’ status in Nevada.

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Nevada State Business License Renewal

Although, Nevada business license fee is $500 for initial filings as well as annual renewals; you should check with respective state departments for exact fee amount for permits. The fee will be different for different types of businesses like the fee for business permit for a 40-seater food establishment is $200 but for a bed & breakfast facility, it will be $166. You may also require special permits from other local authorities like Building, Health, Police, or Fire Departments before making your business operational.

Note: If any business entity fails to file their annual Nevada business license renewal fee as required by the due date then there will be a penalty of $100 apart from the annual fee.

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Convert LLC to S Corporation

Date: | Category: | Author: Martin Pouzar

CONVERT LLC TO S CORP

A Limited Liability Company is one of the most popular forms of business because of the limited liability and tax benefits that it enjoys. If an LLC is single owner then it will be taxed as a sole proprietorship and if it has multiple owners then it can be taxed as a partnership or even a corporate entity. You can also choose to convert LLC to S Corp, so that it can enjoy various tax benefits like “Pass-through Taxation”. Let’s try to understand why the conversion to S Corp is beneficial for businesses and how it works.

Why Consider Converting LLC to S Corp?

You have registered your business entity as an LLC, why should you switch to an S Corp? Will it be beneficial in any way? One of the governing factors is the self-employment tax. When the income of your Limited Liability Company increases due to higher profits, there will be an increase in the self-employment tax as well. Although, you are paying higher tax, the ability to contribute to any retirement account will not change and hence, when you convert LLC to S Corp Nevada, there will be definite advantages. Let us take a look at some advantages of converting LLC to S Corp.

S-Corp Distribution

If you convert LLC to S Corp then you will be able to classify a part of your income as salary and a part as distribution. You will still be required to pay self-employment tax on the salary part of your income, but the distribution portion will draw only standard income tax. At the end of the day, how you divide your income will determine if you pay a higher or lower self-employment tax.

Savings from Self-employment tax

When you convert LLC to S Corp Nevada, there are several advantages and this is one of the most sought after. When you have a Limited Liability Company, the income will pass through to you or the owner and this income will attract 15.3% self-employment tax. If you or the owner of the LLC resides in a foreign country then you can benefit from the “Foreign Earned Income Exclusion” but it will minimize your income tax and not the self-employment tax. The moment you convert to an S Corporation, you as the owner can classify a part of the profit as salary and then minimize income tax through the “Foreign Earned Income Exclusion” program. At the same time, the rest of the profit will draw Self-employment tax, the amount of which would be much less.

Retirement savings with S Corp

One of the big advantages of conversion of LLC to an S Corporation is that you will be able to contribute a higher amount towards retirement accounts as having an S Corp helps in setting up of the “Solo K” or the individual 401K. Let us check some of the retirement savings options available when you convert LLC to S Corp Nevada.

  • Solo K – This is also known as the “Individual 401k” or i401k. Normally only those people who have an income that is less than $120,000 are allowed to contribute around $5,500 to a 401k/Roth IRA. The salient aspect is that when you convert LLC to S Corp, you can opt for the Solo 401k wherein you will be able to contribute a maximum of $18,000. Apart from the Roth Solo 401k, you can also contribute a maximum of $36,000 to a traditional Solo 401k. It is important to remember that the contribution is dependent on your salary.

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When you should consider converting your LLC to S Corp?

Once you have taken a decision towards converting your LLC to an S Corporation, what is the next step? It is important to identify the right time for this conversion. The primary reason why businesses convert LLC to S Corp in Nevada is to enjoy tax benefits.

The best time to convert your LLC to an S Corporation would be when the self-employment tax seems to be exceedingly high. If you have a net income of $40,000 then it would be right to convert LLC to S Corp. The decision for conversion is dependent on specific circumstances and several factors like:

  • This is definitely one of the important aspects that you need to consider. You can elect for being taxed as an S Corporation only if you convert LLC to S Corp within 2 months and 15 days after the beginning of the tax year.
  • It is important to focus on the type of business you have. It is an important factor as businesses offering services will be able to benefit from the ability to take a qualified business income (QBI) deduction as well as meet the reasonable salary requirement.
  • One of the factors that will help decide when to convert LLC to S Corp Nevada is the net business income. You have to identify if your net business income is below or above the 2019 Social Security wage base, which is $132,900. If it is above the wage base then as an S Corporation, the owner or shareholder will be able to apply for a 20% QBI deduction.
  • If you convert LLC to S Corp and qualify for “Foreign Earned Income Exclusion (FEIE)” then as the owner, you will be able to exclude a maximum of $104,100 (2018) of their salary from the income tax.

Thinking of LLC to S Corp Conversion? Speak to our Top Expert on Conversions at 702-871-8678.

How do I Change a Nevada LLC to S Corp?

Conversion is a process that will allow a business entity to change the type of entity or even the state of formation or incorporation. This simply means that if you own a Nevada LLC then it can be converted to a C Corporation or an S Corporation. If you choose to convert LLC to S Corp in the state of Nevada then the good news is that the state does not require you to dissolve the existing entity (LLC) for purposes of conversion. Instead, the process of conversion is considered to be just a continuation of the business entity undergoing conversion.

What is the process of converting a Nevada LLC to S Corporation? How does the process work? We have created a guide to help you understand this process.

Conversion Plan

One of the first steps to convert LLC to S Corp Nevada is to create a conversion plan pursuant to NV Rev Stat § 92A.105 (2013). The conversion plan includes specific information like:

  • Name of the LLC electing S Corp conversion
  • Proposed name of the S-corporation
  • State of formation or registration of the LLC
  • Jurisdiction of the law that will govern the resulting entity
  • Terms and conditions related to the conversion
  • Complete text of the incorporation or charter documents of the resulting business entity

The conversion plan should lay emphasis on how the ownership interests in the existing LLC will be converted to the ownership of newly elected S-corporation.

Conversion Voting

Once you have created a plan of conversion, the next step is voting. If you are planning to convert a domestic LLC then the voting to convert LLC to S Corp will be governed by NV Rev Stat § 92A.150 (2013). The plan of conversion has to be approved by those members that own majority of the interest in the current profit of the LLC.

Articles of Conversion

To convert LLC to S Corp Nevada, the plan of conversion has to be approved. Once it has been approved, the resulting business entity will be considered to be a domestic entity and will have to file the following documents with the Nevada Secretary of State pursuant to NV Rev Stat § 92A.205 (2013):

  • Articles of Conversion and it should set forth the name as well as jurisdiction of organization of the constituent entity and the resulting entity
  • The approved plan of conversion to convert LLC to S Corp as adopted by the constituent entity in compliance with the law of the jurisdiction governing the constituent entity
  • Location of plan of conversion, as in whether it is attached with the Articles of conversion
  • The charter or incorporation document of the domestic resulting entity (S Corp) as required by applicable provisions of chapter 78, 78A, 82, 86, 87A, 88, 88A or 89 of NRS
  • The information required pursuant to NRS 77.310, which is name and address of the Registered Agent appointed for service of process.

Conversion Fee and Submission

The fee for filing Articles of Conversion is $350 and it has to be mailed to the office of the Nevada Secretary of State in Carson City. The articles can be submitted through regular as well as expedited mail. In order to convert LLC to S Corp Nevada in the fastest possible time, you can also submit the documents physically at the counter, through fax, and online. You need to provide the “ePayment Checklist” along with the articles.

Note: It is important to provide a forwarding address so that the office of the Secretary of State of Nevada can send copies of process.

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Process of changing an LLC to a Sub S Corp

The subchapter S Corp is basically a closely held corporation that is taxed under the Subchapter S of Chapter 1 of the Internal Revenue Code (IRS) while a Limited Liability Company (LLC) is an entity that is formed under the Nevada State Law. If you own an LLC, you can change the entity’s tax treatment to that of a Sub S Corp without conversion to a corporation. If you wanted to convert LLC to S Corp for tax purposes only then how would the process work?

S Corp for Tax Purposes Only

If you have elected to convert LLC to S Corp Nevada for tax benefits then the process for the same is as follows:

Step 1: File Form 8832

You will be required to file form 8832 with the Department of the Treasury, Internal Revenue Service, so that your LLC can change their default tax classification, which is to be taxed as a Corporation.

Step 2: IRS Form 2553

When you convert LLC to S Corp, you will be required to file IRS form 2553 pursuant to section 1362 of the Internal Revenue Code. This form outlines specifics for qualification of an S Corp and for election to be an S corporation. According to the IRS, business entities eligible for S Corp treatment will be considered as domestic companies that have no alien members, should have fewer than 100 owners/members, and should have one type of stock.

Step 3: File Form 2553

To convert LLC to S Corp Nevada so that your company is taxed as a corporation, you will have to file form 2553 with the Department of the Treasury, Internal Revenue Service. If this form is filed along with individual tax return then the S Corp election will be effective for the tax year for which the return is being filed. If the form is not filed within 2 months and 15 days from the start of the entity’s tax year then the S Corp election will not be effective till the next tax year. Example: If your tax year starts on June 01, 2019 and you are unable to file by August 15, 2019 then the S Corp election will not come into effect till June 01, 2020.

Conversion or Merger

The process to apply for tax benefits if you merge or convert LLC to S Corp is:

Step 1: Business Entity Conversion Form

You need to submit a Business Entity Conversion Form specific to the state.

Step 2: Effectuate a Merger

In a situation where single conversion forms are not available, you will be required to incorporate a new entity and then merge the LLC into the new entity. This process helps in achieving the same effect. The tax basis will be determined by how the interests or assets of the LLC are transferred to the new entity.

Step3: File Form 2553

In order to convert LLC to S Corp or elect S Corp tax status, you will be required to file form 2553.

Are you looking to convert your LLC to S Corp?

IncParadise can help you to convert LLC to S Corp or help you select Subchapter S for ensuring you enjoy tax benefits. We have a team of experts with knowledge of conversion, merger, and S Corp election process. We are one of the top and reliable agents in the state of Nevada and have a reputation of ensuring “customer satisfaction” and “client empowerment using knowledge for better decision making” is our top priority!

We have successfully initiated formation or incorporation of over 10,000 business entities, both foreign and domestic in the Country. Call us today at 702-871-8678, so that we can guide you through the process of converting your LLC to S Corp Nevada.

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