Are you about starting a business in Nevada and want to form an LLC? If YES, here is the legal requirement to start an LLC in Nevada and how much it cost. This article will help you understand how to form an L.L.C. in Nevada. We will show you a step-by-step process on how to create an L.L.C. in Nevada and what you need to do after forming your L.L.C.
Table of Content
- What is an L.L.C.?
- Where is the best place to form an L.L.C.?
- STEP ONE: Choose a Name for Your LLC
- STEP TWO: Hire a Nevada LLC Registered Agent
- STEP THREE: Nevada Articles of Organization, State Business License, and Initial List
- STEP FOUR: Craft Your Nevada LLC Operating Agreement
- STEP FIVE: Apply for an EIN for your Nevada LLC
- STEP SIX: Nevada LLC Annual Requirements
- Step SEVEN: Nevada Municipal and Regulatory Licenses and Permits
- STEP EIGHT: Taxes Requirements in the State of Nevada
- STEP NINE: Open a Nevada LLC Bank Account
- STEP TEN: Obtain a Nevada Business Phone Number
What is an L.L.C.?
L.L.C. is an abbreviation for Limited Liability Company. Creating an L.L.C. is one of the easiest ways to build a wall between your private assets and your company’s financial liability. It helps protect your personal assets if someone sues your company. An L.L.C. offers you the protection you can’t get as a sole proprietorship or General partnership.
An L.L.C. also has some tax advantages; the business itself is not responsible for taxes on its profit. Instead, the members of L.L.C. report their share of business profit and loss on their personal tax returns just the way taxes are reported for a general partnership; this is called “pass-through taxation.” This means a lower tax rate on company profits along with asset protection and tax flexibility. The L.L.C. business structure has a number of other advantages
No Residency Required
Owners of an L.L.C. don’t have to be U.S. Citizens or permanent residents.
Owners of an L.L.C. are given limited liability for business debts.
Partners, suppliers, and lenders may look more favourably on your business when you form an L.L.C.
There is no limit on the number of owners an L.L.C. can possess. Additional members can buy equity in the company.
Less Record Making
With an L.L.C. no annual meeting or minutes books are required.
Gain Access to Business Loans
When you form an L.L.C., your business will begin to build a credit history. This will aid your business access loans.
An L.L.C. combines the assets protection of a corporation with the simplicity of a partnership, which makes it one of the most popular entity structures for small businesses.
Where is the best place to form an L.L.C.?
People venturing into the business for the first time always ask which is the best State to form an L.L.C. There is a lot of hype about creating an L.L.C. in Florida, Alaska, Montana, and Indiana; however, one of the best but less hyped state is Nevada. But it is best you form an L.L.C. in the state where your business will be based.
How to Start an LLC in Nevada in 10 Steps
Forming an L.L.C. in Nevada is a straightforward process and won’t cost you much money. Below are the steps to follow if you want to form an L.L.C. in Nevada.
A Nevada Limited Liability Company (LLC) is a hybrid business structure that offers personal liability protection in case of a lawsuit. In the event your Nevada LLC is sued, your personal assets, that is your home, vehicles, and bank accounts are kept safe from your creditors.
Interestingly, you can make use your Nevada LLC to run a business or you can use your LLC to purchase assets such as real estate, vehicles, boats, and aircraft.
STEP ONE: Choose a Name for Your LLC
Prior to filing your Nevada LLC’s Articles of Organization with the Secretary of State, it is expected that you search the state’s database to make sure your desired LLC name is available for use. Your LLC name must be unique and distinct when compared to other businesses that are legally registered in the state.
Once you come up with a name, you can search your Nevada LLC name using the Nevada Business Name Search Page: https://www.nvsos.gov/sosentitysearch/corpsearch.aspx
As per Nevada state law, NRS 86.171, your LLC name must end with a proper designator. The following are allowed:
- Limited Co.
- Limited Company
- Limited Liability Co.
- Limited Liability Company
N.B: If you’re not sure which designator to use, “LLC” is the most common. It’s also the easiest to recognize. Please note that in Nevada, your LLC name cannot include a designator that makes it sounds like a different type of legal entity:
- P.A. or P.C.
- Professional Association or Professional Corporation
- Non Profit Corporation
STEP TWO: Hire a Nevada LLC Registered Agent
The Nevada Secretary of State requires you to list a Registered Agent in your LLC’s Article of Organization. A Nevada Registered Agent is a person or a company designated to receive notices sent to your LLC, as well as any legal mail (called Service of Process) in case your business is involved in a lawsuit.
Your Nevada Registered Agent must have a physical street address located in the state and PO Boxes are not allowed where Service of Process and other documents can be received. People who are Qualified to be Your LLC’s Nevada Registered Agent are;
- Your LLC can be its own Registered Agent.
- List an office or position within your LLC as the Registered Agent.
- A friend or family member to be your LLC’s Registered Agent.
- To hire a Commercial Registered Agent. Hiring a Commercial Registered Agent is a good idea if you want to keep your address off public records or if you don’t have an address in Nevada.
STEP THREE: Nevada Articles of Organization, State Business License, and Initial List
Nevada LLC filing forms and fees: Articles of Organization ($75), State Business License ($200), and Initial List of Managers or Managing Members ($150).
Please note that in order to form a Nevada LLC, you have to submit 3 documents to the Secretary of State. The Articles of Organization, the State Business License, and Initial List of Managers or Managing Members. This is mandatory. The total filing fee for all three forms is $425.
Method of filing: You can form an LLC in Nevada by mail or online; however, it is advisable to file your LLC online since it has a faster approval time and the process is easier.
Filing your Nevada LLC online requires that you create a SilverFlume account: https://www.nvsilverflume.gov/home
Nevada LLC approval
Your Nevada LLC will be approved immediately when you file online, but it can take 5-10 minutes before your documents are available for download in your SilverFlume account.
After the process, you will see 3 documents available for download and the document will be stamped and approved:
- Articles of Organization
- Initial List of Managers or Managing Members
- State Business License
STEP FOUR: Craft Your Nevada LLC Operating Agreement
A Nevada LLC Operating Agreement is a written contract among the partners of the business that clearly states who owns the LLC and how much of the LLC they own. Your Nevada LLC’s Operating Agreement will also document how the LLC is managed, how profits will be shared, and how taxes are to be paid among other related issues.
Please note that an Operating Agreement should be put in place for both Single-Member LLCs and Multi-Member LLCs located in Nevada.
The fact is that having an Operating Agreement for your Nevada LLC helps prove that the company is a separate legal entity from yourself. This helps maintain the personal asset protection provided by your LLC and is very beneficial to have if you ever end up in court.
“Internal Document”: An LLC Operating Agreement is an “internal document”, meaning, you don’t have to send a copy to the Department of Taxation, the IRS, or any other government agency. You just need to keep a copy of the Operating Agreement with your LLC business records and give a copy to the other LLC Members, if applicable.
STEP FIVE: Apply for an EIN for your Nevada LLC
The next step you are expected to take is to apply for an EIN for your Nevada LLC (Don’t apply for an EIN until your Nevada LLC is approved by the Secretary of State). An EIN (Employer Identification Number) is obtained from the IRS after your Nevada LLC is approved by the Secretary of State. An EIN is also called an EIN Number, FEIN, Federal Employer Identification Number, or a Federal Tax ID Number. They all mean the same thing.
You can liken your Nevada LLC’s EIN Number as the company’s “social security number”. It helps identify your LLC to the IRS for tax and filing purposes. Please note that your Nevada LLC’s EIN will also be used when you open an LLC bank account, register your LLC with the Department of Taxation, and process employee payroll (if applicable).
How is a Nevada LLC taxed: The IRS doesn’t have a specific tax classification for LLCs and instead, a Nevada LLC can be taxed 4 different ways with the IRS; 2 of which occur by default (they occur simply by obtaining your LLC’s EIN), and 2 require a special election to be made (a form must be filed after you obtain your LLC’s EIN). We recommend reading how an LLC is taxed before applying for an EIN for your LLC.
Please note that;
An EIN is free ($0)
The IRS will issue an EIN to your LLC at no cost.
Husband and wife LLC
If you are forming a 2-Member LLC in Nevada you can elect a special type of taxation called a Qualified Joint Venture. This allows a 2-Member LLC (owned by a husband and wife) to be treated as a Sole Proprietorship instead of a Partnership for tax purposes.
EIN Responsible Party
This will be the IRS’s “contact person” when you apply for your Nevada LLC’s EIN. If you have a Single-Member LLC, you will be the Responsible Party. If you have a Multi-Member LLC, any LLC Member can be the Responsible Party. For more information, please see EIN Responsible Party for LLC.
How to Apply for an EIN
There are 3 ways to apply for an EIN for your Nevada LLC. If you have an SSN or ITIN, you can apply for an EIN online. If you apply for an EIN online and you get an error message, you’ll need to apply,with Form SS-4 instead. If you don’t have an SSN or ITIN, you can still get an EIN for your LLC by following these instructions: how to get an EIN without an SSN or ITIN.
STEP SIX: Nevada LLC Annual Requirements
In Nevada, you would need to complete the following requirements every year in order to keep your Nevada LLC in operations and in good standing:
- Renew your State Business License ($200 per year) and
- File an Annual List of Managers or Managing Members ($150 per year)
Both of these must be filed by all LLCs in Nevada, regardless of income or business activity levels. Failure to meet the annual requirements will result in the Nevada Secretary of State placing your LLC into a “Default” status, and then eventually a “Revoked” status.
Both the Nevada LLC State Business License and the Annual List are due on or before the last day of your LLC’s anniversary month. The anniversary month is the month your LLC was approved. For example, if your LLC was approved on May 20th 2023, your State Business License renewal & Annual List will be due by May 31st 2024. Then every year going forward it will be due by May 31st.
How to file
You can renew your State Business License and file your Annual List each year inside your SilverFlume account: https://www.nvsilverflume.gov/home
On the “Documents” page of your SilverFlume account, you’ll be able to download your new State Business License along with a filed and stamped copy of your LLC’s Annual List.
Step SEVEN: Nevada Municipal and Regulatory Licenses and Permits
Apart from the State Business License mentioned above, your Nevada LLC may also need to apply for municipal (county or city), as well as regulatory licenses and/or permits.
Nature of business and location
These two factors will determine which licenses and permits your Nevada LLC may need to apply for.
Common Business Registration
This tool, located within SilverFlume, will help you determine the licenses and permits your Nevada LLC may need, and which municipality and regulatory agency you may need to contact.
After you complete the Common Business Registration, look towards the bottom of your SilverFlume Dashboard. In the “External Tasks” section, you’ll find the information for the municipalities and agencies you may need to contact. You’ll just need to call them, explain what your Nevada LLC will do, and ask them what licenses and/or permits are required.
STEP EIGHT: Taxes Requirements in the State of Nevada
In Nevada, typically, income taxes are paid on 3 levels:
Please note that unlike most states, Nevada doesn’t have a personal state income tax.
Federal income taxes
By default, a Nevada LLC is a pass-through entity which means the profits and losses of the LLC flow through and will be listed on your personal federal income tax return.
- If you have a Single-Member LLC taxed as a Sole Proprietorship, you’ll likely list your business income on a Schedule C as a part of your personal 1040 return.
- If you have a Multi-Member LLC taxed as a Partnership, you’ll need to file a 1065 Partnership Return, issue K-1s to each of the Nevada LLC Members, and then the LLC Members will include the K-1 income on their personal 1040 return.
- The IRS doesn’t have a specific tax classification for LLCs, therefore, Nevada LLCs are taxed based on the number of Members they have. For more information, please read how LLCs are taxed. Additionally, an LLC can elect to be taxed as an S-Corporation to save money on self-employment taxes.
Qualified Joint Venture
Since Nevada is a community property state, a 2-Member LLC owned by a husband and wife can elect to be taxed as a Sole Proprietorship (instead of a Partnership) by making a Qualified Joint Venture election with the IRS.
If your Nevada LLC will sell or transfer tangible personal property in the state, you’re required to collect sales tax.
Sales Tax Permit
If your LLC is required to collect sales tax, then your LLC also needs a Nevada Sales Tax Permit. The cost is $15 per location/storefront.
Commerce Tax Return
All LLCs doing business in Nevada must file this return every year, however, only those businesses that earn $4 million or more must pay the tax. For everyone else, the return will just be “informational” (no tax will be paid).
Other taxes and filings
Your Nevada LLC may also be responsible for filing a Modified Business Tax, Unemployment Insurance tax, payroll taxes, and more.
You’ll need to speak with an accountant to determine all your Nevada LLC’s tax reporting and filing requirements. Figuring out all of your tax filing requirements can be very complicated and if filed improperly, it can lead to penalties, fines, and interest. We recommend working with an accountant to make sure you meet your federal, state, and local tax obligations.
STEP NINE: Open a Nevada LLC Bank Account
Once the IRS has issued an EIN Number to your Nevada LLC, you can open a business checking account. It’s best practice to have a business checking account for your Nevada LLC in order to maintain your personal liability protection.
Using a personal bank account for your LLC is called “commingling of assets” and this can lead to personal liability issues if you end up in court.
Please note that having a separate business bank account for your Nevada LLC also makes record-keeping easier for accounting and tax purposes. Since banks in Nevada have their own rules and regulations, it is recommend calling a few places to determine the following:
- minimum initial deposit
- minimum balance requirements
- monthly maintenance fees (if any)
Required Nevada LLC paperwork
In order to open a business bank account for your Nevada LLC, you’ll need to have the following:
- Articles of Organization (stamped and approved)
- State Business License
- Initial List of LLC Managers or Managing Members
- EIN Confirmation Letter from the IRS
- Photo ID (driver’s license and/or passport)
- Operating Agreement (it may not be needed, but it’s a good to bring anyway)
N.B: Call the bank ahead of time and double-check what documents are required.
If you have a Multi-Member Nevada LLC, all Members that want to be on the bank account should be present when opening the account.
Debit card and credit cards
Most banks will provide a business debit card on the spot after the account is opened. If not, they’ll usually mail the debit card in 1 to 2 weeks.
If you are a non-US resident that has formed an LLC in Nevada, you can still open a U.S. business bank account. You can find more information here: opening an LLC bank account for non-US residents.
STEP TEN: Obtain a Nevada Business Phone Number
International best practices require that you obtain a business phone number for your company as against making use of your own private number. You can get a local Nevada telephone number or you can get a “1-800” number for your business.
There are many options to choose from when it comes to official phone number, but just ensure that you choose a telecom company that will better serve your business.
Forming an L.L.C. in Nevada is not a daunting task. Even after forming it, there are still some things you need to put in place before you commence operation. Please, note that the information in this article is provided only for general purpose and it is no way a legal advice. No lawyer – client relationship is established or should any such relationship be assumed. For legal advice, please consult a professional lawyer.
Frequently Asked Questions
Does Nevada Recognize Corporations?
Yes. A Nevada corporation is incorporated under Chapter 78 of the Nevada Revised Statutes of the U.S. state of Nevada. It is significant in United States corporate law. Nevada, like Delaware, is well known as a state that offers a corporate haven.
Should You Form Your Corporation In Nevada?
If you are looking to form your corporation in the United States, I will advise that you should head to Nevada. As a matter of fact, Incorporating is one of the best decisions you can make as a business owner because it separates you from your business.
What Are The Benefits Of A Corporation In Nevada?
Truth be told, there are loads of benefits you stand to gain when you incorporate your company in Nevada. This state offers a wide range of benefits as a state of incorporation, including its ease of registration, relatively low corporate taxes, and lack of state taxes. Nevada also offers strong privacy protections to business owners and a business-friendly environment.
How Do You Form An S Corp In Nevada?
To form an S Corp in Nevada, you should follow these steps;
- Choose a Name for Your Corporation.
- Draft and File Your Articles of Incorporation.
- Create and File Your List of Officers.
- Appoint Your Registered Agent.
- Create Your Corporate Records Book.
- Create Your Corporate Bylaws.
- Appoint Your Corporate Directors.
- Hold the Initial Board of Directors Meeting
- Issue Stock to Your Shareholders
- Complete Your List of Officers Filing Requirement
- Obtain an Employer Identification Number
How Much Does It Cost To Start An S Corp In Nevada?
Nevada requires corporations to file an Initial List of Officers/Directors and Business License at the time of filing its Articles of Incorporation. The filing fee is $150 for the Initial List and $500 for the business license registration.
What Are The Advantages Of A Nevada Corporation?
Here are some advantages of a Nevada corporation;
- No Corporate Income Tax.
- No Taxes on Corporate Shares.
- No Franchise Tax.
- No Personal Income Tax.
- Nominal Annual Fees.
- Nevada corporations may purchase, hold, sell or transfer shares of their own stock.
What Is The Cost To Form A Nevada Business?
For most people, the cost to form a Nevada Corporation is $725. This breaks down as follows: $75 (or more) for the Articles of Incorporation, $500 for the State Business License (instead of $200 for LLCs), and $150 for the Initial List of Officers and Directors.
Why Have A Registered Agent Form Your Nevada Corporation?
You will need a registered agent to form your Nevada Corporation because State law requires all legitimate, registered businesses to appoint one. The secretary of state will reject your business filing if you don’t appoint a registered agent. A registered agent requirement gives the public and the state a reliable way to contact your business.
How Can You Register A Foreign Corporation In Nevada?
In order to register a foreign corporation in Nevada, you must file a Nevada Qualification to do Business in Nevada with the Secretary of State, New Filings Division. You can submit this document by mail, by fax, in person, or by email.
What Do You Do After Your Nevada Corporation Is Formed?
After your Nevada Articles of Incorporation are approved, you still have a few more important steps to take, including getting an EIN, drafting bylaws, holding your first meeting, opening a bank account, and learning about state reporting and tax requirements.
Does Your Corporation Need A Business License In Nevada?
It will depend on the kind of business you are running, but Nevada requires businesses, with some exceptions, to have a state business license. Some business structures like nonprofit corporations are automatically exempt from obtaining a business license. Please note that you can get a Nevada business license when registering your business through the state’s SilverFlume website.
Do You Have To Live In Nevada To Form An LLC There?
No, this is so because, unlike some states, Nevada does not require members or managers to live in the state itself.
Can Another Business Entity Be A Member Of A Corporation?
Yes! because all states allow for other types of business entities (not only individuals) to serve as members of LLCs. Generally, there are very few restrictions limiting a corporation from being an LLC member. A corporation doesn’t even have to be incorporated in the same state as the one in which the LLC is organized.
How Do You Know If Your Nevada Business Name Is Available?
To know if your Nevada business name is available, you can contact the state business registration office via any of the following contact addresses;
- Search business name availability
- Website: http://nvsos.gov/sos.
- Phone: 775-684-5708.
- Email: [email protected]
- Hours: 8 am – 5 pm, Monday – Friday.
Does Nevada Tax Corporations?
Nevada has no franchise tax and it also has no corporate income tax or personal income tax. The first $50,000 of gross wages is not taxable as a state tax however federal taxes do apply. Nevada also imposes a “Commerce Tax” on businesses with Nevada gross revenue exceeding $4,000,000 within a taxable year.
How Much Does It Cost To Form A Corporation In Nevada?
Basically, Nevada requires corporations to file an Initial List of Officers/Directors and Business License at the time of filing its Articles of Incorporation. The filing fee is $150 for the Initial List and $500 for the business license registration.
How Do You Move Your Business To Nevada?
Here are some options to keep in mind for moving your business to Nevada.
- Register as a Foreign LLC. When you register as a Foreign LLC in Nevada you will be able to continue your LLC in the previous state.
- Dissolve the home LLC and establish a new Nevada LLC.
- Domesticate your Entity in Nevada.
What Is The Corporate Tax Rate In Nevada?
The Combined Corporate Tax Rate is 21.0 percent
How Much Does It Cost To Register An LLC In Nevada?
Basically, the initial cost to set up an LLC in Nevada is $425. Then, the annual costs are $350 per year. In most states, you just have to file an Articles of Organization, however, in Nevada, you have to file an Articles of Organization as well as a State Business License and Initial List of Managers or Managing Members.
How Long Does It Take To Form An LLC in Nevada?
Filing the Articles of Organization can take about two business days online or up to two weeks by mail.
How Much Does It Cost To Start A Corporation In Nevada?
Nevada requires corporations to file an Initial List of Officers/Directors and Business License at the time of filing its Articles of Incorporation. The filing fee is $150 for the Initial List and $500 for the business license registration.
Do LLC Pay Taxes In Nevada?
Interestingly, Nevada is one of only a very few states that does not have a personal income tax or a corporation income tax. Because Nevada also doesn’t have a personal income tax, LLC members generally will owe no state tax on income they earn from a Nevada LLC.
Who Does The Corporate Tax Rate Apply To?
Corporate income tax is imposed at the federal level on all entities treated as corporations and by 47 states and the District of Columbia. Certain localities also impose corporate income tax.
How Do I Start An LLC in Nevada?
- Choose a Name for Your LLC.
- Appoint a Registered Agent.
- File Articles of Organization.
- Prepare an Operating Agreement.
- Obtain an EIN.
- File Annual Reports (Annual List)
What Is The Nevada Personal Net Income Tax Rate?
Nevada has no state income tax
Who Pays Nevada Modified Business Tax?
Every employer who is subject to Nevada Unemployment Compensation Law (NRS 612) is also subject to the Modified Business Tax.
Can I Be My Own Registered Agent In Nevada?
Yes, and this is because any owner or employee of a business can be its registered agent in Nevada as long as they are over the age of 18, and have a street address in Nevada.
Can You Incorporate In Nevada If You Live In California?
Yes, but please note that if your business is not based out of Nevada, you must receive authorization to use the Nevada corporation in your state. For example, a California business that incorporates in Nevada must separately qualify to do business in California.
How Do Corporations Help The Economy?
Large companies can supply goods and services to a greater number of people, and they frequently operate more efficiently than small ones. Large businesses are important to the overall economy because they tend to have more financial resources than small firms to conduct research and develop new goods.
Do People File Taxes In Nevada?
Not really, because since Nevada does not collect an income tax on individuals, you are not required to file a NV State Income Tax Return. However, you may need to prepare and e-file a 2020 Federal Income Tax Return.
How Can You Dissolve Your Nevada Corporation?
In order to successfully dissolve your domestic corporation in Nevada, you submit the completed Certificate of Dissolution and Customer Order Instructions forms to the Secretary of State by mail, fax, email, or in person, along with the filing fee.
What Is The State Filing Fee For An LLC in Nevada?
Nevada requires LLCs to file an Initial List of Members/Managers and Business License at the time of filing its Articles of Organization. The filing fee is $150 for the Initial List and $200 for the business license registration.
When Should I Turn A Sole Proprietorship Into An LLC?
You should turn a sole proprietorship into an LLC As soon as the business has even one paying client, the owner is open to liability and should create an LLC or corporation to provide legal protection. The LLC or corporation provides a separation between the business assets and the personal assets.
34. What Are 3 Advantages Of A Corporation?
The three advantages of a corporation include personal liability protection, business security and continuity, and easier access to capital.
How Long Will It Take To Form Your Nevada Corporation Or LLC?
In Nevada, the time required to process your corporation or LLC formation varies by state with routine processing taking 4 – 6 weeks or even more in the slowest states. Expedited Processing will reduce that time to about 10 business days or less with the exception of just a few states.
What Is The First Step In Forming A Corporation?
File formal paperwork, usually called “articles of incorporation,” and pay a filing fee that ranges from $100 to $800, depending on the state where you incorporate. Create corporate bylaws, which lay out the operating rules for your corporation. Hold the first meeting of the board of directors.
Is Nevada A Business Friendly State?
Absolutely, and as a matter of fact, Nevada is a one-of-a-kind state. It is a business-friendly state with a very low-regulation environment, a streamlined licensing and approval processes, and a favorable tax environment for business and industry. Consistently one of the top 10 most business-friendly states. No corporate income tax.
Should You Hire Northwest Registered Agent?
Yes, the reason being that Northwest offers great customer support and quality registered agent services.
Will The FDIC Insure Money Held By An LLC Or Corporation?
As with consumer accounts, total deposits in eligible business accounts from a corporation, partnership, LLC, or unincorporated organization at a bank are covered up to $250,000. The FDIC does not cover all types of accounts for individuals and businesses.
How Do You Change A Sole Proprietorship To An LLC?
- Check your business name.
- File articles of organization.
- Write an LLC operating agreement.
- Announce your LLC.
- Apply for a new bank account.
- Get business licenses and permits.