Forming an LLC in Nevada
A limited liability company (LLC) is a popular business entity for entrepreneurs. LLCs offer personal liability protection and a flexible tax structure. And Nevada has a few advantages, namely allowing anonymous LLCs. Follow our step-by-step guide to start an LLC in Nevada.
Steps to Forming an LLC in Nevada
Name Your LLC
Naming your Nevada LLC is an essential first step. From a marketing perspective, you want to choose a business name that attracts potential customers to your products or services. From a legal perspective, your LLC name must meet the requirements under state law.
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Under Nevada law, your LLC name must:
- Contain the following words: "Limited-Liability Company," "Limited Liability Company," "Limited Company," "Limited"; or the abbreviations "Ltd.," "L.L.C.," "LLC," "L.C.," or "LC."
- Be distinguishable from the business names registered or reserved with the Nevada Secretary of State.
Additionally, make sure that you don't use restricted words or phrases, such as "accountant" or "bank," without the proper licensing or approval. And don't use words or phrases to indicate your business is an entity other than an LLC.
Business Name Search. Conduct a business entity search with the Nevada business name database when deciding on a name for your LLC. If a name you'd like to use for your business is unavailable, you'll need to choose a different name.
Reserve a Business Name. Once you settle on a name, you can reserve a business name online or by mail using the Name - Reservation, Consent, or Release form and mail it to the Nevada Secretary of State. The state holds the name reservation for 90 days. The cost to reserve a name is $25. It is not mandatory to reserve the name before filing the articles of organization, but you may want to secure the name, so it is available to you.
Get a Registered Agent
You'll need to pick a Nevada registered agent for service of process to meet the legal requirements for forming an LLC in Nevada. A registered agent is responsible for accepting legal documents on behalf of the LLC. However, some business owners choose to use a registered agent service.
When deciding on a registered agent to appoint for your business, there are a few things to consider. The registered agent must:
- Be a Nevada resident
- Be a business entity authorized to do business in Nevada
- Have a physical address in Nevada
File Your Articles of Organization
The articles of organization establish your LLC in the state of Nevada. You submit the following information in the articles:
- Name of LLC
- Name of registered agent
- Address of registered office
- Who will manage the LLC (managers or members)
- Name and address of each manager or managing member
As in most states, you'll need to file articles of organization with the Secretary of State to form your LLC. However, Nevada has a process that allows for the filing of the following documents all in one package:
- Articles of organization
- The initial list of managers, members, or officers
- State business license
Altogether, the cost is $425 for the filing. This filing fee consists of a $75 filing fee for Nevada articles of organization, a $150 filing fee for the initial list, and a $200 filing fee for the state business license. You may file online or download the form for submission.
Draft an Operating Agreement
You'll want to draft an operating agreement for your Nevada LLC, even though you don't need to file it with the state. An LLC operating agreement generally covers topics such as:
- Rights and responsibilities of the members
- Procedures for the admission of new members
- If it is member-managed or manager-managed
- Distribution of profits and losses
- Dissolution procedures
Having this document for your LLC is essential because, without it, you'll have to rely on Nevada state LLC laws in case of a dispute or conflict. Additionally, a lender may ask you for a copy of your operating agreement to secure a loan or line of credit.
Get an EIN
Getting an EIN is a necessary step for most business owners. An EIN (Employer Identification Number) or federal employer identification number is like a Social Security number for your business. The IRS (Internal Revenue Service) assigns these numbers for identification purposes. You can apply for an EIN online for free at the IRS website.
Set Up Business and Tax Accounts
When you file the articles of organization, you can also register your business for tax accounts in Nevada. Consult the Nevada Department of Taxation to determine your LLC's tax obligations. Additionally, if you hire employees, you must set up employer accounts with the Nevada Department of Employment, Training and Rehabilitation and the Department of Business & Industry Industrial Relations (DIR).
You can get more information on tax requirements from the Nevada Department of Taxation. Depending on your business operations, your LLC may be subject to federal tax, state tax, and local tax obligations.
State Business Tax
Nevada does not have a corporate state income tax or personal income tax. Your business, however, will pay federal income tax if you elect corporate tax status. If you do not elect for taxation as a corporation, your company's income will pass through to the member's personal federal income tax return.
However, Nevada has a commerce tax for businesses whose gross revenue exceeds $4 million in a taxable year.
State Employer Tax
If you hire employees, even if the employees are also members of the LLC, you must set up employer tax accounts with the state. Register for a new employer account with the Nevada Department of Employment, Training and Rehabilitation.
- Report new hires within 20 days of the hire date to the DETR
- Register for an employer unemployment insurance account
- Set up a worker's compensation account with the Department of Business & Industry Industrial Relations (DIR).
Sales and Use Tax
There is also a 6.85 percent state sales tax and local sales tax.
Business Licenses and Permits
You must register for a state business license for your LLC. You can do it at the same time you file your articles of organization. The application fee is $200. Depending on your location and type of business, you may need additional licenses and permits. You can determine what license you need through the Nevada Department of Business and Industry.
Registration in Other States
If you want your Nevada LLC to operate in another state, register your LLC as a foreign LLC authorized to do business in that state. Contact the Secretary of State's office in the new state for their requirements. Additionally, if you hire employees and do business in that state, you must register for business and tax accounts.
Instead of an annual report, you must file an Annual/Amended List and State Business Application with the Nevada Secretary of State. There is a $150 fee for the list and $200 for the business license. The annual list is due by the last day of the first month after filing the articles of organization.
If any of your LLC information is outdated, it is important to update it in this filing. You are also responsible for paying all taxes, including commerce, sales, and employer taxes.