Forming an LLC in Nevada
When you start a business, there are countless decisions you need to make to ensure your company's success. One of the first things you should think about is the business structure you'll use. If you decide that forming an LLC works best, you'll need to complete all the necessary formation steps to get your business off the ground.
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Benefits of Forming an LLC
There are many benefits to forming an LLC. One of the main benefits that Nevada LLCs offer is liability protection. Without liability protection, you could lose your personal assets, such as houses or cars, in a lawsuit over a business debt or obligation. Having limited liability can give you peace of mind.
Steps to Forming a Nevada LLC
Forming a Nevada LLC isn't very different from forming an LLC in any other state, but you must comply with Nevada law. Nevada LLC laws address naming requirements, filing requirements, and the ongoing obligations that LLC owners have.
Step 1: Name Your LLC
Naming your LLC is an essential first step because it has both marketing and legal implications. From a marketing perspective, you want to choose a business name that attracts potential customers to the products or services you have to offer. From a legal perspective, you need to ensure that your LLC name meets the requirements under state law.
Under Section 86.171 of Nevada Revised Statutes, 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
Also, make sure that you don't use restricted words or phrases, such as "accountant" or "bank," without the proper licensing or approval. Don't use words or phrases that would indicate your business is organized as any type of entity other than an LLC.
Another important aspect of naming your LLC is checking the Nevada Business Database for name availability. If a name you'd like to use for your business is already taken, you'll need to choose a different name. You can reserve a business name if you find that a name that you like is available.
Step 2: Pick a Registered Agent
You'll need to pick a registered agent for service of process to meet the legal requirements for forming an LLC in Nevada. A registered agent has the duty and responsibility of accepting legal papers on behalf of the LLC. Some business owners choose to use a registered agent service.
There are a few things to consider when deciding on a registered agent to appoint for your business. The registered agent must have a physical address in Nevada and:
- Be a Nevada resident; or
- A business entity authorized to do business in Nevada.
Step 3: File Your LLC Articles of Organization
As in most states, you'll need to file paperwork 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
- Initial List of Officers/Managers/Members
- State Business License
Altogether, there is a cost of $425 for the filing. This filing fee consists of a $75 fee for Articles of Organization, a $150 fee for the Initial List, and a $200 fee for the State Business License. You may file online or download the form for submission.
Step 4: Draft an Operating Agreement
You'll want to draft an operating agreement for your LLC, even though you don't need to file it with the state. An LLC operating agreement generally covers topics such as ownership, rights and responsibilities of the members, procedures for the admission of new members, and the distribution of profits and losses. It's essential to have this document for your LLC because, without it, you'll have to rely on state LLC laws in the event of a dispute or conflict.
Step 5: Get an EIN
Getting an EIN is a necessary step for most business owners. An EIN (Employer Identification Number) or Tax ID 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.
Step 6: Open a Business Bank Account
You'll need to keep your business and personal funds separate to maintain your liability protection. Getting a business bank account will help you to do that. You should also get a credit card and debit card dedicated solely to your business. Be prepared to provide your EIN and copies of formation documents when you open your business bank account.
Frequently Asked Questions (FAQs) About Starting an LLC in Nevada
1. How much does it cost to form a Nevada LLC?
Filing Articles of Organization, the Initial List, and the State Business License application comes to a total of $425.
2. Do you have to file annual reports in Nevada?
Nevada LLC owners must file annual reports (also referred to as an annual list). The annual list is due by the last day of the first month after filing the articles of organization. For foreign LLCs, the list must be filed by the last day of the first month after filing the Application for Registration of Foreign Limited Liability Company.
3. Do I need a business license or permit for my Nevada LLC?
You may need to get a license or permit, depending on the type of business you have and your business's location. It's best to check with state and local officials to ensure that you have all of the necessary permits and licenses for your specific type of business.
4. How do I handle taxes for my LLC?
You can choose how the federal government taxes your LLC. For state taxes, you can get details from the Nevada Department of Taxation.
Note: State laws are always subject to change through new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.
Need Help Forming a Nevada LLC?
Fortunately, forming an LLC can be a straightforward process with FindLaw’s Business Formation Service. However, there may be other legal issues you need to address, such as how you should draft your operating agreement. There are experienced Nevada attorneys near you who can help set you up on the right track. Get in touch with one today.
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