The state of Nevada is a popular choice for forming an LLC or other small business entity.
A trademark search on the USPTO site reveals that there are over 1,000 existing active entities with “Nevada” in their titles registered at the Secretary of State’s office (which does not include inactive ones).
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For detailed instructions on how to properly file your documents with the state, visit the Office of Secretary of State’s website at www.sosweb.state.nv.us and choose “Business Entities.”
If you or the entity is located outside of Nevada, you may also register in your home state or any state where you conduct or will conduct business, but it’s not a requirement.
There are three options for forming an LLC in Nevada:
(1) filing a certificate to organize with the Secretary of State;
(2) by filing a certificate of existence with the Secretary of State;
(3) by filing articles of organization with the Secretary of State.
The information below pertains to forming an LLC in Nevada by filing articles of organization.
The 5 Steps to Form an LLC in Nevada:
Step 1: Name your Nevada LLC.
To do so, your LLC name must contain the words “limited liability company” or the letters “LLC.”
It cannot contain the following:
- The word corporation, unless it’s part of another proper noun such as Incorp. Corp., Corporation de Nevada, N.V.;
- A term that includes or ends with a numerical or foreign abbreviation with no letter (e.g., 11, Inc., LLC, 2nd Floor);
- A geographical reference;
- The words bank, trust, trustee, building and loan association, credit union, or any other financial institution;
- Any word that implies the issuer is a public entity;
Step 2: Appoint a registered agent in Nevada.
Registered agents are responsible for receiving and forwarding an official mail to the company.
Registered agents include a physical address, so if you don’t have an operating location, you may choose your business address or home address.
The Secretary of State provides an annual list of all registered agents in Nevada online at www.sosweb.state.nv.us under “Business Entities / Registered Agents.”
The registered agent must:
- Be located in Nevada
- Have a current physical street address
- Have a valid phone number and email address
- Accept government correspondence on the company’s behalf and provide mail forwarding.
How much do registered agent services cost?
The state of Nevada charges $85 per year for the registration registered agent fee. This does not include additional fees charged by the company that you have to choose as a registered agent.
Step 3: File Nevada Articles of Organization.
Articles of organization are required when forming an LLC in Nevada.
The articles of organization must contain:
- Your company’s name and purpose;
- The location of your business (city or town);
- If a foreign entity, the applicant’s jurisdiction of incorporation;
- The payment as specified by law.
You may download the articles of organization form online at www.sosweb.state.nv.us and pay for it through the Secretary of State’s website (payment options include e-check, credit card, and electronic funds transfer).
The completed articles must be filed with the Nevada Secretary of State in Carson City with the address below:
Nevada Secretary of State, Business Entities Division, 555 Wright Way, Suite 3100, Carson City NV 89701
The cost for filing your articles is $75 plus a $15 processing fee.
Step 4: Create an operating agreement.
Many experts suggest creating an operating agreement to govern how your LLC in Nevada will operate.
The operating agreement establishes the roles and responsibilities of each member in accordance with their percentage ownership interest in the company.
This is a critical document that should be professionally drafted and can serve as evidence that your business entity has complied with all state laws pertaining to corporations, LLCs, and limited partnerships.
The Secretary of State’s website at www.sosweb.state.nv.us provides the forms for operating agreements online under “Business Entities / Operating Agreements.”
Step 5: Apply for an EIN.
Corporations, LLCs, and limited partnerships all require their own tax identification number called an Employer Identification Number (EIN).
If you are required to withhold taxes for any employees or independent contractors, or if you need to report your business income on your personal income taxes, you must get an EIN.
You may apply for one online at www.irs.gov.
There is no fee for an EIN if you apply online. Contact the IRS to obtain a paper Form SS-4, Application for Employer Identification Number, available in English and Spanish by calling 1-800-829-3676 (toll-free), or downloading the form at www.irs.gov.
Pros and Cons of Running a Nevada LLC
- Flexibility to create your own operating agreement;
- Nevada LLCs can conduct business in any U.S. state and foreign country without filing additional paperwork;
- Your business name is protected and unique.
- Tax savings if your LLC is taxed as a partnership instead of a corporation (note: many small businesses are taxed this way);
- You control the management of your business (individuals or corporations cannot own more than 49 percent of your company, making it impossible for a potential creditor to force them to take over management);
- If you have less than $100,000 in annual revenues, filing as a Nevada LLC could save you time and money by avoiding the corporate formalities required of larger businesses.
- No annual reports or fees to maintain your company’s existence as long as you have filed articles of organization with the state(this eliminates a lot of bookkeeping and record-keeping).
- An LLC does not require an office, so you can form a Nevada LLC from anywhere in the world. You can even run your company from home and still form an LLC.
- The cost to start an LLC in Nevada is the most expensive in the country at $350 plus any additional filing fees;
- You may need to form your business in another state or foreign country if you want to:
1) Convert your business from an existing company to an LLC;
2) Sell ownership interests in your firm after formation
- Double taxation for certain members with more than one membership interest in the same company (i.e., real estate investments and LLCs).
- Out-of-state residents may need to check with the applicable state for tax qualifications.
HOW MUCH DOES IT COST TO FORM AN LLC IN NEVADA?
The cost to start a new LLC in Nevada is $350 for filing fees and applicable sales tax.
The Secretary of State’s office accepts payment by check, money order, or via credit card (Mastercard, Visa, or Discover).
If you are required to withhold taxes on employees’ paychecks or if your business income will be reported on your personal state income tax, you will need a Federal Employer Identification Number (EIN). This is a separate fee payable to the IRS.
Nevada Initial List
The following services are provided at no additional cost to you:
- Issue one renewal certificate per year for a period not to exceed 1 year;
- Current Nevada business names and addresses (corporations, limited partnerships, limited liability companies, fictitious or trade name);
- Listings of officers and directors;
- Statement of Information (resident and non-resident);
- Offering Statements – offering statement audits for domestic and foreign limited partnerships filing under the Uniform Limited Partnership Act [NRSch. 115];
- Foreign Registration – The Secretary’s office is responsible for all filings by foreign companies to qualify the said company to do business in this state and for the renewal of such filings as prescribed by law;
- Doing business as (DBA) name searches;
- Registration/Filing fees.
A copy of the requested document will be provided at no additional cost if received from a Nevada resident or $0.25 per page if received from non-residents or foreign entities.
There is an extra fee for special requests, such as a certified copy of the corporation or certificates and LLC formation documents exceeding the normal production schedule.
These fees vary depending on what you are requesting- contact the office nearest to you for more information BEFORE your visit.
Nevada LLC Annual Costs
Nevada LLC fees depend on the type of business you form.
The Nevada Secretary of State charges $50 to process a filing and set up an entity with the state.
- Your first annual report is due on the anniversary date of your LLC filing and costs $75; filers can request this report anytime during their first year for free (if they paid the $50 origination fee and it’s their first report).
- Follow-up reports cost $25 each if submitted on time. If you are late to file your annual report, a delinquent filing fee of $100 is added to the original cost. A late penalty of an additional $75 is also added for every month, or fraction thereof, that the report is overdue.
- The Nevada Secretary of State also charges $50 to amend an existing LLC in Nevada or limited partnership filing and $25 for registration renewal.
If you are late to file your yearly renewals and they are not postmarked by the January 1st deadline, a late fee of $100 will be added to the original cost.
The penalty fee for late renewals is $50 per month, or a fraction thereof that the filing was not submitted to the state by the deadline.
Open an LLC Business Bank Account
After you have filed your Articles of Organization to form an LLC, your bank will probably want to see the actual document before allowing you to open a business account.
You can either make a copy using the high-speed copier at your Secretary of State’s office or take the original with you to your local bank branch.
You must deposit $125 cash with your application. If you want to establish an operating account, you must also make a deposit of $500 in cash or money orders and checks payable to the State Treasurer for Nevada.
You can use personal funds (not money borrowed from a third party) if funding your business upfront is not possible.
This is all confidential information; if you do not have the resources to fund your business, you can apply for a 90-day extension by filing an application with the State Treasurer.
Your new bank account will be opened within 21 days after this request is processed.
Annual reports are due on the anniversary date of your LLC filing each year: if you formed your business in October 2013, then you need to submit your annual report by October 31 st each year.
However, if you filed your initial paperwork with the Secretary of State on or after November 1st, then you are due to file by December 31st that same year.
- The easiest way to submit these reports is online through the Secretary of State’s website. However, you can also mail your reports by post and include a check or money order for $75 payable to the “Secretary of State.”
- If you want to submit your filing in person, bring two copies of each annual report along with any other documents required at that time.
- When filling out this report, you will be asked to identify your business entity by name and document type, as well as the title, name, address, and telephone number of each LLC member.
- Your total authorized capital is also required for this report, which should be entered in the appropriate field on your form. This information cannot be updated or changed after you submit your annual report to the Secretary of State’s office.
- The report must be accompanied by a certificate of good standing from your state government, which you can request on the same form as your annual report. Your certificate needs to be either notarized or signed in front of a Nevada Notary Public; if it is not notarized, then the Secretary of State’s office must also process it.
What should I know about Nevada LLC taxes?
Just like with a corporation, your LLC will be taxed as a subchapter-S Corporation if it meets the following requirements.
- The maximum number of members for an S-Corp in Nevada is 100.
- All profits and losses must be distributed to shareholders in proportion to their ownership interest. Any amount you make can be withdrawn at any time without any tax liability.
- The IRS also requires S-Corps to file Form 1120S each year, which covers income and expenses for shareholders. This tax return is due on the 15th day of the third month after an LLC’s fiscal year ends – if your business filed its Articles in October 2013, then you should complete this form by April 15th.
- You will also receive a Form K-1 from the IRS, which lists your taxable income and loss amounts. This form should help you determine how much you owe personally for state taxes; if your business isn’t owed any money by the government, none of it will be passed along to the individual members.
- However, if your LLC does have a net loss, then you should receive an adjustment to your income from the IRS. After you file this information with the state, it will list how much the S-Corp lost for each member and reduce their personal tax liability accordingly.
- The fastest way to make these calculations is through TurboTax or TaxAct; both of these programs will walk you through the process of submitting your required forms and mailing in any documents that need to be filed. Keep in mind that these programs will charge you a fee for their service, though you can usually receive an e-file discount if your LLC is due a refund from the IRS.
- If your business is classified as a C-Corp, you should submit a Form 1120, along with any other state forms or documents that need to be filed. The IRS also wants C-Corps to file an annual information statement on Form 1120-L (officially known as the “Transformation of a business corporation into a limited liability company (LLC) or domestic, international sales corporation”).
- If your business isn’t required to file Form 1120-L, then you can just submit the standard income tax form instead.
Do LLCs have to register with the Nevada Department Of Taxation?
If your business was formed in Nevada, then you are not required to register with the Department of Taxation.
This is because LLCs are already registered with the Secretary of State’s office, which also handles all taxes for legal entities operating in the state as well.
However, if your company is based outside of Nevada and has an out-of-state member who does business in the state, then you will need to register with the Department of Taxation.
This includes anyone operating out of Nevada but is also sales or business owner in a different area.
Does a Nevada LLC need a business license?
In Nevada, an LLC is not required to have a business license unless it conducts business in the state.
This includes having at least two members who are also residents of Nevada – if your LLC meets these requirements, then you should send a Business License application before operating as a limited liability company.
- Business licenses can be obtained by printing out the application online, submitting it by mail, and paying the required fee.
- The application will ask for details about your LLC’s business structure and operations, such as its physical address and number of employees.
- It will also require a few other important items, such as the founder’s name, signature, and his or her date of birth.
If you’re still not sure whether or not your LLC needs a state business license, then you can check with the Nevada Secretary of State’s office for more details.
The Office will also issue you a trade name certificate, which should be filed with your Articles when they are submitted to the SOS.
Business license renewal periods in Nevada vary by the type of business; in most cases, you should receive a reminder notice from the state if it’s about time for your LLC to renew.
Other licenses and permits you may need:
If your LLC employs people, you will need a workers compensation policy and an employer identification number.
Employer Withholding Tax:
If any of your employees make over $600 per week or over $7,200 in the course of one year, then you will need to withhold taxes for Social Security and Medicare on their behalf.
In Nevada, people who sell goods and/or services to the public are required to submit a sales tax form by May 15th of each year.
You can download this form from the Department of Taxation’s website.
B & O (Business and Occupation):
Businesses that make over $500,000 per year are required to pay the state Business License Tax.
SR Act (Special Repair and Improvement):
This is for businesses that make over $500,000 per year in gross sales. They must file an “SR” return with their business license taxes.
What is a foreign LLC in Nevada?
Foreign LLCs are foreign companies that sell goods or services in the state of Nevada but do not have a physical presence there.
This means that they can still work as a limited liability company and receive the same benefits as regular LLCs but will generally pay more in taxes since they aren’t eligible for state tax exemptions.
These companies also must file a Certificate of Authority with the Secretary of State’s office.
In order to register, foreign LLCs must have either a Nevada registered agent service or a local office in Las Vegas.
What is a Nevada Restricted LLC?
A Nevada Restricted LLC is a special type of LLC that should be used for businesses that want more control over the governance and ownership of their company.
This type of business structure can also help you limit your liability if something goes wrong.
Because only members and those on their list are allowed to make decisions about the way your company runs, it could help your case in court if, for example, you are sued.
Features and Requirements:
- The downside to a Restricted LLC is that it does not give you the same level of anonymity as an Open LLC since the Secretary of State’s office can see who all the members are. This means that anyone interested in buying your company or taking on future investors will be able to find out who you are.
- Your Restricted LLC must have at least one member and two managers, all of whom must be residents of Nevada. It also requires a written Operating Agreement, which states how the company will be organized. This agreement cannot go against any state statutes or regulations.
- Broadly speaking, Restricted LLCs are a good option for established businesses that want to maintain a degree of anonymity. However, you should check with an attorney in your state to be absolutely sure about the laws surrounding these types of businesses and how they apply to your situation.
How do I form a Nevada Corporation?
Forming a corporation in NV is very similar – You’ll need to file Articles of Incorporation with the Nevada Secretary of State’s office.
- Like an LLC, your corporation will also need to choose a board of directors. They’ll then be responsible for making decisions on behalf of your company.
- You should consider using this business structure if you plan on raising money from investors in the future or selling some shares of your company. This is because corporations are treated more favorably than LLCs when it comes to tax advice and owning assets.
- Corporations are also more transparent, so anyone interested in investing in your company shouldn’t be able to find out who the members of your LLC are.
- You’ll need a good team behind you – At this point, most established corporations have at least one lawyer on their team who will help guide them throughout the process. That means that getting up and running will be a little more expensive than it would be otherwise.
I am a Non-Resident of the USA, and I want to start an LLC or Corporation in Nevada. Do I have to be there?
No, you can do it from your home country.
For my clients, who are foreigners residing outside of the United States (or ex-pats), I recommend using legal counsel to follow all the steps to get a Nevada Corp or LLC.
Differences between foreign entities and US-based ones:
- The name of the entity cannot be similar or identical to its owner. For example, if a company is set up in Nevada by a person named Juan Gonzalez under the name “Juan Gonzalez Inc.,” the company cannot simply be Juan Gonzalez Inc.
- The Articles of Organization must be filed within 12 months, or the entity will automatically cease to exist. In order to keep it active, an annual report has to be filed with the Secretary of State no later than 60 days after its fiscal anniversary date. If this is not done, the entity will cease to exist.
- Nevada is not tax-neutral. This means that if you own a Nevada company, you will have to pay taxes to both your home country and the USA based on any income generated from outside of those two regions.
What material changes require amendments to Nevada Articles of Organization/Restated Certificate?
Any changes to the address of your business in Nevada must be reported within 30 days with a statement of change.
This also applies to any change in ownership, management, or control of the LLC or Corporation, such as replacing a member with a new one for whatever reason, appointing/removing someone from the initial list of managers, adding additional shareholders, and so on.
Any change that requires an amendment should be done by the current officers of the company.
What are the requirements to file an annual report for Nevada Corporation or Non-Resident LLC?
A power of attorney must be dated no earlier than six months prior to the date on which it is filed.
It must be signed by an authorized member and contain a copy of their photo identification.
If the corporation has more than 10 members, the filed report must contain a list of members with their full name and residential address.
After the initial period, an annual report has to be filed within 60 days after the fiscal anniversary date.
The report is due no later than April 1st for corporations whose financial year ends December 31st; if it ends on any other date, then the deadline will be on that date.
Setting up your business in Nevada as an LLC or Corporation is fast and easy.
There are no minimum capital requirements, you don’t need to hire a lawyer for most parts of the process, and the state fees are relatively low (starting at around $200)
There are some things to consider before doing so, though – it’s worth talking with someone who has experience with forming businesses in Nevada to get the complete picture.
The good news is that you have found this article, so now you are one step closer to making an informed decision.