Benefits of Nevada LLC: Everything You Need to Know
Benefits of Nevada LLC include low or non-existent state taxes, high privacy levels in public records for owners, and no need for owners or members to reside in the state. 4 min read
Benefits of Nevada LLC include low or non-existent state taxes, high privacy levels in public records for owners, and no need for owners or members to reside in the state. Since an LLC is governed by the state in which it was formed, each state has unique LLC laws, and Nevada's are particularly attractive to businesses.
The Benefits of an LLC in Nevada
Most states offer LLCs, but Nevada's LLCs are regarded as highly as Delaware's, traditionally the most popular state in which to incorporate. Beginning in the early 1990s, Nevada began attracting companies to incorporate and organize there with an aggressive program.
This program included a low corporate income tax rate and a high level of liability protection for managers and owners who make the business decisions. Nevada liked the idea of the abundant revenue from registration fees that saw a large industry formed in Delaware to serve corporations (and LLCs).
With an LLC in Nevada, state-level taxes are minimal, as there are none of the following:
- corporate income tax
- personal income tax
- franchise tax
- admissions tax
- unitary tax
- estate tax
- gift tax
The tax for employer payroll is 0.7 percent of gross wages, and while there is no franchise tax, there is a fee collected with each LLC's List of Officers Report.
These conditions can be an advantage if you're aware of how to navigate the requirements.
Nevada LLCs can have "noneconomic members," that is, members who do not have any share in the business but do have voting and managerial rights. This flexibility is a plus for LLC investors who would rather have others with expertise to run the operation.
In addition, Nevada LLC members cannot be sued by LLC creditors because of the state's limited liability shield. Only the LLC can be sued.
You can go further and create a "Series LLC." This allows you to set up shields within the series. If you have several properties under an LLC, you can set up a shield so one property cannot be foreclosed to clear the debts of another property within the LLC.
Another benefit to Nevada LLCs is their privacy level, which is one of the highest, if not the highest, in the country. When you create an LLC in Nevada, you do not need to provide a list of members (owners).
Nevada has no agreement about sharing information with the IRS (the IRS has this in 33 states). Because of this, owners of LLCs in Nevada and corporation shareholders don't need to name themselves in public records. This makes it difficult for third parties to determine who owns LLCs and corporations in Nevada.
Although this privacy protection is sometimes abused, these protections offer value to legitimate and law-abiding business people, who benefit because sometimes the government, police, and courts pursue the innocent, and defense costs time and money.
The best part of Nevada's privacy protection is that unscrupulous creditors and frivolous litigation can usually be avoided. This is because business owners are hidden from the public, taking them out of direct contact. Note that this protection isn't absolute. A lawyer with a lot of money and time could uncover an entity's ownership.
Despite this, there is a high level of privacy for owners who aren't managers, so they can remain anonymous. Therefore, unless you perform an outright fraud or sign documents saying you can be sought after for liability if the LLC fails, you're not responsible for any company liability/obligations as a manager, officer, or director.
Finally, when an LLC is formed in Nevada, neither the owners nor any company members need to live in Nevada at any time.
Other Things to Know About Nevada LLCs
If you're going to form or invest in an LLC, you can expect various advisors to encourage you to form an LLC in Nevada regardless of business location. This is a great strategy in the right circumstances. Nevada LLCs have state-level benefits in addition to more general ones.
LLCs often choose to be taxed as corporations; therefore, they need to pay tax at the federal (and sometimes state) level. If you do form a Nevada LLC and live/operate elsewhere, you're subject to that other state's requirements, depending on exactly how you're organized.
There are several levels of LLC applications in Nevada as of 2010:
- The first level starts at $75 for the regular service.
- For $200, you can be approved within 24 hours.
- $575 will have your approval granted within two hours.
- $1075 will get your approval granted within an hour.
If you need to learn more about the benefits of LLCs in Nevada, you can post your legal need on UpCounsel's marketplace. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.