Nevada Single Member LLC: Everything You Need to Know
A Nevada single member LLC (SMLLC) is a business entity with similarities to a limited liability company (LLC), with the exception that a single-member limited liability company has only one member. 3 min read
2. Drafting an Operating Agreement
Overview of Nevada Single-Member LLCs
- An advantage of a single-member LLC that makes it a popular business structure is it allows a single owner to be treated like a limited liability company.
- All states and the District of Columbia allow an LLC to have a single member or allow the formation of a single-member LLC. This was not always the case.
- Single-member LLCs and multi-member LLCs are similar when it comes to forming an LLC in Nevada.
- As a rule, you must obtain a state business license from the Secretary of State to do business in Nevada. The license must be renewed annually.
- A yearly report must be submitted annually. The report can be filed online. The filing fee is currently $150. There is a penalty fee for filing late.
- The yearly or annual report requires minimal information such as the names and addresses of the limited liability companies managing members or managers. Since you are filing as a single-member LLC, the only member information needed is yours.
- The annual report due date is dependent on when you initially filed it. The report is due by the last day of the month when the report was first filed.
- The annual report form is available for download from the Secretary of State website, or you may file it online.
- A single-member limited liability company will be taxed as a sole proprietorship unless the owner opts to be treated like a corporation.
- The Treasury Reg. 301.7701-3 states the default tax status of an SMLLC is: "Disregarded as an entity separate from its owner." This means the single-member LLC will not file taxes. The member of the LLC would report income and expenses of the LLC on his or her individual personal tax return.
- To have a single-member limited liability company treated as a corporation requires filing Form 8832 with the Internal Revenue Service (IRS).
- Nevada does not impose an income tax on corporations nor does the state have a personal income tax. This may result in no state income taxes due for LLCs including those that have elected to be treated as a corporation.
- When drafting an agreement, make sure the terms used are specific to the operation of a single-member LLC and not a multi-member LLC.
Drafting an Operating Agreement
Before drafting an operating agreement, visit the Secretary of State website to know what is required. If the required information isn't correct or is missing, you leave yourself open to what is known as "piercing the corporate veil."
This happens when a court finds that the business and the owner are not separate, which leaves the owner personally responsible for the debts incurred by the business.
If an opposing party wants to find a way to pierce the corporate veil, proving the operating agreement is not being adhered to or it is fraught with errors is an easy way to go after the owner and to prove in court.
- Download the operating agreement form from the Silverflume business portal at the Secretary of State website.
- Submit the date of formation, company name, and owner's full name.
- Provide a statement describing the purpose of the business.
- Read through title sections and subsections and enter any additional required information. Sections include: registered office and resident agent information; capital contributions; books, records, accounting; member's capital accounts; federal/state taxes; rights and obligations of members; limitation of liability; dissolution; and miscellaneous provisions.
- Owner's signature that has been notarized.
Q. How much is the fee for a state business license?
A. Currently, the fee is $200.
Q. Once I register my LLC in Nevada, can I do business in other states as well?
A. It's possible you will need to register in some, if not all, of the states where you plan to do business. Whether you do or don't depend on the rules for each state. Registration may involve obtaining a certificate of authority or similar document authorizing you to do business.
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