Starting An Llc In Nevada: Everything You Need to Know
Starting an LLC in Nevada is advantageous for business owners thanks to the state's legal and tax benefits. These benefits apply even if your primary business location is in a different state. 3 min read
Starting an LLC in Nevada is advantageous for business owners thanks to the state's legal and tax benefits. These benefits apply even if your primary business location is in a different state. There are so many perks to forming a limited liability company (LLC) in Nevada that it is becoming almost as highly regarded as Delaware for the formation of new businesses.
In recent years, the Nevada legislature has deliberately made forming companies in its state more attractive to new businesses both in and out of state. The goal is to attract more business and compete with other states such as Delaware. Delaware has become known as one of the most sought-after states for business formation due to:
- Low corporate taxes.
- A high level of liability protection.
With the benefits Delaware has to offer new businesses, the state has enjoyed a steady stream of revenue from the increase in business registrations and associated fees, making business formation an industry in and of itself. Nevada made its recent changes in an attempt to aggressively seek out this type of revenue and become one of the most business-friendly states.
There are still a few drawbacks to forming your LLC in Nevada, such as:
- Higher organization fees.
- Naming initial owners or managers on the articles of organization.
However, the state is still known as a "privacy state" that provides a certain degree of anonymity to business owners.
Steps to Forming Your LLC in Nevada
Forming an LLC in Nevada is as easy as following these steps.
Name Your LLC
The first and most important step is naming your LLC. When deciding on your business name:
- Make sure the name is easy for clients to search for.
- It must include the words limited liability company or the abbreviation LLC after it.
- You must include the required licenses and paperwork if you use restricted words such as bank, university, or attorney.
- You cannot use any words that could cause your company to be confused with a government agency.
- You can reserve your name for 90 days by filing a Name Reservation Request.
- You must send in a name application with a $25 fee.
- Check for website and email name availability even if you don't plan on setting these up right away.
Choose Your Registered Agent
Nevada requires that you name a registered agent who will be available to receive any legal papers, such as summons or notices of legal action, on behalf of your LLC. The owner can act as the registered agent or designate another person as long as that individual has a physical address in Nevada and is allowed to perform business in the state.
File Your Articles of Organization
To officially register your LLC, you will need to file your company's Articles of Organization with the state. Your Articles of Organization must specify whether your LLC will be member-managed or manager-managed. In member-managed LLCs, the owners are actively engaged in the day-to-day functions and operations. In manager-managed LLCs, a designated manager runs the daily operations. Along with your articles, you will need to include the $75 processing fee or $125 for expedited services. Your Articles of Organization will need to include several pieces of information, such as:
- The name and address of the company.
- The name and address of your registered agent.
- The dissolution date.
- An employer identification number (EIN) or federal tax identification number.
- The names and addresses of the organizers.
Once you file your Articles of Organization, it will take a few business days for processing unless you choose expedited services.
Create an Operating Agreement
Though creating an operating agreement is not a requirement for forming your LLC in Nevada, it is good practice to have one to describe your operating procedures and outline your ownership.
Get an Employer Identification Number
You must have an EIN from the IRS to:
- Identify and operate your business.
- File state and federal taxes.
- Open a business checking account.
An EIN is basically your company's Social Security number. You can obtain an EIN for free either online or by printing out and mailing in the proper form.
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