Are you looking to form a limited liability company (LLC) in Nevada, but you’re not sure how the process works? There are several important steps to create a compliant Nevada LLC that can do business in the state.
To get started, please reference our 6-step guide below or hire an affordable online LLC formation service.
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What is a Nevada LLC?
The Nevada LLC is one of the most popular business structures in the state. It’s a more casual and flexible type of business than a corporation, but includes the personal asset protection that’s lacking from sole proprietorships and general partnerships.
LLCs in Nevada have simple formation and maintenance requirements, several options for how they can be taxed, and flexible management. From one-person businesses to multi-member LLCs with several owners, the LLC is a popular choice for a reason.
Setting up a brand-new Nevada LLC in 6 Steps
For the first part of this guide, we’ll cover the 6 essential steps to setting up a Nevada business that doesn’t have employees yet. These steps also apply to businesses with employees, but we’re keeping things streamlined to start. If you do have employees, make sure you complete these steps and the steps for employers (which we’ll cover later in the guide).
Step One: Choose a business name
Your LLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to consider when naming your business.
Legalities
In the state of Nevada, you’re required by law to meet several requirements for your business name. Here’s a quick glimpse at the rules for LLCs:
- Your name must include the abbreviation “LLC” or “LC” (or a close variation) or the phrase “Limited Liability Company” or “Limited Company”
- Your name cannot include words like “Bank,” “Trust,” “Architect,” “Engineer,” “Residential Design,” or similar vocabulary unless your business has been licensed and approved by the Associations that regulate those trades
- Your name must be “distinguishable on the records,” or distinct from the names of other entities in use in the state
- For more information on naming rules in Nevada, please consult the Name of Company Section of Nevada’s Limited Liability Companies Statute.
Explanatory Naming
Another aspect to consider is including language that explains what your business does ― for example, if you’re starting a coffee shop, put the word “coffee” or “brew” in your LLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.” This helps potential customers know exactly what to expect from your business.
Once you’ve picked the perfect name for your business, you don’t want to lose it to another aspiring entrepreneur. Thankfully, Nevada allows you to reserve your business name if you’re not quite ready to register your business. To do that, you’ll need to file the Name Reservation Request and pay the $25 filing fee.
Filing this reservation protects your chosen name for your exclusive use for 90 days. You can learn more about name reservations here.
Step Two: Appoint a Registered Agent
Every LLC in Nevada is required to designate a registered agent, which is the individual or registered agent service that receives government correspondence on behalf of your business, then forwards those documents to you.
When you appoint a Nevada registered agent, here are the state requirements to be mindful of:
- Every entity that files with the Secretary of State (both domestic and foreign) must appoint a commercial registered agent or a noncommercial registered agent
- The agent may be an individual resident of the state or a business with authority to operate in the state
- An agent must be continuously maintained
You can find a full rundown of the state laws here.
Without a registered agent, you could lose your good standing with the state of Nevada, and the state also has the right to dissolve your LLC if they decide to. In a worst-case scenario, you could miss the alert regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
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Step Three: File Formation Documents
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Once you are ready to form your Nevada limited liability company, you will fill out the Articles of Organization. You can either do this on your own or hire a Nevada LLC service. Some services, like ZenBusiness, even offer discounts on their service.
This is THE document that will register your LLC with the state. You’ll want to ensure all of the following information is correct on the form:
- Your chosen business name
- If your business will be a standard, series, or restricted LLC
- Name of your commercial registered agent OR name and address of your noncommercial registered agent
- Dissolution date for the business (if not perpetual)
- Whether your LLC will be managed by members or managers
- Name and address of each managing member or manager
- Name and address of each organizer
- Certificate of acceptance of your registered agent
- Initial list of managers and business license application
Nevada’s form is pretty lengthy, but that’s because the Articles of Organization includes both your Articles and the initial list of managers and your general business license application. We’ll talk more about licenses in a minute, but Nevada basically bundles everything into one document. There is a filing fee for each document: $75 for the Articles, $150 for the initial list of officers, and $200 for the business license application. Be extra careful to fill out all the required information correctly so you don’t have to repeat the process. If you prefer, you can file this form online.
One of the most important things to remember when filing is to include your registered agent’s certificate of consent. Some states require you to simply check a box designating their agreement to serve as your agent, but Nevada requires a full signature. It’ll take an extra step on your part, but it’s not a step you can skip.
- Total cost: $425 (the Articles themselves are just $75)
- Processing speed: usually within 1 business day for online filings, 1 week for paper documents
- Expedited processing: $125 for 24-hour processing, $500 for 2-hour turnaround and $1,000 for one-hour processing
Step Four: Draft an Operating Agreement
After you register an LLC in Nevada, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for this document in order to open an account. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your Operating Agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your Operating Agreement or create one from a free template online. You can read more about Operating Agreements, but some of the basic information you’ll want to have includes:
- Individual members’ ownership percentages
- Rights and responsibilities
- Voting powers and meeting guidelines
- Allocation of profits and losses
- Management rules for the LLC
- Provisions for buying a member owner out, or transferring their shares in the case of illness or death
Step Five: Get Licenses & Permits
Nevada law requires an LLC to obtain all necessary licenses and permits before starting operations. State law also decrees that an LLC can only provide one specific type of service. All owners of the LLC must be licensed or registered to provide the specific service under which the LLC was assembled.
The type and cost of the permits that your business may require varies depending on the nature of the services your LLC offers. In Nevada, the biggest requirement for every business is the general state business license, which you’ll actually apply for while you set up the business. However, you will need to renew it every year for another $200 fee. There are hefty late fees if you don’t file it on time, so be sure to keep your license up-to-date.
Beyond that, there’s a good chance that your business will need to obtain some industry-specific permits or local licenses. Thankfully, Nevada makes it somewhat easy to figure out which licenses apply to your businesses thanks to their New Business Checklist Tool. If you’re not sure which licenses apply to your business, the Checklist is a great place to start.
Last but not least, you should check with your city or county to see if they maintain any licensure requirements.
Obtain a Business Bank Account
One of the most important aspects of running an LLC is ensuring that your business funds remain separate from your personal finances. And to do that, you’ll need a separate bank account for your business.
Obtaining a business bank account is pretty simple, and you can choose the financial institution you like best. Some banks will ask to review your LLC’s operating agreement, and some also ask to see your EIN (see the Employers section below). Once you have your account, you’ll be able to get checks, make payments using your business card, and so on.
If you failed to get a business bank account, you would technically be blurring the line between your personal accounts and your business accounts. That compromises your personal asset protection.
Next Steps for Newly-Formed LLCs
1. Prepare for tax time
Regardless of how far away April 15th is, it’s never too soon to prepare for tax time and setting up accounting software. As an LLC owner, the exact tax rates you’ll pay depend on the taxation structure you choose for your business. If you choose to be taxed as a corporation, the LLC itself will pay taxes from its own funds. Meanwhile, LLCs taxed as pass-through entities don’t technically pay taxes; its members do. The profits are distributed to the LLCs members, and each member reports that income on Schedule C of their personal taxes.
If you choose to be taxed as a corporation, you’ll pay the following rates:
- Federal: 21%
- State: Modified Business Tax, 1.425%
Meanwhile, LLCs taxed as pass-through entities pay these rates:
- Federal: 10-37%, rising on a fixed-bracket scale
- State: Modified Business Tax 1.425%
In order to compliantly file and pay your taxes, you’ll fill out a complete copy of federal Form 1065 including all federal K-1s, statements, and attachments. Nevada may have hefty fees for business formations and maintenance, but the state taxes are pretty minimal. Technically speaking, there isn’t a personal or corporate income tax. Instead, the state has a modified business tax, which only takes 1.425% of qualifying income from businesses (excluding the first $50,000 in income). If your gross revenue ever exceeds $4,000,000, you will also be subject to the commerce tax.
Next, retailers will also be expected to collect and pay the state sales tax (4.6%). Then, you may also need to account for some industry-specific taxes. For example, Nevada has unique taxes for marijuana, live entertainment, and other industries. To learn more about sales taxes and miscellaneous fees, check out the Department of Taxation.
Because taxes can be incredibly complicated, we highly recommend consulting with a business attorney or accountant to ensure that you cover all requirements on the state and federal level.
2. Be ready to file your annual report
Like most states, Nevada requires you to submit an annual report every year to keep the state updated about certain aspects of your business. However, Nevada’s “report” is actually two things: a renewal of your general state business license and your annual list of officers. You can easily file this document online; the due date is the last day of your LLC’s anniversary month.
You’ll be expected to pay $150 to submit this annual list (on top of the $200 business license renewal fee). Since this is such a hefty annual expense, it’s definitely one you’ll want to prepare for.
3. Consider business insurance
The big advantage to the LLC is that it offers you personal asset protection. But that doesn’t mean that mishaps won’t happen along the way. We highly recommend obtaining a general liability policy with the right coverage for your business.
In the event of a mishap or natural disaster, an insurance policy can help you navigate unexpected expenses. Be sure to compare your different options to get the best coverage for your particular type of business.
Extra Steps for Businesses with Employees
When you’re operating as a one- or two-person show, operating a business is relatively streamlined. Things get more complicated when you bring employees into the picture, but employees also help raise your business to new heights. But to reach those heights, you need to comply with employee-related legal requirements.
Step One: Address employee-related taxes
Any business with employees must obtain an EIN, or an Employer Identification Number. This is a free registration with the IRS, and the number acts a lot like a social security number for a business. Obtaining the number also lays the groundwork for other taxes, such as social security and withholding taxes. For example, you’re required to withhold income taxes from employee paychecks, make social security and medicare tax payments, and pay unemployment fund taxes. For more information on employer taxes at the federal level, look here.
There are similar taxes on the state level. For example, Nevada requires contributions to the unemployment insurance fund. But because there aren’t any income taxes, you won’t be responsible for state withholding taxes (only federal ones). We recommend consulting with the Unemployment Insurance Information page to learn what taxes apply to you and your business.
Step Two: Obtain additional insurance
Every Nevada business with employees is strictly required to maintain a workers’ compensation insurance policy. For more information on this requirement, check out the Division of Industrial Relations.
If you haven’t already obtained a general liability policy, we highly recommend that you do so when you bring employees into the business. The more people you have involved in a business, the higher your risk of needing general liability insurance.
Of course, proper care and discretion will eliminate most problems, but incidents happen—from faulty products to an employee slipping and falling and theft and many places in between. And in some cases, insurance can be the difference between a minor hiccup and a budget-breaker.
Step Three: Enlist Help
For some entrepreneurs, part of the fun of running a business is the opportunity to wear lots of different hats: accountant, manager, marketer, quality control expert—it’s a near-endless list. And if your business is still pretty small, you might be able to handle many of these tasks yourself, especially if you’re prepared with a business administration degree.
But if you aren’t (and it certainly isn’t a prerequisite), some of these tasks may leave you feeling overburdened or out of your depth. For instance, navigating employer-related taxes might steal valuable time that you’d rather spend promoting your business or developing a new product. An accountant or tax attorney, however, knows those tasks like the back of their hand. You may decide it’s worth the added expense to enlist their help.
Ultimately, it’s your decision whether to bring in professionals or DIY. But in our opinion, it’s often worth it to get help from specialized pros.