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Did you know that Nevada is the second most popular state to launch a business? In fact, you don’t even have to live in Nevada to start a business there! While there are a lot of reasons business owners flock to the Silver State, two of the biggest remain its attractive tax structure and its generous incentive programming. Learn about the business bylaws of running an LLC in Nevada, below.
Choosing a business name is the first step in forming your new Nevada LLC. People must be able to tell your LLC apart from all other LLCs, corporations, and other business entities already on file (registered and reserved) with the state of Nevada. If needed, IncFile can provide registered agent service for your LLC.
In Nevada, it is not necessary to file a name reservation. This is because the name submission included with your LLC formation will be filed within the cost associated with the entity formation. However, there are a few requirements that limit what you can and can’t name your LLC.
The LLC name must contain (as the last words) one of the following: “Limited-Liability Company,” “Limited Liability Company,” “Limited Company,” “Limited,” or one of these abbreviations: “Ltd.,” “L.L.C.,” “L.C.,” “LLC,” or “LC.” The word “Company” may also be abbreviated as “Co.” if it’s used in conjunction with the first set of phrases.
Your LLC’s name is not, however, allowed to include the terms “accounting,” “accountant,” “accountancy,” “auditing,” or “auditor” unless the Nevada State Board of Accountancy certifies that the limited liability company is registered under the provisions of Chapter 86 of the Nevada Revised Statutes (NRS).
Additionally, your LLC’s name also may not include the words “bank” or “trust” unless the articles of organization show that the LLC is planning to exclusively conduct business as a banking or trust company. It must also have been approved by the Nevada Commissioner of Financial Institutions.
Your LLC’s name may not include the words “engineer,” “engineering,” “engineered,” “professional engineer,” “registered engineer,” or “licensed engineer” unless the State Board of Professional Engineers and Land Surveyors certifies that the LLC’s principals are licensed to practice engineering under state law and that the State Board of Professional Engineers and Land Surveyors certifies that the LLC is exempt from any prohibitions.
It is permitted to use the name of another LLC whose charter has been revoked, one which has not been the surviving entity in a merger, or whose existence has otherwise ended or been terminated.
After you have named your Nevada LLC, you must file articles of organization with the Nevada Secretary of State, along with a $75 filing fee. The articles must be signed by at least two of the persons who are organizing the LLC, and they must submit an original and a copy to the Corporations Division of the Secretary of State’s office.
Unlike most states, the organizers do not have to be Nevada residents (or even US citizens) to form an LLC. The initial agent must also sign the articles, indicating acceptance of the appointment as agent. The articles of organization forming your Nevada LLC must include the following information:
All Nevada-based LLCs are required to have a registered in-state agent. This agent is the person or office designated to receive official state correspondence, including notice if the LLC is served with a lawsuit. The registered office may be (but is not required to be) the LLC’s place of business, but it must have a street address (instead of just a post office box).
If needed, Incfile can provide registered agent service for your Nevada LLC.
Your LLC is officially “organized” once the signed original and one exact or conformed copy of the articles of organization are received by the Corporations Division of the Nevada Secretary of State’s office, along with the filing fee. That office will issue your new LLC a certificate of organization, along with a conformed copy. The original will be filed in the Secretary of State’s office.
The state business registration fee is $200 and is due at the same time as the initial annual report.
Nevada LLCs must file an initial annual report, called the List of Managers or Managing Members and Registered Agent, by the last day of the month following the month when the LLC was formed. The state filing fee for this list is $150.
For example, if you file to form an LLC in Nevada on April 12th, you will be required to file these reports and be subject to state fees totaling $350 on May 31st.
The state requires that a certified copy of this initial annual report, for which the state charges $75, be kept at the resident agent’s office. Because of this requirement, most organizers pay the extra $30 for a certified copy at the time of filing, for a total of $105 due to Nevada.
The operating agreement is nearly as critical for the organization as the certificate of formation. Though it isn’t an official state requirement to have an operating agreement, it is a vital internal document that lays out how your LLC will be run on both the daily and strategic levels. Unless the articles of organization or the operating agreement itself state otherwise, unanimous consent of the LLC’s member is required to amend the operating agreement.
The operating agreement must include:
The operating agreement may also set forth meeting requirements such as the amount of required notice, what constitutes a quorum, voting rules, and so on, but it doesn’t have to. Typically, the operating agreement does list requirements for the LLC that are already listed in state law and regulations.
It can also include such items as restrictions or constraints on the power of the members to adopt, amend, or repeal the operating agreement. If there is more than one member, the operating agreement must initially be approved unanimously in writing by the members.
An LLC is required to have at least one member. Members may become a member of, or acquire, an interest in the LLC when it is first started (using the methodology provided in the operating agreement), or when the new member’s admission is recorded in the LLC’s records.
Joining: To join the LLC, the prospective member usually needs to make some kind of contribution — for example, pay cash or transfer property to the LLC — or take a binding obligation to do so. However, a member may usually be admitted to the LLC without acquiring a membership interest if the rules in the articles of organization and operating agreement permit it, or if the members vote to do so and the admission is documented in the LLC’s records.
Resignation: A member can only resign from the LLC in a way consistent with the articles of organization and/or the operating agreement. One or both of these documents will also usually state the minimum amount of time a member can maintain membership before being allowed to resign.
LLCs can pursue remedies for damages suffered by the organization that result from a member’s resignation. A member who resigns or withdraws ceases to be a member, has no voting rights, and has no right to continue to participate in the management of the company, even if the payment due from the company is deferred.
When a member resigns, he or she is entitled to receive the fair value of the membership interest within a reasonable time after the resignation (unless, of course, the articles of organization or operating agreement specify otherwise).
If the resignation or withdrawal of a member violates the provisions in the operating agreement, then the amount payable to the former member is the fair market value of his interest reduced by the amount of damages sustained by the LLC or its other members as a result of the violation. In this case, the LLC may also defer the payment for as long as needed to prevent unreasonable hardship to the organization.
Now that you have your new company, what do you need to do on an ongoing basis? Compared to other states, Nevada has minimal reporting and disclosure requirements, however there are, of course, some mandatory items.
Nevada LLCs must file an initial List of Managers or Managing Members and Registered Agent. An updated list must be filed every year not later than the anniversary month of the LLC’s formation; the filing fee is $150.
Companies conducting business in Nevada must also file a business registration form with the state Department of Taxation to obtain a general business license. The filing fee is $200, and the license must be renewed annually. Other Nevada agencies, like the Employment Securities Division, and some local government agencies, also accept the same application form for their filing requirements.
When you create your LLC with Incfile, we will send you courtesy email reminders as the due dates for Nevada’s ongoing requirements approach.
Taxes are another ongoing requirement. Nevada has no franchise tax or personal or corporate income taxes. There is also no special state entity tax levied on LLCs.
However, by its nature, an LLC still offers some federal tax advantages over a corporate structure, including the availability of more deductions. The biggest advantage is that an LLC is not required to be a separate tax entity like corporation. Instead, it can be a “pass-through entity” for tax purposes, so that the LLC owners report business losses or profits on their personal tax returns, in the same way that a partnership does.
An LLC is dissolved when any one of the following events occurs:
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