Are you looking to form a Nevada professional corporation, but you’re not familiar with the incorporation process?
Professional corporations are those owned and operated by licensed professionals, like doctors, lawyers, and architects. There are quite a few important steps you’ll need to take to create your Nevada professional corporation and maintain it, so this guide will outline the rules and regulations involved with this process.
To get started, please reference our 12-step guide below or hire a professional online incorporation service like LegalZoom.
How to Form a Nevada Professional Corporation (in 12 Steps)
Step One) Determine Whether a Professional Corporation is the Right Choice
A professional corporation ― abbreviated as “Prof. Corp.” or “PC” in Nevada ― is a business structure formed by licensed professionals. In Nevada, licensed professionals that may form a professional corporate include, among others, architects, engineers, physicians, psychologists, social workers, nurses and clinical professional counselors.
Before beginning the process of forming a Nevada professional corporation, it’s very helpful to review your business’ objectives and become familiar with your options as a business owner.
Should you form a professional corporation?
This guide explains how to create a Nevada professional corporation. When starting a new business, forming a professional corporation is just one of several options. Many businesses instead choose to set up a professional limited liability company, or PLLC.
In general, the difference between the PLLC and a Nevada professional service corporation is the same as the difference between a regular LLC and corporation ― namely, that the corporation is a more formal and less flexible business type. Not sure which option is right for you? Read this guide from the SBA.
How will ownership be divided?
A professional corporation issues “shares” to its owners, who are known as its shareholders. Before forming your professional corporation, it’s important to decide how shares of ownership will be divided among the owners.
It’s crucial to note that any shareholders, directors, or officers of a professional corporation must all practice the same profession. In other words, people who are not physicians cannot hold these positions in a professional service corporation for physicians.
How will the professional corporation to be managed?
Corporations have two layers of control. The first layer is the Board of Directors. Directors are elected by the shareholders and meet periodically (as a “Board”) to make key decisions and set the strategic direction of the company.
The Board of Directors appoints “officers” who are responsible for carrying out the Board’s initiatives and managing the corporation’s day-to-day activities. Directors and officers can be (and often are) the same people. Before forming your corporation you should determine who your initial director(s) will be.
Step Two) Choose a Name
One of the most important aspects of the incorporation process is naming your business. There are three major elements to consider when choosing a name:
Legalities
When naming a professional corporation in the state of Nevada, you will need to include the words “professional service corporation” or the abbreviation “PSC.” Your professional corporation’s name also cannot include any words or abbreviations that indicate other business types, like the phrase “limited liability company” or the initials “LLC.” You also are not allowed to include words that refer to certain types of businesses (like “bank” or “law office”) unless your business fits those descriptions.
Explanatory Naming
In addition to the legal considerations, you might want to identify your line of business or your mission in your company name. For example, you can display any closely held values in your name, like using the word “green” for environmentally friendly businesses.
A Name You’re Proud of
Keep in mind that this is your business, so you should choose a name that you’re proud of, and that you enjoy sharing with potential customers. You should also make sure it sounds good when spoken aloud, and also looks good when written down.
Check Whether Your Preferred Name is Available
Visit the Silver Flume website, Nevada’s online business portal, and use the Business Search tool to check whether it is already in use. If it’s not unique enough, you may need to tweak it or come up with a new name altogether.
Consider reserving a name
For a $25 fee, you can instantly reserve a name online for up to 90 days. This will ensure that your name is not taken by another company during the incorporation process.
Step Three) Select a Registered Agent
Nevada professional corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation in step four.
Who can be my registered agent?
A registered agent must have a physical address within the state of Nevada where mail and legal notices can be served during regular business hours. You can hire a service to act as your registered agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.
The Nevada Secretary of State says that,
Persons wishing to incorporate in the State of Nevada must designate a person as a registered agent who resides or is located in this state. Every registered agent must have a street address in this state for the service of process, and may have a separate Nevada mailing address such as a post office box, which may be different from the street address.”
Your Nevada professional corporation can appoint one of three kinds of registered agents: a commercial registered agent, a noncommercial registered agent, and a title of office or other position with your professional corporation. A commercial registered agent is any registered agent that represents 10 or more entities. Commercial registered agents also must register with the state. A noncommercial agent can be any individual or entity with a physical address in Nevada, provided that such individual or entity does not represent 10 or more entities.
If your professional corporation has a physical address in Nevada, it can serve as its own registered agent by appointing a specific title or position (such as the President, Office Manager, Owner, etc) within the company as the registered agent.
Our recommendation
We recommend hiring a professional service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off the public record. For a list of the top 5 registered agent services, check out our guide.
Step Four) Complete Your Articles of Incorporation
This is THE document that formally registers your professional corporation with the state of Nevada. You can file the Articles of Incorporation for your professional corporation by mail or in person with the Secretary of State. Note that you will also need to file a certificate from the regulatory board for your profession showing that each director, stockholder and organizer is licensed at the time of filing of the Articles of Incorporation. An initial list of officers and directors form, which also includes a state business license application, must also be filed at the time of incorporation.
Keep in mind that you are acting as the incorporator when you fill out and submit the Articles of Incorporation. You should sign as the incorporator before submitting the document.
| Cost to File | Filing fee varies according to number of authorized shares (minimum of $75); initial officer and director list fee is $150; business license fee is $200; expedited filing fees range from $125 to $1,000 |
| Time to Complete Filing | Generally 2 business weeks; current processing times are posted online. 24 hour, 2 hour and 1 hour expedited processing options are available |
| Agency | Nevada Secretary of State |
| Mailing Address | Secretary of State |
| Agency contact info for filing questions | 775-684-5708 |
Step Five) Establish a Corporate Record
Professional corporations are required under Nevada law to document and keep a permanent record of all important company decisions.
The official corporate record may be kept at the professional corporation’s principal place of business, or stored in a safe location elsewhere. You should take the opportunity to set up a secure digital or physical location for storing company records as soon as possible.
Step Six) Designate a Board of Directors
The incorporator is responsible for selecting initial director(s) of the professional corporation. The incorporator should record initial director appointments in a signed document and file it to the corporate record. This document is known as the “incorporator’s statement.” A sample incorporator’s statement can be found here.
The initial directors will serve until new directors are elected at an annual shareholder meeting, or as otherwise indicated in the bylaws. The incorporator may also serve as an initial director. Keep in mind that your directors must all share the same profession as the one the professional corporation was formed for.
Step Seven) Create Corporate Bylaws
Corporate bylaws set out the rules and procedures for how the professional corporation will operate. Some important topics typically covered in the bylaws include:
- How shareholders will conduct votes
- The total number of directors and how each director will be elected
- How often the board of directors will meet
- The types of officer roles that will be appointed
- Procedures for resolving internal disputes
While bylaws are not technically required under Nevada law, your professional corporation should still adopt them as a matter of best practices.
Bylaws help your business run smoothly, and are sometimes required by financial institutions for opening business bank accounts or acquiring loans.
Either the incorporator or the initial directors may prepare the company bylaws. The bylaws should be recorded in an internal company document, signed by the incorporator or a director, and filed to the corporate record. The bylaws are not filed with the state of Nevada.
Popular Strategies for Preparing Bylaws:
- Use a free online template. Northwest Registered Agent has a great free template you can download.
- Hire a lawyer to draft the bylaws. If your business has investors, is already profitable, or has multiple co-owners, we strongly encourage you to hire a lawyer experienced in Nevada corporate law to help you draft suitable bylaws. Look through Avvo’s directory of KY attorneys you can work with.
Step Eight) Hold First Board Meeting
After designating a board of directors and preparing bylaws, the new professional corporation should call for an initial board meeting. The incorporator often arranges and attends this first meeting. During the first board meeting, the initial directors should plan to cover the following topics:
- Review and approve corporate bylaws
- Designate officers to manage day-to-day business affairs
- Choose a bank
- Approve issuance of stock certificates
- Determine whether the company should elect to be taxed as a C corporation or S corporation (see step nine for more details)
Recording Meeting Minutes: a detailed record of all key discussions and decisions during the board meeting should be prepared and distributed to all board members for their review and approval. This record is known as the “minutes.” A copy of the minutes should be sent to each director for review and filed in the company record.
Step Nine) Handle Tax Obligations
Federal Requirements
You’ll need a federal tax ID number (EIN) to operate a professional corporation in Nevada. You can obtain your EIN from the IRS for free, and it’s a fairly painless and simple process. An EIN enables your professional corporation to hire employees, file corporate taxes, open business bank accounts, and more.
A major decision for any professional corporation is determining whether to be taxed as a C corporation or an S corporation. Take a look at how these two formats differ:
- C Corp: The majority of professional corporations are C corporations, as they are subject to far fewer restrictions than S corps. With a C corp, profits are taxed at the corporate level, and again on the personal tax returns of the shareholders, resulting in what’s commonly referred to as double taxation.
- S Corp: This is only an option if your professional corporation has fewer than 100 shareholders, only issues one class of stock, is not owned by another business entity, and does not have any foreign shareholders. If your corporation meets these requirements, you can select the S corp’s pass-through taxation which eliminates the double taxation issue of C corps. S corp dividends are not taxable.
State Requirements
Unlike most states, Nevada does not have state income tax. However, entities engaging in business in Nevada are generally subject to Commerce Tax and must file an annual Commerce Tax Return. Other state-level taxes may also apply to your professional corporation, depending on the nature of your business. You can find additional information on Nevada taxes on the Nevada Department of Taxation’s website.
If you need help with tax registration and determining which taxes apply to your business, Silver Flume, Nevada’s online business portal, can help guide you through the process. You can also use the Nevada Tax Center website to register for taxes, file returns, pay taxes and more.
Local Requirements
Your professional corporation may also be subject to city and/or county taxes. You should check with your local revenue department to confirm whether your professional corporation has any local tax obligations. For local business resources for the four largest cities in Nevada, you can visit the following websites:
Step Ten) Obtain Business Licenses and Permits
Nevada requires all businesses in the state to maintain a state business license. The application for this license is included as part of the list of of officers and directors form that must be filed at the time of incorporation and annually thereafter. The state business license fee is $200, due at the time of incorporation and annually thereafter. The annual list and fee are due on the last day of the anniversary month in which the form was originally filed.
State-level profession- or industry-specific licenses may be required for your business as well. For help determining professional licensing requirements, you can use Silver Flume’s interactive startup guide.
Note that many cities and counties have their own licensing requirements. If you need assistance determining which local licensing requirement apply to your business, you can use Silver Flume’s interactive startup guide to guide you.
Step Eleven) Acquire Insurance
Under Nevada law, employers with one or more employees generally must obtain workers’ compensation insurance. If you plan on hiring any employees, you will need to have this insurance in place. For more information about workers’ compensation, you can visit the Nevada Department of Business and Industry’s website.
In addition, you should also pursue general liability insurance and other more industry-specific types of insurance. Because professional corporations are specialized businesses, you will most likely require insurance policies based on your occupation.
Step Twelve) Open a Business Bank Account
To operate a professional corporation and receive the limited liability protection that comes with it, you have to keep your personal assets entirely separate from your business assets. Due to this requirement, it’s strongly advised that you acquire a business bank account for your corporation.
Get Help Forming a Professional Corporation
The process of forming a professional corporation in any state can be a lengthy one. If you run into any trouble along the way, remember that there are plenty of organizations that can help you navigate the incorporation process.
Online Incorporation Services
If you would like to hire an affordable business incorporation service to create your professional corporation for you, services like LegalZoom and MyCorporation can help you out. These service providers can handle most of the formation process, while still charging much lower rates than a business attorney’s fees.
There isn’t the same level of personalization that a lawyer can provide, but online incorporation services can still be a tremendous help. The only major issue with these service providers is the fact that they can’t provide any actual legal advice, so you need to know what you want ahead of time.
Nevada Business Attorney
There are some situations where hiring a business lawyer is a preferable route to using an online incorporation service. The professional corporation as a business structure can be highly complicated and specialized, and if you want to have the peace of mind that every single step was taken care of by a true expert, hiring a business attorney to form your Nevada professional corporation is the way to go.
If you would like to pursue this route, there are some convenient services that can help you choose the right lawyer for your business. We like to use Avvo, which has extensive reviews and ratings for hundreds of Nevada business lawyers, which can make it much easier to select an attorney who has your best interests in mind, and also has the expertise to get the job done right.
Nevada SBDC
If you need additional help, you can visit the Nevada Small Business Development Center website, which has a number of business resources for small business in the state. The Nevada SBDC also has offices in 11 cities across the state that host workshops, seminars, and courses designed for small businesses. These locations offer free professional business counseling as well on a variety of topics such as marketing, accounting, loans, management, and human resources.
The Nevada District Office of the U.S. Small Business Administration also offers resources for small businesses in the state. You can visit their website for information about events, SBA programming, news, and more.