Are you looking to form a limited liability company (LLC) in the state of Nevada, but you’re not sure how the formation process works? There are several important steps when it comes to creating a Nevada LLC that is compliant and able to do business in the state.
What is a Nevada LLC?
The Nevada LLC is one of the most popular business structures in state. It's a more casual and flexible type of business than a corporation, but includes the same personal asset protection you get with a corporation. That means you aren't personally liable for debts or lawsuits against your business. This is a critical protection that is 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.
Forming an LLC in Nevada (in 6 Steps)
Step One) Choose an LLC 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 take into consideration when selecting a name for your business:
Legalities: In the state of Nevada, every limited liability company is required to have either the initials “LLC” or the phrase “limited liability company” in the name. In addition, you cannot include any words that refer to other business types (like “corporation” or “incorporated”), and you also can’t use words that are typically used to refer to specific kinds of businesses (like “bank” or “law office”).
Explanatory Naming: Another aspect to consider is including language that explains what your business does ― for example, if you’re a plumber, put the word “plumber” or “plumbing” in your LLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
Do You Like It?: At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your LLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming an LLC is to not get too attached to any one business name until you have either reserved the name with the state of Nevada, or you’ve officially formed your business. Nevada makes this process rather easy, as you can search their entire database of business names at this link. Simply search your desired name and if no results pop up, then your name is available. If you’re not yet ready to form your LLC, you can reserve your desired name; simply fill out and print this Name Reservation Request form to submit to the state. Reserving your name gives you an extra 90 days to get your business affairs in order. There is currently a $25 fee to reserve a name.
Step Two) Designate 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.
According to the Nevada Secretary of State,
A registered agent is an agent of the represented entity authorized to receive service of any process, notice or demand required or permitted by law to be served on the entity.”
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, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
Our Recommendation: At the end of the day, we recommend designating a Registered Agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record. Incfile and Northwest Registered Agent both offer a free Registered Agent service when you utilize their services to form an LLC. Both are fast and affordable. In fact, they’re the best available.
Step Three) File Formation Documents with State
Once you are ready to form your Nevada limited liability company, you will fill out the articles of organization.
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
- Name and address of your registered agent
- Management style (member-managed or manager-managed)
- Name(s) and address(es) of the LLC’s manager
- Name and address of the LLC’s organizer
- Signature of organizer and registered agent
- Effective date
Cost to Form an LLC: The state of Nevada charges a $75 fee to form an LLC.
Processing Time: It takes approximately 2-3 business weeks for the state to process your Nevada LLC formation paperwork and get your finalized documents in the mail to you. Nevada does not offer any expediting services. Online filings are processed more quickly, and if you want a 24-hour turnaround, you can choose to pay a $125 expediting fee. You’ll also need to provide an Initial List of Managers or Members, which has a $150 fee. Please note that the estimate of business days begins once ALL required paperwork is in order and filed correctly.
Step Four) Create 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 here, 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) Handle Taxation Requirements
The vast majority of LLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important LLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
When it comes to state-level LLC taxes, Nevada levies these taxes based on the nature of your business. Normally, If your LLC is considered a pass-through entity—usually a sole proprietorship or partnership—you’ll pay state income taxes on your individual tax returns. Most states require corporate income taxes for LLCs taxed as corporations, but Nevada does not have a state corporate or a personal income tax. (There is a different fee instead, which we’ll cover in a later section).
LLC owners with employees are also required to pay a number of taxes. First, employers must pay withholding taxes on employee wages. Essentially, you’ll keep back a portion of an employee’s wages and forward that tax to the federal government.Normally, these go to both the state and the federal government, but Nevada is one of the few states without such a requirement. Put simply, you’ll pay withholding taxes to the federal government but not the state. You can learn more about federal withholding tax rates here.
Nevada employers are also required to make payments to the state’s unemployment insurance. While it’s not technically a tax, you do need to pay it on a regular basis, so we’ve included it in this section. You can learn more about this fund at the Nevada Department of Employment, Training, and Rehabilitation.
In addition to these general taxes, Nevada also requires taxes specific to particular industries. You can learn more about Nevada’s business taxes here.
Depending on where in Nevada your business is located, you could also need to pay some local taxes. The most important local tax is the sales tax; in Nevada, the sales tax rate is extremely dependent on what county and city you’re in. You can look up the rate for your location on this map. We also recommend contacting your city or county clerk to be sure you don’t overlook any other important details.
Step Six) Obtain Business Licenses and Permits
Unlike many states, the state of Nevada does require a general business license that each LLC needs to acquire in order to do business. And before you celebrate the absence of Nevada income taxes, take note: the fees for this state license are higher than most: you’ll need to pay $200 both to get the license and renew it each year. You can learn more about the state license with this FAQ. (This makes your total LLC start-up cost $425, so you’ll want to budget accordingly).
Nevada also upholds the licensure required by the federal government for certain occupations, including agriculture, aviation, and more. Please consult the Small Business Association’s listings for federally-regulated industries requiring licensure.
Other than that, what licenses you’ll need will depend on where you’re located. Most licenses are regulated on the city level in Nevada. Fortunately, with the state’s New Business Startup Guide, you can easily browse the requirements specific to your city. You can also browse a text list of licenses and permits here.
Would you prefer to have a professional form your LLC?
If you would prefer to have a professional handle the paperwork for you, consider hiring an online incorporation service like LegalZoom and Incfile. To see which is the better option for you, check out our side by side comparison.
Next Steps: What to do After Creating a Nevada LLC
Open a business bank account: We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
Get Business Insurance. Every Nevada business with employees is strictly required to acquire workers’ compensation insurance. For more information on this policy, check out the Nevada Department of Industrial Relations. Essentially, this policy helps to pay your employees when a work injury or illness keeps them from working. After you obtain these legally required policies, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies.
Understand income reporting. Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year. Nevada provides several resources through SilverFlume to help offer guidance on income reporting for all types of businesses as well as the forms you’ll need.
Understand annual reporting. Nevada requires that all LLCs file an annual report. You can file online with SilverFlume or use the pdf version found here. Your annual report will essentially serve to update the state on any pertinent information regarding your business that has changed over the course of the last two years. In addition to this standard annual report, you’ll also need to submit an annual listing of managers or members. The fee for filing that document is $150, with a $75 late fee. You can file it with SilverFlume as well.
Find an accountant. We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how best to manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.