Nevada, like most states, allows business owners to form limited liability companies, which are flexible business organizations that combine characteristics of unincorporated partnerships with corporations. Prospective and current LLC owners can find information about Nevada LLC requirements from the Nevada Secretary of State.
In a partnership, the profits and losses flow through the individual partners for tax purposes. In a corporation, the government taxes the corporation on any profits and then taxes the corporate owners individually on any income from the corporation. LLCs receive partnership tax treatment and therefore avoid the double taxation that corporations are exposed to. In this respect, LLCs are like partnerships. However, an LLC limits the liability of its owners, and the company is treated like a separate entity for liability purposes. In that respect, an LLC is like a corporation.
Nevada’s LLC laws are located in Chapter 86 of the Nevada Revised Statutes. Laws on LLC mergers, conversions and exchanges are found in Chapter 92A of the Nevada Revised Statutes. This information applies to all Nevada business entities including LLCs, corporations and partnerships. The IRS does not have a classification for LLCs, so the IRS permits LLC owners to file taxes under the rules of partnerships, sole proprietorships or corporations. Nevada does not have state corporate income tax, so Nevada LLCs do not have to pay income tax to the state.
Nevada Secretary of State
To form an LLC, members must file articles of incorporation with the Nevada Secretary of State. The Secretary of State provides information for the rules and procedures of filing articles on their website, including what information the LLC organizers must provide. In addition, the Secretary of State provides information for all fees that LLC organizers must pay to register an LLC in Nevada. Once members form an LLC, they must provide the Secretary of State with information about the LLC’s registered agent -- the person or company who can accept important mail on the LLC’s behalf -- as well as all members and managers of the LLC.
Nevada law considers LLCs that operate in other states or countries as foreign LLCs. Foreign LLCs must pay state corporate income tax in the state in which it is registered. To operate in Nevada, a foreign LLC must register with the Nevada Secretary of State and pay the appropriate filing fee. The Secretary of State also provides information for rules and regulations for foreign LLCs on its website.
Please contact a qualified attorney or tax professional licensed to practice in Nevada to find out if forming an LLC in Nevada can meet your business goals and needs. This article should not be construed as legal advice. It is for educational purposes only.