How to Start an LLC in Nevada? (Cost & Set Up Guide)

Jon Morgan
Published by Jon Morgan | Co-Founder & Chief Editor
Last updated: February 16, 2024
FACT CHECKED by Lou Viveros, Growth & Transition Advisor
Methodology
We meticulously research and verify the information presented in our articles. By consulting reliable sources and ensuring factual accuracy, we are committed to providing readers with well-informed, trustworthy content.

If you are an entrepreneur looking for a business structure, starting a limited liability company in Nevada may be a good option. You simply have to follow the business protocol and file the necessary requirements.

With a decade of experience as a business consultant, I have helped countless clients with LLC formation and organization.

I also consulted legal experts in the field of business to provide you with a comprehensive guide on how you could start a limited liability company in Nevada.

Plus, you can engage one of these Nevada professional LLC services to handle the formation of your LLC.

Quick Summary:

  • To start an LLC in Nevada, entrepreneurs must follow specific state protocols and file the necessary documents, including selecting the type of LLC, choosing a unique name, appointing a registered agent, and filing Articles of Organization​​​​​​.
  •  After forming an LLC, it's important to create an Operating Agreement, apply for an Employer Identification Number (EIN), and open a dedicated LLC bank account to manage business finances​​.
  • According to the U.S. Small Business Economic Profile, 312,702 small businesses account for 99.2% of all Nevada companies, indicating a strong entrepreneurial presence in the state.
  • In my opinion, Nevada's comprehensive support for LLCs, combined with its economic landscape, makes it an ideal state for entrepreneurs seeking growth and protection.


How To Form an LLC in Nevada

Giving pen to someone to answer form

To form an LLC in Nevada, prepare all the documents and follow the steps provided by the Nevada Secretary of State.

Here are the following information and documents you will need in order to start a limited liability company in Nevada:

1. Choose the Type of Your LLC (Mandatory)

In Nevada, you can choose from several types of limited liability companies, each with its own set of advantages and disadvantages:

  1. Single-Member LLC: Ideal for solo entrepreneurs, offering complete control. However, it may be viewed as less credible by banks and investors.
  2. Multi-Member LLC: Suitable for businesses with multiple owners, providing shared control and potentially more resources. But it requires more complex management and has the potential for internal conflicts.
  3. Manager-Managed LLC: This structure is beneficial when members prefer not to be involved in daily operations, delegating management to a selected individual or group. The drawback is less direct control by members over the business.
  4. Member-Managed LLC: Here, all members participate in running the business, fostering collaborative decision-making. However, this can lead to slower decision-making processes and possible disagreements.

I've observed firsthand the impact of LLC structure choices on business operations. In the case of a Nevada-based client, their initial decision for a Member-Managed LLC facilitated excellent team collaboration.

However, as the business expanded, this structure led to slower decision-making. Recognizing this, they transitioned to a Manager-Managed LLC, which streamlined their processes and reduced internal conflicts.

2. Choose a Name for Your Nevada LLC (Mandatory)

Woman giving thumbs up

The name you choose for your LLC needs to be distinguishable from other business names in the state.

It is not enough that you are differentiating your business name by using special characters or including numbers; it needs to be unique among all businesses registered with the Nevada Secretary of State office.

To check if a business name is available, search for it on the official website of the Nevada Secretary of State.

There are a couple of rules you need to follow for business names:

  • The business name must end with the words "Limited Liability Company" (i.e., XYZ LLC)
  • The name should not include terms like Incorporation, Corporation or their equivalent abbreviations.
  • Avoid using government related terms such as federal, agency, or revenue service to prevent confusion as to the nature of your business.

You can also apply for a DBA (doing business as) name, which is different from the official business name.

This can be helpful if you want to use a business name that's easier for customers and clients to remember (such as your personal last name).

DBA doesn't have to contain the LLC abbreviation in the name.

Related Articles:

3. Select a Registered Agent (Mandatory)

LLC's registered agent is an individual or business entity the LLC designates to receive legal documents on its behalf. They can also help with other documents, such as the operating agreement.

Your registered agent is an individual or business that agrees to accept official communications from companies and government agencies for you when you are not available.

The Nevada Secretary of State requires all businesses in their state to have a registered agent.

Companies and government agencies will send you important legal notices, summonses, complaints, subpoenas, and other official papers through registered mail to the address of your LLC's registered agent.

The registered agent is legally required to accept them for you before forwarding those letters to you.

You can also hire one of the best registered agent services in Nevada to do this job for you.

4. File Nevada Articles of Organization (Mandatory)

Close up image of woman analyzing business graph

Nevada LLC Articles of Organization is a business formation form that you must file with the Nevada Secretary of State's office to start a Nevada LLC in their state.

The Articles of Organization must include the following information:

  • LLC's name
  • Business location
  • Management structure
  • Registered agent contact information

A filing fee must accompany the articles.

Once filed, articles are effective within 60 days from their date of submission to the state agency, unless you file an application for expedited processing, which will guarantee that your articles become active in 24 days.

As soon as articles become active, they will be available for viewing on the official website of the Nevada Secretary of State's office under "Business Entity Search."

"The incorporation process in Nevada stands out for its affordability. Nevada distinguishes itself by providing three distinct levels of expedited approval, allowing you to establish your Nevada LLC according to your own timeline. Impressively, it's possible to have your Nevada LLC application approved in as little as one hour."

-Jon Morgan, Co-Founder & Chief Editor of Venture Smarter

Steps to Take After Forming an LLC in Nevada

After establishing your LLC in Nevada, you have to open a business bank account and acquire the required business licenses and permits.

Shaking hands as a sign of agreement

You need a Nevada LLC operating agreement for your Nevada limited liability company because it is a legally binding contract that governs your business.

An LLC operating agreement is a legal document that establishes your LLC's operating rules, which include the following:

  • An operating agreement covers how much money each member will contribute to the Nevada startup costs  and what percentage each person has in it when these payments are due.
  • It defines operating procedures and financial contributions.
  • It outlines the managerial structure of the company.

Operating agreements need to outline operating procedures and the operating authority of managers or members in charge of the LLC's daily activities and responsibilities.

An operating agreement filed by you or a registered agent should also include how much money each member will contribute to the Nevada startup costs as well as what percentage of profit they can expect annually.

It is important to file your employer identification number (EIN) with the Internal Revenue Service.

An IRS employer identification number is necessary to open business bank accounts, sign up for employer-sponsored benefits, and file taxes.

EINs are also needed when you want to hire employees or independent contractors in some cases.

You can quickly get an EIN online from the IRS website, which only takes about five minutes to complete.

It costs nothing and will be active immediately when you submit your application.

Holding a bank card

Before your business formation is complete, you will need to open an LLC bank account.

A business bank account is a bank account that you set up with your LLC's name. This means it can be used to receive business income and make business purchases, but members cannot withdraw the money for personal use.

The business owner needs to open an LLC bank account because it offers features such as checks, which will allow the business owner to keep track of business expenses.

The LLC owners must keep business and personal money separate, which means that it is not wise to use a business bank account for personal purposes.

This will help avoid IRS penalties in case you are audited by the agency later on because they can tell if business income was used illegally for something other than business-related costs.

8. File Your LLC Annual Report

The Annual Report lists your officers, directors, and registered agent service. It's obligatory for all Nevada and Foreign LLCs authorized to do business in Nevada.

The LLC Annual Report is also called the Annual List. The first Report or List is filed when you are filing your Articles of Organization.

In the case of a foreign LLC, it is an Application for Registration of a Foreign Limited-Liability Company.

Since you will do this annually, the due date for every other annual Report is the last day of the month when the anniversary falls.

The filing fee is $150. It can be filed online through Silverflume, Nevada's Secretary of State's web-based business filing portal, or you can download the form and send it by postal mail.

9. Obtain Business License and Permits

A professional limited liability company needs business licenses to legally operate in the state.

Professional services include, but are not limited to, accounting, architecture, design, lawyers, and doctors.

If the service does not fall under one of these categories, it does not mean that you do not need one.

I've encountered numerous clients who underestimated the necessity of a business license, especially in non-traditional fields. I assisted a client in the digital marketing field to establish an LLC, and we discovered that despite the unconventional nature of the business, a state business license was still required in Nevada.

It is better to be sure and check if your business needs a state business license or a local business license.

You can do it easily online on the Nevada Department of Business and Industry website. Some of them even require special permission from local municipalities before they issue licenses.

10. Choosing Your Tax Structure

Stack of files on table in front of woman

In Nevada, LLCs can select from several tax structures: single-member, multi-member, C-Corp, or S-Corp. Each has distinct advantages and drawbacks:

  • Single-Member: Profits and losses are reported on the owner's personal tax returns. This simplicity is advantageous for small businesses but may lead to higher personal tax rates.
  • Multi-Member: Similar to single-member, but for multiple owners. It provides the benefit of shared tax responsibilities but requires more complex tax filings.
  • C-Corp: The LLC is taxed separately from the owners, which can be beneficial for retaining earnings within the company. However, it faces double taxation—once at the corporate level and again on dividends.
  • S-Corp: Avoids double taxation, as profits/losses pass through to the owner's personal tax returns. This is often preferred for its tax-saving potential but has stricter eligibility requirements.

I find the S-Corp structure often advantageous for small to medium-sized LLCs due to its tax efficiency and avoidance of double taxation.

LLCs can change their tax classification by filing a form with the IRS, ideally at the start of the fiscal year. For significant changes, like switching to or from a C-Corp, it's advisable to consult a tax professional.

Nevada imposes the Modified Business Tax for businesses with quarterly wages over $50,000 and the Commerce Tax for businesses with annual gross revenue exceeding $4 million [1]. These taxes should be factored into your decision when choosing your tax structure.

Benefits and Drawbacks of an LLC in Nevada

Businesswomen looking at a tablet

Benefits:

  • No State Income Tax: A major advantage in Nevada is the absence of state income tax. This can significantly reduce the overall tax burden on an LLC, making it a financially attractive option for business owners.
  • Asset Protection: Nevada offers strong protection for LLC members against creditors. This means personal assets are generally well protected in the event of business debts or lawsuits.
  • Business-Friendly Environment: Nevada's business-friendly climate, featuring minimal reporting and streamlined disclosure, simplifies operations. With 312,702 small businesses accounting for 99.2% of all companies, as reported by the U.S. Small Business Economic Profile, Nevada fosters a vibrant environment for startups and small enterprises [2].
  • Privacy: Unlike some states, Nevada doesn't require the disclosure of LLC members or managers on public records, offering enhanced privacy.

Drawbacks:

  • Higher Initial Fees and Annual Fees: Compared to some other states, Nevada has relatively higher fees for LLC formation and annual maintenance.
  • Commerce Tax for Larger Businesses: While beneficial for smaller enterprises, businesses in Nevada with gross annual revenue over $4 million are subject to the Commerce Tax, which can be a disadvantage for larger LLCs.
  • Strong Competition: Nevada's appealing business climate fosters intense competition in several sectors, posing challenges for emerging enterprises. Moreover, according to the Statistics of U.S. Businesses, employees of small businesses make up 42.5% of the state's workforce, underscoring their critical contribution to Nevada's employment landscape [3].
  • Limited Local Market: Depending on the business type, the local market in Nevada, outside of tourism-centric areas like Las Vegas, might be limited, potentially necessitating a focus on national or online markets.

DIY vs. Professional LLC Formation

Stack of files being checked

When forming an LLC, you can choose between doing it yourself (DIY) or hiring a professional service. Each option has its pros, cons, and risks.

DIY LLC Formation:

Pros:

  • Cost-Effective: Typically less expensive as it avoids professional service fees.
  • Learning Experience: Provides a deep understanding of the business formation process.

Cons:

  • Time-Consuming: Requires substantial time to research and understand legal requirements.
  • Risk of Errors: Without legal expertise, there's a higher risk of mistakes in paperwork and compliance.

Professional LLC Formation:

Pros:

  • Expertise and Accuracy: Professionals are well-versed in state-specific regulations, reducing the likelihood of errors.
  • Time-Saving: Frees up your time to focus on other aspects of your business.
  • Compliance Assistance: Many services offer ongoing compliance support.

Cons:

  • Cost: More expensive due to service fees.
  • Less Personal Control: Some entrepreneurs may find less involvement in the process less satisfying.

FAQs

Can I Get an LLC for Free in Nevada?

You can’t get an LLC for free in Nevada. The initial filing fee for the paperwork you need depends on the state in which you are trying to start your LLC.

Can I Form an LLC in Nevada on My Own?

You can form an LLC in Nevada on your own by following the steps and submitting the required documents.


References:

  1. https://tax.nv.gov/Commerce/FilingRequirementFAQs/
  2. https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-NV.pdf
  3. https://www.census.gov/programs-surveys/susb.html

About The Author

Co-Founder & Chief Editor
Jon Morgan, MBA, LLM, has over ten years of experience growing startups and currently serves as CEO and Editor-in-Chief of Venture Smarter. Educated at UC Davis and Harvard, he offers deeply informed guidance. Beyond work, he enjoys spending time with family, his poodle Sophie, and learning Spanish.
Learn more about our editorial policy
Growth & Transition Advisor
LJ Viveros has 40 years of experience in founding and scaling businesses, including a significant sale to Logitech. He has led Market Solutions LLC since 1999, focusing on strategic transitions for global brands. A graduate of Saint Mary’s College in Communications, LJ is also a distinguished Matsushita Executive alumnus.
Learn more about our editorial policy

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *