Starting a business is no easy feat, and where you choose to incorporate your business plays a significant role in your responsibilities as an entrepreneur.
Nevada has become one of the most popular destinations for incorporation in recent years. The Silver State has created the perfect environment for limited liability companies (LLCs), allowing them to enjoy low tax rates and strong asset protection.
But like any other state, Nevada has compliance requirements for LLCs. Fulfilling these obligations, from formation to filing annual reports on time, is crucial for maintaining a good standing with the state. Failure to meet them could result in penalties or even dissolution of the LLC.
That said, we’ve created a checklist you can use as a guide to Nevada’s compliance regulations. Below, you can see all the requirements your LLC must fulfill to keep your company legally sound:
Forming a Nevada LLC
The first step to compliance is forming your LLC properly. Nevada’s LLC formation process is straightforward. It consists of three key requirements:
LLC Name
According to Nevada laws, your LLC’s name must be distinguishable from others registered or reserved with the Secretary of State. It must also end with either of the following terms:
- Limited liability company
- Limited company
- Limited
- LC
- Ltd./Ltd. Co.
- LLC/L.L.C
The state also prohibits the use of terms like “accountant,” “bank,” “brokerage,” and “realtor” without the approval of the designated state department or agency.
Registered Agent
Almost all states require business entities to have registered agents. A registered agent is a person or company authorized to receive legal correspondence on behalf of your company.
You can assign anyone to be your LLC’s registered agent so long as they meet the following criteria:
- Must be over the age of 18.
- Must have a home or business address in Nevada.
- Must be available to receive legal correspondence during regular business hours.
Formation Documents
To establish a Nevada LLC, you must file these formation documents with the Nevada Secretary of State: articles or organization, an initial list of LLC members and managers, and a business license.
An LLC’s articles of organization typically include the following information:
- Registered name.
- Principal office address.
- Name and address of the registered agent.
- Management Structure
- Names and addresses of all LLC members.
Meanwhile, your initial list should include the names and addresses of your LLC members and managers. Nevada requires all LLCs to have at least one member or manager upon incorporation.
Lastly, you must obtain a business license from the Secretary of State. You can apply through the state’s SilverFlume business portal or get the forms through the Secretary of State’s website.
The filing fees for each document are $75 for articles of organization, $150 for the initial list, and $200 for the state business license. Altogether, the total cost of forming a Nevada LLC is $425.
Maintaining a Nevada LLC
Once your LLC is established, it must fulfill three compliance requirements to maintain its legal status:
Annual Reports & Business Licenses
Nevada requires all LLCs to file their annual report or list before or on the last day of the LLC’s formation month. For instance, if your LLC was formed on March 9, 2023, you must submit your annual report on March 9, 2024.
Annual reports allow the state to monitor your LLC’s activities. They should include information such as any changes in ownership, members, managers, and other notable modifications.
You must also renew your state business license on the same date. You can renew your Nevada business license for $200 through the SilverFlume business portal.
Business Taxes
Although Nevada doesn’t have individual and corporate income taxes, it does impose other tax types on LLCs, such as:
- Employer Taxes: Nevada LLCs with one or more employees must pay the state’s employer taxes, categorized as Unemployment Insurance (UI) and Modified Business Tax (MBT), to the Nevada Department of Taxation (DOT).
- Sales & Use Taxes: Nevada imposes sales and use taxes on certain goods and services. If your LLC plans on selling one of these taxable goods and services, it must obtain a sales tax permit from the DOT. Once registered, it must file its sales and use tax return monthly or quarterly.
- Gross Receipt Taxes (GRT): Nevada’s GRT is imposed on companies with over $4 million in gross revenue. The rates for this tax type vary depending on which category the business falls under. But generally, it ranges between 0.05% to 0.3%.
Importance of Maintaining Your Nevada LLC
Failure to maintain your Nevada LLC can result in severe consequences, such as:
Penalties & Fees
If you don’t file your annual reports on time, you could face penalties of up to $750. The state assesses penalties for each month the report is late. So, the longer you take to file your annual list, the bigger your penalties become.
Loss of Good Standing
Losing good standing with the state will make it difficult for your company to open bank accounts and conduct business in other states. It will also make obtaining licenses and permits for operating within Nevada even more challenging.
Dissolution of LLC
Nevada will administratively dissolve your LLC if it fails to file annual reports for two consecutive years. The state will not recognize it as a legal entity, and will lose the limited liability protections you’ve been granted.
Legal Consequences
Once your LLC has been dissolved, any contracts or agreements may be voided. You could also be held liable for any debts or obligations it incurs after its dissolution.
Key Takeaways
Ultimately, understanding the compliance requirements of a Nevada LLC is a fundamental aspect of running a successful and legally sound business.
Like any other business entity, Nevada LLCs have specific obligations to fulfill. Adhering to these requirements is the only way you can fully enjoy the benefits that it offers.
If you need help complying with Nevada’s requirements, look no further than NCH.
NCH offers premier business formation services to LLCs. Their team of business specialists will help you in your journey to success.