How to Incorporate in Nevada vs. How to Start a Nevada LLC
A Guide to Choosing the Best Business Entity in Nevada
Are you interested in starting a business in Nevada, but not sure if you should form an LLC or start a corporation? Active Filings has the guide for you! We’ll walk you through the advantages and disadvantages of incorporating or forming an LLC in Nevada. Throughout this Nevada-specific corporation and LLC formation guide, you’ll discover exactly how to form either an LLC or corporation in Nevada, and learn the disadvantages and advantages of each business type.
Once you’ve decided which business structure best meets your needs, you can hire Active Filings and have our professionals streamline your incorporation process. At Active Filings we offer our customers peace-of-mind by establishing their companies fast, efficiently and at an affordable price. When you work with Active Filings, we’re confident that you’ll find out in no time why we are America’s most reliable business incorporation service.
Hire us to form your LLC or Corporation in Nevada!
LLCs vs. Corporations
People looking to start a business often ask whether they should set up an LLC or incorporate for their new venture. Like everything else in life, the answer depends. Below you’ll find the three factors we think will help you make an informed decision.
- Ease of maintenance
LLCs have the appeal of providing entrepreneurs lower overall annual maintenance and paperwork, creating a big selling point for the LLC structure. Corporations require annual meetings, directors meetings, recorded meeting minutes, and a notable amount of paperwork, while LLCs have little to no maintenance of this type. LLCs not only require less resolutions, but can make executive decisions without the need to hold an official meeting. - Desired tax structure
Unlike a corporation, which must pay its own taxes, LLCs are known as pass-through entities, meaning their tax structure is designed to have its profits, losses, credits, and expenses pass directly through to the owners, who report them on their personal income tax returns (similar to if the owners had a partnership or sole proprietorship). Corporations have a default tax structure known as the C corporation. This structure imposes a double-taxation, where the net income is initially taxed, and then taxed a second time as personal income after the profits and losses are distributed to the shareholders. At first glance, double taxation may seem like a downside, but for the right business it can provide advantages, such as reinvesting profits into the business. - Investors
Investors and shareholders often prefer doing business with corporations. The structure of a corporation is reputable and familiar. Investors know exactly where their time and money will be going with a corporation. LLCs can still be divided into percentages for members, but there is more trust behind the prominence of investing in stock within a corporation. Consider a corporation if you are serious about attracting investors.
Let’s also not downplay the notion of prestige. When you hear the word corporation, many people think of Amazon, Apple, Walmart, and Nike. While the LLC is perfect for the small to medium-sized business, it doesn’t carry the same cache as the corporation. While LLCs first came into being in the late 1970s, the corporation is the oldest recognized business entity in the US.
Note that whether you form an LLC or a corporation, you’ll need to file a Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN) once your company is officially formed with the state of Nevada. This report provides the federal government with identifying information about your company and those with the most control over profits and business operations. However, unlike state filings, the information shared in your report does not go on the public record and there is no filing fee. (Though if you don’t want to file this on your own, we offer BOI filing service for just $25.)
Nevada LLCs vs. Nevada Corporations
While we’ve already broken down the differences between an LLC and a corporation, we’re going to dig a bit deeper into the pros and cons of forming an Nevada LLC or corporation. Take a look below to see what makes Nevada LLCs and corporations unique:
- Anonymity
Nevada is one of two states that has not signed the Information Sharing Agreement with the Internal Revenue Service. This limits the exposure of your personal information in the public record. Even if Nevada agreed to share information with the IRS, there is no information to share, as the state does not impose any corporate or personal income tax. - Liability Laws
Nevada’s liability laws are like a kevlar vest! Nevada is the only state that provides “charging order protection” for both corporations and LLCs. A “charging order” is a type of lien that gives the lien holder only an economic interest over the interest in the limited liability company to which the lien has attached. This is important, because it prevents personal creditors from seizing corporate shares and taking control, as they are able to do in other states. - Taxes? We Don’t Need No Stinkin’ Taxes!
Nevada has no state income tax, no corporate or franchise taxes, and no taxes on corporate shares or profits. Even the average effective property tax rate for the state is lower than the national average. If you’re looking for a state that doesn’t always have it’s hand in your pocket, Nevada is a pretty great place to start. - Filing Costs
To form a Nevada corporation you’ll pay $725 ($75 for Articles of Incorporation, $150 for the Initial List of of Directors/Officers, $500 Business License). That same corporation will pay at least $650 every year in annual report filing fees. LLCs get hit with some hefty costs as well. To form an LLC in Nevada you’ll pay $425 ($75 for Articles of Organization, $150 for the Initial List of Managers/Members, $200 Business License). The LLC is also on the hook for at least $350 every year to file it’s annual report. And for any filing, if paying by credit card, there’s also a 2.5% processing fee. Nevada has a lot going for it with regards to being a business friendly state, but it’s filing fees are steep.
Nevada LLC or Nevada Corporation? Final Answer.
When you factor in an LLC’s ease of maintenance, desired tax structure, and not having to go out and woo business suit-wearing investors, the Nevada LLC is a pretty awesome. That said, because Nevada makes it so affordable to run a business (no taxes, excellent liability laws, and anonymity), forming a corporation is nearly as easy as an LLC, with just a few added wrinkles (and higher filing costs). But in our estimation, the LLC’s ease of use, tax flexibility, and simplicity rule!
How to Incorporate in Nevada
In most states, you just have to file an Articles of Incorporation, however, in Nevada, you also have to file State Business License and Initial List of Managers or Managing Members. It costs $75 to file your Nevada Articles of Incorporation, $500 for a Nevada Business License, and $150 for your Initial List of Officers and Directors. Your total, out the door cost for forming a Nevada corporation is $725 (plus 2.5% processing if paying with a credit card). An outlay of that much money is scary, and you’d hate to file something incorrectly if you file alone. Hire Active Filings, and for just $25 more you can be sure that your Articles and all other paperwork will be expertly filed.
Unlike other states, Nevada does not require corporations to designate as a “Corporation,” or “Incorporated,” unless the corporation is a person’s name. But, if your corporation has plans to grow beyond Nevada, it doesn’t hurt to add a “Inc.,” or “Corp.”
A resident agent can be a person (like yourself) or a service that you hire. The benefit to NOT being your own resident agent is that you can keep your name and address off the public record, allowing yourself a bit more privacy. They will have to sign a Nevada-specific “acceptance form,” which is just to ensure that the corporation’s registered agent has accepted the designation. Keep it simple and hire Active Filings.
This is the Nevada street address that will become a permanent part of the state’s public record. When you hire Active Filings, our address goes here.
List the numbers of shares you wish to create and their par value. Their par value is the price listed on stock certificates. This is often the lowest value at which a share will be traded.
Include the name and street address of each director on your corporation’s board of directors. A business address is sufficient. Use ours when you hire Active Filings!
Most corporations are general for-profit corporations and aren’t required to complete this section. Benefit corporations must state a specific purpose that explains how they benefit the public. If you are planning to form a B-Corp, check this box.
Your incorporator signs your Articles of Incorporation. Incorporators must include their names and addresses. You need at least one incorporator, but it doesn’t have to be anyone in your corporation. Active Filings will be your incorporator if you hire us to be your registered agent.
Along with your Articles of Incorporation, you’ll have to submit your Initial List, which must be signed by an officer and must include the names and addresses of your president, secretary, treasurer, director and any other officers.
How to Form a Nevada LLC
In most states, you just have to file an Articles of Organization. However, in Nevada, you have to file an Articles of Organization as well as a State Business License and Initial List of Managers or Managing Members. It costs $75 to file your Nevada Articles of Organization, $200 for the State Business License, and another $150 for filing the Initial List of Managers or Managing Members of your LLC (and don’t forget the 2.5% processing fee if paying with a credit card). These two extra documents are mandatory. An outlay of that much money is scary, and you’d hate to file something incorrectly if you file alone. Hire Active Filings, and for just $25 more you can be sure that your Articles and all other paperwork will be expertly filed.
Your name must include “Limited-Liability Company,” “Limited Company,” or an abbreviation like “LLC.” Example: Slice ‘O Ham, LLC.
You can act as your own registered agent or you can hire a person or business to act as your agent. Registered agents receive important mail and documents from the state, as well as any lawsuits that may be filed against a business. Registered agents have to be able to accept all such correspondence during regular business hours, which is why it often makes sense to hire this service out. Your agent will need to sign the Certificate of Acceptance of Appointment by Registered Agent. If you or another non-commercial person act as your agent, you’ll have to include their Nevada street address, which becomes a part of the permanent public record of the LLC. Keep things simple. Choose Active Filings.
If you want your LLC to have an expiration date, you can include an end date in your Articles of Organization. Skip this section if you want your company to continue indefinitely.
Most LLCs are managed by members, but if you don’t plan to oversee the day-to-day operations, you can turn over decision-making powers to one or more managers. Include the name and business address of each member or manager.
Your organizer doesn’t have to be anyone in your LLC, they’re just the person that signs and submits your Articles. We’ll do this when you hire Active Filings.
Nevada wants an “Initial List” of your LLC’s managers (or managing members) and their contact information. If submitting a paper form, the fee is $150. Your Business License Application doesn’t require a separate form, just an additional fee of $200. You must include these items and fees in your Order Description on page 5. Or hire Active Filings and let us do the heavy lifting to form your Nevada LLC.
Nevada Annual Report Requirements
In the state of Nevada, all business entities must file an annual report including a list of all corporate officers, members and managers. They must also pay a yearly business licensing fee. Nevada reports are filed each year. Most businesses will be subject to a business license renewal fee, which is a nice way of saying “give us money to keep doing business.” Foreign and domestic corporations have a $500 annual license renewal fee, and all other business entities pay $200. Nevada charges a $75 late fee for failing to file an annual report and an additional $100 for submitting a late business license renewal fee. That’s a total of $175. Save that money and hire Active Filings. Everything will be filed on time and correct so you can rest easy.
How do I file my annual report?
To File Online:
Go to the Nevada Business Portal page.
Select “File Annual or Amended List.”
You’ll need to have an account. If you don’t have an account, you will need to create one by clicking “Register.”
Once you have an account you’ll simply log in, enter your business information, pay fees ($60) if you are changing your registered agent, and finish up by paying with your credit card. Credit card payments incur an extra 2.5% processing fee.
To file by mail you’ll need to go online to Nevada’s Business Forms page and print out the Annual or Amended List. Fill it out and write a check for whatever you owe:
LLCs pay $350 ($150 Annual List + $200 Business License).
Corporations pay $700 ($200 Annual List + $500 Business License).
Mail your check and forms to:
Secretary of State
Nevada State Capitol Building
101 North Carson Street, Suite 3
Carson City, NV 89701
Nevada Business Taxes
No one likes taxes. America was built on not liking to pay taxes. In Nevada you’ll still have to pay Federal taxes, but not state income taxes, which is kind of nice.
What is the Nevada corporate net income tax rate?
No tax. There is a $500 a year “business license tax,” but it’s just a flat fee and you file it with your annual report.
What is the Nevada personal net income tax rate?
There is none.