One of the most important decisions you’ll have to make for your remote business is choosing where to form your LLC. Got Nevada on your mind? You’re not alone. In 2020, over 283,333 small business owners called the state of Nevada home. That’s over 99.2% of Nevada businesses!
You might be excited to hear that
Nevada has no corporate income tax. However, unless your LLC is taxed as a
C-Corp, this won’t apply to you (which is the case for 99%+ of you reading
this). These are the kinds of facts you need to know!
If you’re thinking about forming
a Nevada LLC, here are four things you’ll want to consider before you get
started.
1. Nevada Offers Your Business Strong Anonymity
Be aware that each state
determines their rules and statutes regarding LLCs. Nevada is one of four
states (Delaware, Nevada, New Mexico, and Wyoming) that allows you to run an
anonymous LLC.
What is an Anonymous LLC
An anonymous LLC is a limited
liability company that does not require owners to disclose personal
information, such as your name and address.
However, despite the LLC owner
maintaining anonymity, the names and addresses of all LLC managers must be
disclosed within the Articles of Organization, as well as the annual List of
Officers. Both of these documents are on public records that can be obtained by
searching through the Nevada Secretary of State website.
An anonymous LLC can protect you
and your business from hackers, stalkers, and unwanted mass marketers. But
that’s far from being the only advantage!
If you decide to form an
anonymous LLC in Nevada, you’ll enjoy the following benefits:
- All of the same perks you would receive with a “regular LLC” - the difference is that you can keep your name and address private as an owner.
- No state income tax (Nevada is one of the 7 states that does not have state income tax)
- Strong corporate veil that protects individuals from liability (you’ll read more on that in section #4)
- It’s important to note that forming an anonymous LLC is not a magic cure-all to all of your business privacy woes. It does not exclude your business from paying taxes, nor does it guarantee full anonymity from your bank, lawsuits, or the IRS.
Why Form an Anonymous LLC
Perhaps you work full-time and don’t want your personal name attached to your side business. Or, maybe you operate out of your home address or a local coworking space and don’t want solicitors (or worse… angry customers, creditors, vendors) calling/texting/showing up at your workspace unannounced. Whether you’re concerned about your safety or just want to maintain your privacy for good measure, there are a number of legitimate reasons to form an anonymous LLC.
There are certain situations in
which your name and address could still be made public. If you want to take
your privacy one step further, signing up for a virtual mailbox can add an
extra layer of anonymity to your LLC.
Make Sure Your Privacy is
Protected 24/7 With a Virtual Mailbox
The best way to protect your
privacy when forming your anonymous LLC is by obtaining a virtual mailbox,
which provides you with a commercial business address to use for documentation.
This way, you’ll never have to worry about your personal information being
compromised in the event of a subpoena or lawsuit.
2. Nevada Allows You to Form a Series LLC
A series LLC is a unique type of
limited liability company that offers business owners more flexibility than a
single-member LLC. If you’re not familiar with the term, a series LLC consists
of a “parent” LLC that contains multiple “series” established within the
original. Each series operates as if it is a separate entity, meaning it can
have its own business name, members, managers, assets, purpose, bank accounts,
and records.
Pros of a Series LLC
The most notable benefits of a
series LLC include:
Save money on filing fees – Your
business will pay just one filing fee, regardless of how many series are operating
under the parent LLC.
Protection for each individual
series – If one series gets sued, the others won’t be held liable for any
debts, obligations, or expenses.
More options – A series LLC
offers flexibility when it comes to splitting management and financial
decisions, since each series functions independently from one another.
Cons of a Series LLC
There is one major disadvantage
that you may want to take into consideration when it comes to a series LLC.
Paying state and federal taxes can be tricky, since there are no uniform rules
or guidelines laid out. For this reason, you should seek professional tax
services.
Why Form a Series LLC
One of the most common reasons
business owners decide to form a series LLC is because of the liability
protection it offers. It can also save you stress and money in the long run.
Picture this: you are a real estate investor who owns several individual properties. Instead of creating a new LLC for each of your assets, you decide to create a series LLC, with each property under a new series. In the event that one of your properties gets sued, your other series (i.e. properties) will not be liable, and the remainder of your assets will be shielded from any risks.
You could also form a series LLC
to separate subsidiaries within one singular business. For example, you could
create a new series for each department, location, product, etc.
3. You’ll Need to Submit (and Pay For) Three Documents
When you form your Nevada LLC,
you’ll be responsible for submitting three documents to the Secretary of State:
your Articles of Organization ($75), Initial List of Managers or Managing
Members ($150), and a State Business License ($200). The total filing fee for
all three is $425.
The easiest (and fastest) way to submit these documents is online.
Articles of Organization- Think of your Articles of Organization as your business’s birth certificate. This document will contain basic information related to your LLC.
Initial List of Managers or Managing Members -The Initial List of Managers or Managing Members should contain the name(s) and address(es) of the managers or members of the LLC. You will be required to file this document annually, and it’s due by the last day of the month following your filing of your Articles of Organization.
State Business License -Every business operating out of the state of Nevada is required to obtain a state business license. These are issued by the Secretary of State and must be renewed annually. The easiest way to apply is online, but you can also download the appropriate forms and apply by mail.
Note: You might also need to
acquire 1) a local license within the city/county in which you plan to operate
and 2) a business permit if you plan to operate within a regulated industry.
Application processes will vary depending on your jurisdiction.
4. Don’t Use a PO Box for Your Nevada LLC
There’s one step you’ll want to
skip altogether when it comes to forming your Nevada LLC: signing up for a PO
box. A PO box is not an acceptable physical address when it comes to forming
your LLC. In fact, your paperwork will be rejected if you attempt to use one!
What should you do if you already
have a PO box? Sign up for a virtual mailbox, which gets you a US-based
business address. Once you’ve done this, you can request to close your PO box.
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