Nevada is a little classier than New Jersey. It’s more upscale and for people who want to be less accessible. Nevada is a tourist destination that is also the state where many fast-rising startups are locating themselves because it has low taxes, amazing weather, and an attractive workforce. And, the state is greener than it used to be. It’s a nice place to live and work.
It is very easy to start a corporation in Nevada while living anywhere in the U.S. or the world, compared to other states where you must have very good reasons for doing business there. Due to privacy laws, your name, business address, and other required information will not be publicly available through the Secretary of State (SS) website.
Nevada Business Facts and Environment
Nevada is one of the least developed and most populated states of the United States. It has a high rate of births, low rates of life expectancy, high rates of alcoholism, and a relatively low median household income.
It is also one of the least healthy states with higher than average rates of obesity, heart disease, diabetes, infectious disease, cancer, and other diseases. Despite these things, Nevada claims that it has some of the best beaches in the world.
Nevada is also the most economically developed state in the West. It has many huge companies such as casinos, hotels, and resorts of all kinds. The current unemployment rate varies significantly because of the seasonal nature of tourism and hospitality.
In 2005 there were about 85,000 people that had no work. In 2007, over 93,000 people were out of work, but that’s not unusual for the state. In the same year, there were about 150,000 that had stable jobs.
How to start incorporation in Nevada?
If you are looking for how to incorporate in Nevada, it can be done online through the Nevada Secretary of State website. It’s a simple three-page document that is standard to all states, and you must sign it in front of a notary public or at the county clerk’s office.
There is an annual $200 fee for filing and maintaining your business paperwork, which can be paid through the online filing process or when you deliver your documents to the county clerk’s office.
Step 1: Decide on a Business Structure
The most important thing you need to know is that the state of Nevada controls what you can and cannot do with your business. There are common business structures that all states recognize, such as corporations, LLCs, and partnerships. You should also know a few other things about Nevada, specifically if you plan to form a corporation there.
I. You can form a single-member LLC, which is the same as a sole proprietorship but with an added layer of protection against personal liability suits. It doesn’t allow you to participate in the management of the company, but it does allow you to act as an agent for running it if necessary.
You must consider there will be more paperwork than forming a corporation or LLC because your LLC must have one or more managers responsible for the daily running of the company.
The managers are like spokes of your business, and they should be individuals who have experience running a business before, or they must be people who are willing to learn quickly. Sole proprietorships commonly use this type of structure.
II. A corporation is the most common form of business structure for companies that want to grow. You can have a maximum of 50 or more shareholders. Corporations are managed by a board of directors who are elected almost every year at shareholder meetings.
A corporation is also an entity that does not have personal liability and cannot be sued. It’s normally used by large businesses that want more protection than an LLC allows while not losing some personal control over their company.
III. If you form an S-corporation, your shareholders are not protected from personal liability, and the company is treated as a partnership for tax purposes.
The advantage is that you can treat your corporation as a partnership and file taxes on it as such in order to take advantage of pass-through taxation. A disadvantage to this is that it will be harder to raise outside capital because the IRS does not recognize S-corporations as separate entities.
Step 2: Pick a Business Name
Before incorporating in Nevada, you need to decide on a business name to use. It must be available because the Secretary of State will check for it.
- Your business name must be striking and memorable and not so long that it takes up too much room on any forms you might have to send out.
- It can also not contain certain letters such as “Q,” “K,” “W,” or “X.”
Step 3: Register the Business
In order to register your business in Nevada, you need an official Nevada registered agent. This is a person who completes the paperwork on behalf of your company and submits it to the secretary of state. The best way to find a registered agent is by searching online. You can find a list of registered agents in Nevada, but it can be difficult to find the right one.
You will have to contact them directly to see if they are good matches for your company and whether or not they would be willing to act as your company’s registered agent.
If you are looking for a registered agent that isn’t on the list, you can ask your local Secretary of State office, municipal corporation, county clerk office, or other official government body if they know of any local representatives who could assist you.
How to file a DBA in Nevada
If you are looking for how to file a dba in Nevada, it is a very simple process. The first thing to do is register your DBA with the county clerk’s office. You will need proof of identity, such as a passport or driver’s license, and proof of business address. You can file for your DBA online for $15.
If you are only using it in your home county, there is no reason to register with the Secretary of State or the Nevada Tax Commission. Any business in Nevada is required to file with the local county clerk’s office. Those who are in violation of this may be assessed a $300 to $500 fine for every month they don’t have a registered DBA.
Step 4: Obtain Your Federal Employer Identification Number
Every business, whether incorporated or not that generates $500 or more in revenue must have a federal employer identification number (EIN). It is how the federal government tracks companies. If you are an LLC, it is also required for you to have an EIN so that any taxes you pay can be identified and reported to the IRS.
An EIN can be obtained through the IRS website by filing Form SS-4 and paying a $5 fee. The application usually takes only a few days to process.
Step 5: Open Company Bank and Credit Accounts
You can’t do business in Nevada without a financial institution willing to open an account for you.
Most banks require an EIN and proof of identity to open a company bank account, but many other types of institutions will accept only an EIN. Visa, MasterCard, and Discover all require that your company have a legal name before they issue you a card.
Step 6: Set-up An Accounting System
If you are going to use QuickBooks for your accounting system, it is a good idea to talk with an accountant before leaving the comfort of your home office.
QuickBooks is not specifically made for small businesses. It can be scaled up to handle larger companies easily, but if you don’t know where to begin with the software, then this could be dangerous.
This program was created by Intuit (the makers of the popular Quicken software) and ran on Windows-based PCs with Windows operating systems. It is also run on the QuickBooks servers, which includes real-time data backup.
If you already have an accounting system or if you want to use a different one, this isn’t as big of a deal.
Step 7: Obtain Licenses and Permits
Even if you want to operate your business anonymously, you need some type of license or permit. This is per state and municipality and is often required before your business can open for business. For example:
- Nevada requires all businesses to have a license. The Office of the County Clerk and Recorder of Clark County issues them. The license fee starts at $25 up to $150 for a non-professional business per year (see below for the $25 fee). All business licenses are renewed annually at the time of renewal.
Nevada cities and counties require businesses to obtain a business license. The city or county issues them.
In addition to the license, there is also a fee that can be paid to the city or county to issue the business license. This fee can usually range from under $10 up to over $100.
Nevada Business License Exemptions
In Nevada, there are three business licenses that don’t require a fee. They are:
- A Bank Service Franchise Tax
- Business of the Printing Industries
- Gaming/Amusement License
Step 8: Hire Employees (if applicable)
Nevada has some types of businesses that are registered as employing fewer than six people (e.g., small business, non-professional, etc.). In some cases, it is required to have an EIN before you can hire workers. In addition, you can also need a Federal Employment Eligibility Verification form (E-Verify) on file in order to determine if a potential employee is authorized to work in the United States.
Step 9: Obtain Business Insurance
Nevada requires businesses of any size to carry insurance (of some type) in order to operate. The minimum amount of coverage required varies by type of business and by region. In general, the state requires the following:
- Property insurance
- Commercial General Liability Insurance (e.g., for property damage or bodily injury)
- Worker’s Compensation insurance
You must file an annual report with the Nevada Division of Insurance indicating you have the appropriate insurance coverage.
The fee is $10 and must be filed every calendar year, between January 1 and March 1. You can file online or by mail if you have a hard copy of your policy certificates.
Step 10: Systemize and Organize
This is the most crucial step in starting a business. If you do not have an organized system and start making mistakes, it will only get harder to track the progress of your business and your expenses. Trying to keep track of receipts and bank deposits will become nightmarish.
The main thing to remember is that everything needs to be accounted for. That includes business income, expenses, credits, and debits. There are several ways you can organize your business and account for these items:
- You can use a special software program designed specifically to help small business owners.
- You can use the Microsoft Excel spreadsheet program.
- You can write it out by hand in a simple notebook or journal that you carry with you at all times.
- You can do it by hand in a simple ledger.
Step 11: Branding and Marketing
How you brand and market your business is completely up to how you want your business to be perceived. You can do a full branding campaign that includes website design, logo creation, and advertising.
Or, you can just pick out a cool domain name (e.g., LasVegasCleaningService.com) and start blogging about your business in order to promote yourself.
Step 12: Annual and Ongoing Requirements
Nevada requires a variety of ongoing annual and yearly requirements:
- Employers are required to keep records for five years. They must provide copies of these records to the state within 14 days of a request by either the employer or an employee.
- Employers are required to report wages over $300 or more per month (e.g., you pay someone $400 per month). They must also provide copies of these records within 14 days of request by either the employer or an employee.
- Employers are required to report paid workers of $600 or more per month. They must also provide copies of these records within 14 days of request by either the employer or an employee.
- Employers are required to report employment taxes and withholdings. They must also provide copies of these records within 14 days of request by either the employer or an employee.
- All business owners are required to report their business entity type and federal employer identification number (EIN) on the Nevada business license each year. This must be done between January 1 and March 1.
- All business owners are required to report their business entity type and federal employer identification number (EIN) on the Nevada sales tax license each year. This must be done between January 1 and June 30.
With all of these requirements, it’s best to get started as early as possible, so you don’t get behind.
Advantages and Disadvantages of Forming a Nevada LLC
Forming an LLC in Nevada has a number of advantages and disadvantages:
- Pass-through taxation
- Profits and losses are easy to determine
- Limited liability protection for owner’s personal assets (owners are not responsible for business debts or obligations)
- Tax-deductible expenses as a business owner (e.g., vehicle, travel, entertainment)
- Nevada has no income tax and does not impose a franchise tax on LLCs
- Nevada has no inheritance taxes
- Nevada has a small business exemption of $49,000
- Nevada has no general corporate income tax and does not impose a franchise tax on LLCs
- Pass-through taxation
- Taxes are too high
- Disallowance of future losses and income
- No employee benefits
- No Social Security (FICA) tax withheld from employees Federal Income Tax Forms F.S. 100
- No unemployment insurance contributions or federal unemployment tax
Cost of Incorporating in Nevada: Everything You Need to Know
It’s important to realize that the cost of Nevada incorporation is a lot higher than the cost of incorporation in most states. This is mostly due to the additional fees that Nevada requires corporations to pay.
Most states charge a nominal amount for filing fees, but Nevada requires fees equal to 1% of the total paid-in capital and profits for each year of existence (deposits or loans) if you are a foreign corporation or 0.2% if you are a domestic corporation (depending on where your principal office is located). This is the minimum.
There are a variety of other filing fees that you may be required to pay, depending on your business activity. These additional filing fees can quickly add up to thousands of dollars in Nevada–especially if you run a large corporation with assets and profits! You are required to pay this amount regardless of whether you do any business in Nevada.
Other Costs When Incorporating in Nevada
When incorporating in Nevada, there are several other costs to consider:
- The state of Nevada Application fee is $350 plus tax ($800). This only needs to be paid once.
- Federal Employer I.D. Number (EIN) must be obtained for $120 (includes $10 application fee). This only needs to be paid once.
- Annual report fees are $100 for an Active corporation and $50 for a Corp./LLC with no employees and no assets other than inventory and/or equipment that is not used in the business of the corporation/LLC.
- Annual report fees are $100 for an Active corporation and $50 for a Corp./LLC with no employees and no assets other than inventory and/or equipment used in the corporation/LLC business.
- The state business license fee is $250 for an Active corporation (This is a one-time state fee).
- Business license renewal fees are $125 every two years.
- Business activity taxes
- County/City License & Business Tax – This varies by location.
- Counties/Cities can require Business License ($25).
- Counties/Cities can require business tax ($1.50 per $100 of items purchased, up to 15% of sales).
- Annual state sales tax report ($50). The smaller the business, the less this costs.
- Annual Nevada Sales Tax (7%) report. The smaller the business, the less this costs.
To register your Nevada LLC with the Secretary of State, you will need to file the “Application for Charter” form (DEB 1133) as well as a “Certificate of Formation,” “Liability & Tax Certificate,” and a filing fee of $500.
The Certificate of Formation and Liability & Tax Certificate must be submitted within 60 days after formation. The filing fee will be refunded if your documents are returned undamaged with all taxes, and other charges paid.
Timeline for Processing
Once your LLC is formed, it will take 15 business days to process your business registration. LLCs cannot be issued a certificate of good standing until the end of this time period, and they are considered inactive.
Nevada does not allow foreign corporations to operate in the state without first becoming a domestic corporation.
The exception is for foreign corporations authorized to do business in Nevada under NRS Chapter 80 (examples include banks, insurance companies, etc.). In order to become a domestic corporation, foreign corporations must submit the documents.
List of documents for foreign corporations:
- Corporate name & address
- Certificate of Incorporation from the parent state
- Minutes of directors meeting with corporate seal
- Consent to service of process by Secretary of State
- Certification letter from the Nevada Tax Commission that all taxes have been paid (if applicable)
- Certificate of Reinstatement (if a corporation has been inactive in Nevada)
- Asking Corporation Information Act (ACIA) filing fee ($50/year.
- Approval of US Department of State.
Articles of Incorporation
Once your corporation has been formed, it will need to be registered with the Secretary of State. The following documents are required:
- Articles of Incorporation
- Certified Copy of Articles of Incorporation, a certified copy is not required.
- A Certificate signed by an officer confirming the accuracy of the articles.
- Certificate signed by Secretary of State acknowledging that they have reviewed the certificates and all information supplied for filing.
- Filing fee ($400).
What should I know about Nevada corporate taxes?
Nevada does not impose an annual state corporate income tax. This can be beneficial for corporations involved in a number of industries, including gaming and aerospace. However, there are a number of things to keep in mind:
- There is no corporate income tax on the privilege of doing business.
- A corporation is required to obtain a Nevada license before doing business. The fees associated with this license vary depending on your corporation’s industry and whether it is new or existing.
- For domestic corporations, there is an annual $250 state business license fee.
- Corporations are not allowed to accumulate earnings and profits. All earnings must be distributed to shareholders and taxed as such.
- The following forms are required annually: Nevada corporate income tax return for a corporation on the accrual basis of accounting, Nevada consolidated return for affiliated corporations, Nevada statement of shareholders’ equity since last annual report, and a Corporation Information Act filing fee (typically $50 per year).
- Corporations are required to file an annual Nevada income tax return if they have $50,000 or over in taxable gross income for the previous calendar year or have $500,000 or more in total gross receipts for the previous tax year. (Some exceptions exist.)
- Corporations are obligated to pay a Nevada state corporate franchise tax. This tax is levied at 1.5% of the value of all assets at each certain point during the years of existence (between 0 and 8 years).
Why Hire Nevada Registered Agent LLC?
Nevada LLCs should always have an officer or manager as a registered agent. These individuals often hold the maximum number of shares in the entity and are responsible for maintaining corporate records of all company transactions that have to be filed. They also receive all necessary documentation from clients and maintain them in a secure location.
- The Nevada Registered Agent LLC services are perfect for companies that do not have a direct connection with Nevada but need to operate under state law to complete their business. Registered agents are often found in large corporations that are required to have a Nevada registered agent in order to operate within the state.
- The primary purpose of a Nevada registered agent is to maintain the information that is required by the state on a registered agent company’s behalf. This includes information about the address, name, contact information, and date of formation for any Nevada company.
- They are responsible for forwarding documents and notices to the owner or person in charge of maintaining the corporation if the corporation has been dissolved or has changed its name.
- These companies are not limited to one type of registered agent service. They can be used for incorporation, LLC creation, foreign registration, and even DBA filings. With many experienced professionals under one roof, Nevada Registered Agent LLC can handle any and all responsibilities your business may need in a timely manner.
The Location of Your Business in NV
Where you choose to establish your business will have an impact on the amount of time and money that will need to go into your registration process, as well as the cost of doing business in general. There are a number of different things you should consider when making this decision.
Nevada is a common location for corporate headquarters for many companies because it is situated outside of the high-tax areas of both coasts. However, other states may provide benefits specific to your industry, so it is important to do some research before finalizing your choice.
Nevada is home to over 30 major industries, making it a diverse location for businesses of all types.
Best places to locate your business in Nevada:
- Las Vegas is a prominent hub for business in the entire country, as it houses many different businesses within the tourism and gaming industry, as well as a number of manufacturing companies. Job growth in the state has grown nearly 50% since 2000 and is estimated to continue to be strong over the next few years.
- Outside of Las Vegas, Reno is another popular location for businesses. The city boasts protected bike lanes and a rail system that have revitalized the area. The economic outlook for the city is encouraging, as it has a low unemployment rate, as well as high growth in wages.
These are just two of Nevada’s many options for business locations. If you are looking to take advantage of government incentives or cost-saving programs, your best bet is to contact your local government to learn more about what may be available.
Companies are faced with many decisions when they startup. Nevada, in particular, has a lot of factors to consider. However, once the process is complete and you have your business registered, you will feel empowered by the knowledge that you have established a solid foundation for your company to grow.
Experienced Nevada Registered Agents and business consultants will help you through every step of the process, from choosing your corporation name to creating corporate documents that protect your business and give you peace of mind.