Your Guide to the Types of LLCs in Nevada

Whether you’re a new or seasoned entrepreneur, you can start an LLC in Nevada. These business entities are divided into several types with distinct characteristics and potential benefits for you and your venture. However, both can make choosing the best type of LLCs challenging.

If you need help with this major decision, read on to learn about the different types of LLCs in Nevada.

Key Takeaways

• The different types of LLCs in Nevada include single-member, multi-member, professional, and series LLCs.
• Single-member LLCs are owned by only one person. They’re taxed as sole proprietors or disregarded entities.
• Multi-member LLCs are owned by multiple individuals. These LLCs are treated as partnerships for income tax purposes and can be member or manager-managed.
• Nevada allows licensed professionals to form professional LLCs (PLLCs). PLLCs can protect these individuals from business debts and legal claims against other owners of the venture.
• Series LLCs consist of a “parent” LLC and multiple businesses that operate independently. Each series has separate and limited liability protection.

Single-Member LLCs

Many LLCs start with just one owner. While sole proprietors can face personal liability for business obligations, single-member LLCs can reduce it by protecting your assets from business debts and obligations.

Moreover, these types of LLCs are treated as “disregarded entities” for federal income tax purposes. The profits and losses of single-member LLCs are reported on their owner’s personal tax return. But if a single-member LLC wants to change its tax classification, it can file an election with the Internal Revenue Service (IRS).

Multi-Member LLCs

As their name suggests, multi-member LLCs are owned by two or more individuals. Their structure is more complicated than single-member LLCs yet offers great flexibility in management and protects owners from business liabilities.

Multi-member LLCs are taxed as partnerships by default. However, they can choose to elect S corporation or C corporation taxation. And when it comes to distributions, multi-member LLCs allocate their profits and losses to its owners. Member distributions are based on each individual’s stake in the business.

Management Structure

Multi-member LLCs can choose to be member-managed or manager-managed. In a member-managed LLC, all members own and run the business. Meanwhile, a manager-managed LLC in Nevada appoints managers to handle their daily operations. The company’s owners remain passive investors of the business.

For more about the differences between member-managed and manager-managed LLCs, read NCH’s expert guide to these types of LLCs.

Operating Agreements

If you’re starting a multi-member LLC, consider drafting a comprehensive operating agreement that outlines:

• Ownership percentages
• Profit distribution methods
• Management responsibilities
• Decision-making procedures
• Buy-sell procedures (if a member exits, dies, or becomes incapacitated)

All clauses in an operating agreement should be clearly written to prevent disputes and other operational issues.

Professional LLCs

Professional LLCs are made for licensed professionals. In certain jurisdictions, these individuals can’t start a traditional LLC, as they might use it to reduce personal liability for professional malpractice. Select states, including Nevada, allow professional LLC formation for this reason.

General Requirements for Professional LLC Formation

Typically, licensed professionals can only register Nevada PLLCs with the Secretary of State. Their licenses should be valid at the time of formation.

A PLLC can be formed for professional services such as:

• Architecture
• Chiropractic care
• Engineering
• Landscaping
• Law practice
• Mental health services
• Social work

A Note on Liability Protection for PLLCs

A PLLC will protect you from business debts and malpractice claims against other owners of the business. However, this type of LLC can’t reduce a member’s personal liability for their own misconduct. You’ll need professional liability insurance (also called errors and omissions insurance) to cover the potential costs of handling malpractice claims.

Series LLCs

Nevada series LLCs have multiple “series” or divisions managed by a parent or umbrella LLC. Each series owns assets, incurs separate liabilities, and operates independently. Series LLCs are particularly ideal for real estate investors, franchisors, and businesses with multiple divisions for various areas of their operations.

The Characteristics of Series LLCs

The entities under a Nevada series LLC use unique business names and maintain separate business bank accounts, accounting books, and records. They can have different members and managers, own property, and sign contracts.

Additionally, the assets of each series are protected from the legal liabilities of other series.

How to Form a Nevada LLC

The LLC formation process varies depending on the type of Nevada LLC you want to form. But in general, it involves the following steps.

1. Choose a unique business name and check its availability.
2. Appoint a registered agent with a physical address in Nevada.
3. File Articles of Organization with the Nevada Secretary of State.
4. Draft an operating agreement.
5. Apply for an Employer Identification Number (EIN).
6. Open a business bank account.
7. Get a state business license.
8. Obtain other licenses and permits from your county.

Filing Fees & Processing Times

The Nevada Secretary of State charges $75 for filing the Articles of Organization and $200 for the state business license. Both can be filed online for immediate processing. Also, you can pay $125 for 24-hour expedited processing of your Articles of Organization.

If you’re forming a professional LLC, the process can take some time to complete due to licensing authority reviews and approvals.

Related Resources

• Watch the video below for a quick, step-by-step guide to Nevada LLC formation.

• Learn how to form a professional LLC in Nevada here.

Compliance Requirements for Nevada LLCs

Unlike corporations, Nevada LLCs aren’t subject to statutory requirements such as formal meetings and board resolutions. These entities are also required to appoint and maintain a registered agent to receive important documents on their behalf.

More importantly, Nevada LLCs must submit an Annual List of Managers or Members and renew their state business licenses. Both are filed with the Nevada Secretary of State each year.

Frequently Asked Questions

What’s the difference between single-member & multi-member LLCs?

Single-member LLCs have one owner and are taxed as disregarded entities. Multi-member LLCs have multiple owners and are taxed as partnerships. However, the latter can be member-managed or manager-managed.

Member-managed LLCs are operated by the members themselves, while manager-managed LLCs are run with designated managers.

Can I change my LLC’s management structure after formation?

Yes, you can change your LLC’s management structure after formation. You only need to file a Certificate of Amendment with the Nevada Secretary of State. This document should specify your LLC’s new management structure.

Furthermore, you should revise the management structure stated in your LLC’s operating agreement.

When do I need a Nevada professional LLC?

You need a Nevada professional LLC if you offer a service that requires licensing. This type of LLC can be formed for professional services such as accounting, engineering, law practice, and medical care.

Why should I form a Nevada series LLC instead of opening multiple separate LLCs?

Forming a Nevada series LLC simplifies business registration and (potentially) helps you save on startup costs. You only need to register the parent LLC with the Nevada Secretary of State and pay a single filing fee for it.

Also, multiple LLCs are formed and managed separately. A Nevada series LLC can reduce this administrative burden.

How are Nevada LLCs taxed?

Nevada LLCs can be taxed as:

• Disregarded entities (for single-member LLCs)
• Partnerships (for multi-member LLCs)
• Corporations – An LLC can elect S corporation or C corporation tax status.

Can out-of-state residents form any type of Nevada LLC?

Yes, out-of-state residents can form any type of Nevada LLC. However, they must register their businesses as foreign LLCs and maintain a registered agent with a physical address in Nevada. NCH’s blog has more information about the state’s foreign LLC registration process.

How can Nevada LLCs stay in good standing with the state?

Nevada LLCs can stay in good standing with the state by adhering to annual compliance requirements. These entities are required to file an Annual List of Managers or Members with the Nevada Secretary of State and renew their state business license. Both are filed at the same time each year.

Can a Nevada LLC operate with a different structure?

A Nevada LLC can operate with a different structure. Let’s take multi-member LLCs as an example. These entities can have a member-managed or manager-managed structure.

If you form a series LLC, you can set up different LLCs with specific structures. One series can be a single-member LLC, and another can be a multi-member LLC.

Does my chosen type of LLC affect asset protection?

Yes, your chosen type of LLC affects asset protection.

Single-member and multi-member LLCs shield assets from business liabilities. Meanwhile, series LLCs add liability protection to each entity under it.

As for professional LLCs, they won’t protect your assets if you conduct malpractice or negligence.

Which type of Nevada LLC should I choose?

Your choice depends on your business goals, number of owners, and industry.

If you plan to open a business with multiple partners, consider forming a multi-member LLC. Otherwise, a single-member LLC is your best option. Professional LLCs work best for doctors, accountants, lawyers, and other licensed professionals.

Expert Tips From NCH

1. If you’re starting a multi-member LLC, choose its management structure carefully. Manager-managed LLCs require trusted and capable managers, while member-managed LLCs suit hands-on entrepreneurs.
2. Consider long-term business growth when choosing between types of LLCs in Nevada. A multi-member LLC allows you to add members and transfer ownership interests to new owners.
3. Draft a comprehensive operating agreement. Whether you’re running a single-member or series LLC, you must have an operating agreement that details how the business is run.
4. Evaluate your LLC’s current tax classification. You can change how your business is taxed by filing the appropriate election with the IRS.
5. Keep your venture compliant with Nevada’s current legal requirements. Maintain its registered agent, plus file your annual report and renew your state business license on time.

Choose the Best Type of LLC for Your Business

LLCs formed in Nevada can be single-member, multi-member, professional, or series LLCs. Each type of LLC has different characteristics and significant advantages, including limited liability protection. Both will determine the best type of LLC for your venture.

Are you planning to open a Nevada LLC? NCH’s business formation specialists can help you choose between the common types of LLCs and register your business with the state.

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DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.