One of the most commonly cited advantages of forming an LLC in Nevada is the lack of state income tax. If your LLC has a single owner, or if it has multiple-members who have chosen to be taxed as a partnership, the LLC’s income passes through to the members who pay individual income taxes. The LLC could, instead, choose to be taxed as a corporation. Since Nevada has no state income tax, there would be no liability to Nevada for state income taxes. Further, since Nevada collects no income information, it has nothing to share with the IRS, unlike many other states.
Nevada law allows for members of an LLC who have no ownership in the LLC to nevertheless have voting and managerial rights. This may be attractive to investors who want the LLC to be operated by others with expertise in the industry.
Forming an LLC in Nevada may provide for significant flexibility. For example, a C corporation requires earnings to be distributed to owners in proportion to ownership. This is not necessarily so with Nevada LLCs, where an operating agreement can allow for non-pro-rata distribution policies.
Privacy and Simplicity
Forming an LLC in Nevada can be expedited, does not require non-managing owners to be identified, does not require assets of the LLC to be identified, and does not require annual meetings to be conducted or meeting minutes maintained. Consequently, an LLC can be simple to establish and easy to maintain. Moreover, since non-managing members need not be identified, and since Nevada has no income information to share with the IRS, a Nevada LLC can offer significant privacy advantages.
Forming an LLC in Nevada can offer enhanced liability protection through a Series LLC. While other states limit the liability of LLC members, Nevada offers superior liability protection for those who have formed a series LLC, which erects a “firewall” not only around the LLC, but also within. For example, an LLC with several properties might establish a Series LLC which holds all of the properties, but protects each from the liabilities of the others. This is in contrast to other states’ LLCs which would subject all assets within the LLC to the liabilities of any other asset within the LLC.
A Lawyer’s Expertise
For more information or for help in forming an LLC in Nevada, call the Sutton Law Center at 775-824-0300 or toll free at 800-700-1430.