Sutton Law Center

Advantages of Nevada LLC Formation

nevada llc formation

Nevada LLC formation offers many advantages, especially in comparison to other types of business formations in other states. Our lawyers at the Sutton Law Center, a Professional Corporation can explain to you how and why.

Liability Protection

Nevada LLCs can offer superior liability protection to LLCs formed in other states. First, since LLC members do not have to be identified on any public record if they are not also managers of the LLC, it is possible for the LLC to have nominee managers and thereby closely protect the identity of LLC owners. This provides a significant aid to liability protection. Further, Nevada, unlike other states, offers the series LLC, whereby the assets from one business enterprise within the LLC may be protected from the liabilities of another business entity within the LLC. This is unlike the LLCs of other states wherein all of the assets of the LLC are subject to any of its liabilities. Finally, Nevada offers significant indemnification of the managers or members, as well as a clear separation between the company and its members and managers. All of these result in potential protection from individual liability.

Charging Order

While the LLC protects members personally from LLC liabilities, Nevada law also protects LLC assets from personal liabilities. Forming an LLC in Nevada enables members to take advantage of the fact that the charging order is the sole remedy for creditors to attack LLC assets to satisfy personal debts. This means that creditors can only get to a member’s share of any income of the LLC. The creditor cannot force a distribution from the LLC, which is only required to make distributions per the operating agreement.

Taxes

Nevada LLC formation can avoid the double taxation commonly experienced with corporations. LLCs can choose to be taxed as a partnership, which means that the income of the LLC flows through to the partners who pay their individual income taxes based on the gain or loss of the LLC. Since Nevada does not have a corporate or individual income tax, this can result in a significant tax advantage. Furthermore, since Nevada does not collect income information relative to an income tax, it does not engage in information sharing with the IRS regarding the income of the LLC. Therefore, not only are there potential tax advantages, but there is also value in the privacy a Nevada LLC provides.

For more information or for help with Nevada LLC formation, call the Sutton Law Center, a Professional Corporation, at 775-824-0300 or toll free at 800-700-1430.

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