Advantages of Forming an LLC in Nevada

by David Carnes
Some Nevada casinos are organized as LLCs.

Some Nevada casinos are organized as LLCs.

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A limited liability company (LLC) is a form of business organization that offers limited liability and no double taxation of company distributions. An LLC is governed by the law of the state in which it was formed, and every state has its own set of LLC laws. Nevada LLC law offers certain unique advantages to LLC members.

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Taxes

LLCs themselves are not taxed by most states. LLC members, however, are taxed on their proportionate share of LLC income, even if it is not distributed to them, at individual income tax rates. Furthermore, LLCs often elect to be taxed as corporations, subjecting them to corporate tax rates at the federal and sometimes the state level. Nevada, however, levies no state income tax on either individuals or corporations, according to the Nevada Secretary of State website. Furthermore, employer payroll tax is only 0.7 percent of gross wages. There are no inventory or franchise income taxes.

Single-Member LLCs

Nevada, like all other states, allows a single individual to form an LLC. Since LLC income is attributed to its members, taxation for a one-person Nevada LLC is simplified: Simply include LLC income and deductions on your federal individual income tax return.

Noneconomic Members

Nevada LLC law provides for "noneconomic members", according to Nevada Corporations Online. This allows for the inclusion of LLC members who do not own any part of the LLC, yet possess voting and managerial rights. An LLC may create a noneconomic membership by so providing in its articles of organization or its operating agreement. This type of flexibility is useful for LLC investors who wish to leave the actual operation of the LLC to the expertise of others.

Expedited Approval

Nevada offers three levels of expedited approval of LLC applications. As of 2010, regular service is subject to a $75 fee. For an additional $125, approval is granted within 24 hours. For an additional $500 beyond the basic $75 fee, approval is granted within two hours. For an additional $1,000, approval is granted within one hour.

Series LLCs

Nevada, like other states, erects a limited liability shield around LLCs, so that members themselves cannot be sued by LLC creditors -- only the LLC itself can be sued, and thus the personal assets of member are not placed at risk. Nevada takes this concept a step further, however. It allows the formation of a "Series LLC." The Series LLC allows for the erection of limited liability shields within the LLC. For example, a real estate LLC might hold several properties and set up a series LLC in a manner that prevents one property from being foreclosed upon to satisfy the debts of another property.