Nevada LLC Benefits: The Complete Guide for Sole Proprietors

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Are you a sole proprietor evaluating which state is best to form your single-member LLC? Read to learn the benefits of a Nevada LLC.

Nevada LLC Benefits, The Complete Guide

Are you self-employed or an independent contractor with a growing business and interested in researching how to create a single-member Nevada LLC? And what are the Nevada LLC benefits?

With that said, through your research have you come across a lot of mentions of Nevada being the best state to form an LLC?

If you answered, yes, you’ve come to the right place.

At Falcon Expenses (the company that publishes this blog) we’re familiar with the challenges of evaluating the most appropriate state to form a single-member LLC. Especially, evaluating which single-member LLC supports the needs of a one-owner business. This is because recently we went through the same process you’re going through right now.

In this article, we go over the benefits of forming a single-member LLC in Nevada. In addition, in this article, we provide you with all the resources you need to form a single-member LLC in Nevada. 

So keep reading.

What is an LLC?

An LLC, short for Limited Liability Company, is the most straightforward type of legal business entity available in the United States. It is often considered the ideal structure for most small businesses. This includes sole proprietorships that are expanding and require a more comprehensive business structure to support their growth.

What is a single-member LLC?

A single-member LLC is a Limited Liability Company that only has one owner. Owners of LLCs are known as members.

Why is Nevada the Good State to Form an LLC?

Nevada is a popular state for forming Limited Liability Companies (LLCs) due to several advantages. These include strong asset protection laws, increased privacy protection, and tax advantages. Continue reading to read more detail about the benefits of forming an LLC in Nevada.

Nevada LLC Benefits

Business-friendly legal system

Nevada has a reputation for having a business-friendly legal system with well-established laws that are favorable to business owners. The state has a specialized court system called the “Business Court” that handles business-related legal matters efficiently and effectively. This can be a significant advantage if you anticipate any legal disputes related to your LLC.

Asset protection laws and limited liability

An LLC is considered a separate legal entity from its owners. Of course, if it’s formed properly. Nevada offers members and owners of LLCs formed in its state a high level of liability protection.

This means a properly formed LLC has its own tax ID number.

One of the primary benefits of forming an LLC in Nevada is the strong asset protection it provides. Nevada law offers robust protection against creditors, ensuring that your personal assets remain safe in case of any legal disputes or financial liabilities related to your business.n addition, a properly formed LLC has its own tax ID number.

Tax Advantages

Nevada is a state with no individual or corporate income tax, no franchise tax, and no estate tax. This means that as a sole proprietor, you can enjoy the benefits of operating your LLC in Nevada without the burden of state-level taxes on your business profits. This can result in significant tax savings and help you keep more of your hard-earned money.

Low startup costs

The costs to form an LLC, including a single-member LLC, in the state of Nevada is one of the cheapest compared to other states. The initial formation filing fee to start a Nevada LLC is $90. Also, if you’re in a hurry to form your single-member Nevada LLC, for an additional $100 you can get same-day service. This expedited service is not available in other states that have appealing benefits for LLCs, such as Wyoming.

Perpetual life & business continuity

An LLC is a separate legal entity. Therefore, your single-member Nevada LLC will continue to exist if and until it’s dissolved. A sole proprietorship typically ends when it’s owner passes away. Therefore, with a Nevada LLC you can build a brand that will last well into the future and can be passed down to future generations.

Build credit & raise capital

A single-member Nevada LLC is an independent legal entity with its own tax ID number, which enables it to establish its own credit. This means that your Nevada LLC can open its own bank account, obtain small business loans, or sell equity to raise capital, all of which contribute to building its credit.

Owner privacy

Nevada is known for its strict privacy laws. When you form an LLC in Nevada, you can rest assured that your personal information, including your name and address, will be kept confidential and not listed in any public records. This added layer of privacy can help protect you from unwanted solicitations and maintain your anonymity as a business owner.

Ownership transferability

The ownership of an LLC is transferrable to another person. This is because an LLC is a separate entity from its owner. However, the ownership of a sole proprietorship cannot be transferred because the owner and the sole proprietorship are one and the same.

Unlimited number of owners

The purpose of this article is to assist sole proprietors, who are small businesses owned by a single individual, in forming a single-member LLC in Nevada. However, it’s worth noting that one of the advantages of a Nevada LLC is its flexibility in accommodating an unlimited number of business owners. This makes Nevada LLC an ideal business structure for supporting business growth, whether it involves expansion, taking on equity investors, or adding partners or owners.

No citizenship requirements

US citizenship or residency is not a requirement for forming a Nevada LLC. This means that if you are an American living abroad, such as a globetrotting freelancer, you should have no issues forming a Nevada LLC. Additionally, if you do not hold American citizenship at all and came across this article wondering if you can form a Nevada LLC without US citizenship, the answer is yes.

Business Operations

Nevada offers flexibility in how you structure and operate your LLC. For instance, Nevada law allows for the same person to hold all the positions in an LLC, including the roles of the owner, manager, and officer. This gives you greater control over your business operations and allows for a simplified management structure.

Business Flexibility

Nevada offers a flexible and business-friendly regulatory environment for LLCs. The state has minimal reporting requirements and allows for a wide range of business activities to be conducted under an LLC. Nevada also has no requirement for annual meetings of members or managers, and it allows for single-member LLCs. This flexibility makes it easier for businesses to operate and adapt to changing circumstances.

Business Credibility

Forming an LLC in Nevada can enhance the credibility of your business. Nevada is often seen as a business-friendly state with a favorable legal and regulatory environment for entrepreneurs and businesses. Having a Nevada LLC may convey a sense of credibility, professionalism, and stability to customers, partners, and investors, which can be beneficial for your business’s reputation and growth prospects.

Nevada LLC Cost

  1. Nevada LLC Formation Cost
    The Nevada Secretary of State charges a filing fee to form an LLC, which typically ranges from $75 to $150, depending on the type of LLC and how you file (online or by mail).
  2. Registered Agent Fee
    Nevada law requires LLCs to have a registered agent with a physical address in Nevada. Registered agent services are typically offered by third-party companies and can range from $50 to $300 per year.
  3. Annual Report Filing Fee
    Nevada LLCs are required to file an Annual List (also known as an Annual Report) with the Nevada Secretary of State by the last day of the month in which the LLC was formed, and then annually thereafter. The filing fee for the Annual List in Nevada is typically around $150.
  4. State Business License Fee
    Nevada LLCs are required to obtain and maintain a State Business License, which is an annual fee that varies depending on the type of business and other factors. The fee can range from $200 to $500 per year.
  5. Franchise Tax
    Nevada imposes a franchise tax on certain types of businesses, including LLCs. The franchise tax is calculated based on the LLC’s gross revenue and is due annually. The specific amount of the franchise tax depends on the LLC’s revenue and can range from a few hundred to several thousand dollars per year.

It’s important to note that these costs are approximate and may change over time. It’s recommended to check the most up-to-date fees and requirements with the Nevada Secretary of State and consult with a qualified professional for specific legal and financial advice related to forming and maintaining a single-member LLC in Nevada.

How are single-member LLCs taxed in Nevada?

For state tax purposes, Nevada does not have a state-level income tax, so single-member LLCs in Nevada are not subject to state income tax at the entity level.

Instead, the income generated by the single-member LLC is typically subject to self-employment tax, which includes both the employer and employee portions of Social Security and Medicare taxes. The self-employment tax is calculated based on the net income of the single-member LLC and is reported on the owner’s individual tax return. 

For federal tax purposes, a single-member Nevada LLC (Limited Liability Company) is generally treated as a “disregarded entity” for federal tax purposes. This means that the IRS does not recognize the single-member LLC as a separate entity for tax purposes, and the income and expenses of the LLC are reported on the owner’s individual tax return, usually on Schedule C of Form 1040.

It’s important to note that tax laws and regulations are subject to change, and it’s recommended to consult with a qualified tax professional or accountant for specific tax advice related to your single-member LLC in Nevada or any other jurisdiction.

Nevada Single-Member LLC

How to Start a Nevada LLC

Starting a Nevada LLC is easy. Follow these simple steps to start your single-member Nevada LLC.

Step 1: Pick a name for your LLC

Step 2: Choose a Nevada registered agent

Step 3: Get a Nevada Business License

Step 4: File a Certificate of Formation

Step 5: Get an EIN

Step 6: Create an Operating Agreement

How to Start a Nevada LLC, Each Step Explained

Step 1: Pick a name for your LLC

As a sole proprietor, unless your state offers a DBA, you’ve been limited to the brand name of your surname. You get to choose a unique name for your single-member Nevada LLC. This name can be anything, not just your name. For example, if you’re a graphic designer you could call yourself something like Elephant Designs. 

However, you need to first make sure your business brand name is available in the state of Nevada. Otherwise, you might have to register a DBA for your LLC if your top-choice name is already taken. 

Step 2: Choose a Nevada registered agent

When you form an LLC in any state that is different from your home state, even if you’re living abroad, you need a place to receive mail in the state where your LLC was formed. Therefore, if form a single-member LLC in Nevada you need a registered agent in Nevada.

What is a registered agent?

A registered agent accepts tax and legal documents for your Nevada LLC. A Registered agent is either an individual or a business entity. A registered agent is also known as a resident agent or a statutory agent. 

A registered agent in Nevada costs as low as $50 a year.

Some registered agent service providers may offer basic services, such as receiving and forwarding legal documents and notifications from the state, while others may offer additional services, such as online document storage, compliance reminders, and access to other business support resources. The cost of the registered agent service may depend on the level of services provided.

Step 3: Get a Nevada Business License

Step 4: File a Certificate of Formation

A certificate of formation is also known as an Articles of Organization.

Step 5: Get an EIN

Some sole proprietors already have an EIN. You need a new EIN for your single-member Nevada LLC. An EIN is a federal tax ID number like a Social Security Number.

What is an EIN?

An EIN is a 9-digit number issued by the IRS and used by the IRS for tax reporting. It looks very similar to a Social Security Number. However, an EIN is used by a business instead to be identified by the government to file their taxes.

Step 6: Create an Operating Agreement

LLC’s are formed under state laws, which means the requirements to have an operating agreement vary from state to state. Some states require a written operating agreement. The state of Nevada requires an operating agreement.

What is an Operating Agreement?

An Operating Agreement describes the operations of an LLC and describes the agreements between an LLC’s owner. The purpose of an Operating Agreement is to govern your LLC’s internal operations specific to the needs of the owner(s).

Articles of Organization vs Operating Agreement

Are you in the process of evaluating an LLC and feeling confused about certain terms and concepts, such as Operating Agreements versus Articles of Organization?

If you answered yes, then keep reading.

Articles of Organization and Operating Agreement are two legal documents associated with Limited Liability Companies (LLCs), but they serve different purposes. It’s common for people to get them confused or not fully understand them.

Articles of Organization is a legal document filed at the state level that informs the state about your plan to establish and operate an LLC. It is required in every state when forming an LLC.

On the other hand, an Operating Agreement is not required in all states. It is a document that outlines how your LLC will operate and function, similar to corporate by-laws used for more complex business entities such as C Corporations. It provides guidelines and rules for the internal workings of the LLC.

In summary, while Articles of Organization is a mandatory document in all states for forming an LLC, an Operating Agreement is not always required but serves as an important internal document that outlines the LLC’s operating procedures and rules.

Do I need a new EIN to convert to an LLC from a sole proprietorship?

Yes! You need a new EIN number if you already have one for your sole proprietorship. In most cases, you can’t use the EIN you used for your sole proprietorship.

Do I need to open a new business bank account if I convert to an LLC from a sole proprietorship?

No. If you already have a business bank account most likely they will let you update your business account to reflect your entity change.


Nevada is one of the top choices for sole proprietors that are switching entities to a single-member LLC, or even a multi-member LLC.

The benefits and conveniences of a Nevada LLC are unmatched for sole proprietors and other small business owners looking to convert their entities to an LLC. We highly recommend Nevada as your state of choice for starting your LLC. 

Falcon Expenses Blog is a community of freelancers, self-employed sole proprietors, and small business owners. Our community would love to hear your story. 

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Was the process challenging or straightforward?

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