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Key takeaways
- Learn to submit articles of incorporation to the Nevada Secretary of State along with a filing fee if you want to create a corporation there.
- Through this article, you will know that a company's name must be distinct and contain one of the terms "Incorporated," "Corporation," "Limited," or an acronym of one of these phrases.
- Know how to appoint a registered agent with the authority to receive legal papers on the Corporation's behalf.
- Learn that Nevada corporations are exempt from the IRS's EIN requirement unless they choose to be taxed as corporations or have employees.
- Understand additional state laws that may be necessary.
- Read about how to get local licenses and permits, such as zoning and business licenses, which vary depending on the city or county.
- Understand all applicable licensing and permitting regulations to avoid unfavorable legal or financial consequences.
Choosing the appropriate legal structure is one of the most crucial decisions when starting a business. A corporation is often the ideal option for business owners since it has several benefits over other organizations. In this article, one of the most popular states for incorporation, Nevada, we'll look more closely at the corporation-formation process.
Benefits of forming a corporation in Nevada
Nevada is a well-liked location for business incorporation for several reasons, including:
No state corporate income tax: Businesses may save a lot of money since Nevada does not have a state corporate income tax. Strong asset protection laws are available in Nevada, which can assist in safeguarding business owners' assets from litigation and other obligations.
Privacy: Nevada permits anonymous corporate ownership, which is advantageous for people who want to keep their business dealings confidential.
Business-friendly environment: Nevada is known for being a state that is favorable to business, with a quick incorporation procedure and a legal structure that is supportive of it.
Types of Corporations in Nevada
In Nevada, a variety of corporations can be incorporated, including:
- The C business is the most popular kind of business, which provides stockholders minimal liability protection and allows them to raise money by selling shares.
- S Corporation: A unique kind that permits pass-through taxes, in which income and losses are disclosed on the shareholders' tax returns.
- Close Corporation: A business structure with limitations on the transferability of stock and a limited liability
- Non-profit: A corporation established for philanthropic, educational, or other non-profit objectives is a non-profit corporation.
Overview of the incorporation process
Nevada's incorporation procedure for businesses is not too complicated. The steps are as follows:
- Select a company name, then check the Nevada Secretary of State to see whether it is available.
- Post Articles of Incorporation, which detail the company's name, objectives, and first directors, with the Nevada Secretary of State.
- Obtain all required licenses and permits for your company.
- Organize a board of directors meeting for the Corporation at which officers will be chosen, and bylaws will be enacted.
- The IRS can provide you with an Employer Identification Number (EIN).
- Each year, submit a list to the Nevada Secretary of State that contains the most recent details on the company's officers and directors.
Preliminary Steps
Assessing your business needs
Consider your business needs and if a corporation is the best legal structure for your firm before founding a corporation in Nevada. The size of your company, your plans for development and expansion, your financial requirements, and your tax condition are a few things to consider.
Choosing the correct type of Corporation
The C company is the most popular kind of company, which provides stockholders with minimal liability protection and allows them to raise money by selling shares. Then you have S Corporation, a unique type that permits pass-through taxes, in which income and losses are disclosed on the shareholders' tax returns. Lastly, a corporation established for philanthropic, educational, or other non-profit objectives is known as a non-profit corporation. To choose the best kind of Corporation for your company, you need to speak with a legal or financial expert because each type of Corporation has advantages and drawbacks of its own.
Naming your corporation
You must take a few procedures when naming your organization in Nevada to ensure it complies with legal criteria and is accessible for usage.
Check the availability of names before choosing one for your firm in Nevada to be sure no other business is already using it. On the Nevada Secretary of State website, do a name availability search. It's crucial to have a unique name for your company that will set it apart from others in the state.
Nevada's regulations for names Nevada has several rules for company names, such as the inclusion of specific terms (such as "Corporation" or "Incorporated") and prohibitions on the use of particular phrases. (like "bank" or "insurance").
Choosing a name (if necessary): You can select a name for your Corporation by submitting a Name Reservation Request to the Nevada Secretary of State before submitting your Articles of Incorporation. With enough time to file your articles of organization and finish the incorporation procedure, you can reserve a name for up to 90 days using this method. You may ensure that your firm has a strong, distinctive character that will help it stand out from other businesses in the state by following these procedures and selecting a name that satisfies Nevada's standards and is available for use.
Preparing and Filing Incorporation Documents
Articles of Incorporation
A legal document known as the Articles of Incorporation must be submitted to create a corporation in Nevada. It includes crucial details about your organization, like its name, goals, and organizational structure. The following are the most important details to be aware of when submitting your articles of incorporation in Nevada:
Required information
Addresses and names of your founding directors, your registered agent, your Corporation's name and address, and other details must all be listed in your articles of incorporation. A declaration of your Corporation's objective, the amount and kind of authorized shares, and the names and addresses of the incorporators submitting the incorporation articles are also required.
Optional provisions
You may decide to add optional clauses to your articles of incorporation in addition to the mandatory information. For instance, you could wish to include clauses addressing your Corporation's management, the issuing of shares, or the transfer of shares. To establish whether optional clauses are suitable for your organization, getting advice from a legal or financial expert is a good idea.
Filing process and fees
Once you've completed your Articles of Incorporation, you must file them with the Nevada Secretary of State. The filing fee is $75; you can file online or by mail. You can use the Nevada Secretary of State's SilverFlume portal if you file online. If you prefer filing by mail, you'll need to print and fill out the Articles of Incorporation form and mail it, along with the filing fee, to the Nevada Secretary of State's office.
Registered Agent
An individual or company must have a physical address in Nevada and be accessible to receive legal and official papers during regular business hours to act as a registered agent there. Additionally, the registered agent must have your written permission before acting as your Corporation's agent.
When choosing a registered agent, there are various factors to take into account for your organization. You have two options for choosing a registered agent: you, a trusted employee, or a reputable registered agent service. It's crucial to pick a dependable, trustworthy, and competent person who can handle critical legal paperwork on your company's behalf. Selecting the ideal registered agent is vital while incorporating a Nevada business. You can ensure that your firm can acquire crucial legal and official papers in a timely and effective manner by choosing someone who complies with the state's criteria and is dependable and trustworthy.
Establishing Corporate Governance
Bylaws
A corporation's internal procedures are governed by its bylaws, which are crucial documents. They set forth the policies and procedures the Corporation will adhere to and offer direction to its directors, executives, and shareholders. Here are the critical essential facts you should be aware of:
Bylaws have various significant goals that they fulfill. They provide the rules for making decisions and acting within the Corporation, specify the duties and obligations of the officers and directors, and form the organization's legal framework. Bylaws are crucial for several other reasons, including assuring that the organization complies with all applicable state and federal laws and providing a structure for settling disagreements and disputes.
Initial Board of Directors
In creating a corporation, the original board of directors is crucial. The following are essential details of choosing and qualifying the initial board of directors, as well as their tasks and duties:
Selection and qualifications: The Corporation's incorporator(s) will generally choose the original board of directors at the time of incorporation. The size and type of the business and any particular criteria outlined in the organization's bylaws will determine the number of directors and their credentials. Generally speaking, directors need to be able to manage the firm's business and make wise judgments.
Jobs and duties: The original board of directors is charged with several important positions and responsibilities, including:
- Directing the Corporation's strategic direction and overseeing the administration of the company's activities
- Appointing officers and giving them suitable power
- Making sure that the company complies with all applicable rules and regulations
- Keeping thorough and accurate records of the company's actions
- Approving significant business dealings and financial choices, such as signing contracts or issuing stock
Stock Issuance
Issuing stock to shareholders is one of the crucial phases in establishing a firm. The following are the essential details on the different forms of stock, the issuing procedure, and restrictions:
Forms of stock
A corporation may issue one of two principal forms of stock:
- Common stock: The most fundamental kind of stock, common stock, denotes ownership in the company. Common investors have voting privileges and can earn dividends if the company elects.
- Preferred stock: This sort of stock typically has no voting privileges, but it could receive special treatment for dividends or liquidation preferences.
Process of issue and restrictions
State law and the Corporation's bylaws apply to issuing shares. Issuing new shares often requires board approval, and the business must submit the necessary documentation to the state. The ability to own shares in the Corporation may also be subject to limitations, such as residence or citizenship requirements. Additionally, the business might need to abide by securities rules and regulations while issuing shares. The stock issuing procedure may be conducted correctly and by relevant laws and regulations by working with legal and financial experts.
- Compliance with State and Federal Regulations
- Nevada State Business License
In Nevada, a state business license is necessary for every company. The following are the essential details regarding the application procedure, costs, and renewal requirements:
Application requirements and costs: You must complete an application and pay a fee to apply for a Nevada state business license. A different charge applies depending on the kind of business and the number of employees. You'll get your state business license when your application is reviewed and accepted.
Renewal requirements: State of Nevada business licenses typically have a one-year expiration date and must be renewed yearly. You must fill out a renewal application and pay a charge to get your license renewed.
Usually, the renewal charge is less than the one for the first application. To prevent penalties or fines, renewing your license on schedule is crucial.
Overall, getting a Nevada state business license and keeping it current are critical steps in operating a company there. You may avoid legal and financial problems and focus on expanding your business by adhering to licensing rules.
Employer Identification Number (EIN)
The IRS issues unique nine-digit Employer Identification Numbers (EINs) to identify firms for taxation. What you should know about getting an EIN and using it is as follows:
How to get an EIN from the IRS
There are three ways to apply for an EIN: online, via mail, or by fax. After submitting the online application, which is free of charge, you will instantly obtain your EIN. Your EIN may not be available for a few weeks if you submit your application via mail or fax.
Uses and significance
An EIN is a tax identification number necessary to create a business bank account, file tax returns, pay taxes and identify a company for tax reasons. Additionally, it is frequently needed when requesting company financing, permits, and licenses. Having an EIN can support your company's validity and trustworthiness.
Getting an EIN is a crucial first step for any business owner because it's required to comply with tax laws and regulations and carry out financial transactions.
Federal and state tax obligations
Corporations are subject to a flat 1.475% tax on their gross revenue in Nevada. Based on the Corporation's annual net income, this tax is owed every year. Nevada levies a 6.85% sales tax on most of the products and services bought and sold there. Make an application for a sales tax permit, collect and return sales tax to the state, and register if your Corporation sells taxable products or services. Payroll taxes, such as federal income tax, Social Security tax, and Medicare tax, must be withheld from employee wages and sent to the government. Taxes on unemployment insurance must also be paid to the state. Taxes on unemployment insurance must also be paid to the state.
To avoid penalties and fines, it's crucial to maintain compliance with federal and state tax requirements. Consider working with a tax professional or using software to make sure your business complies with all its tax obligations.
Ongoing Maintenance and Reporting
Annual List of Officers and Directors
You must submit an Annual List of Officers and Directors to the Secretary of State if you are a corporation in Nevada. What you need to know is as follows:
- Requirements for filing: The Annual List should include the names and addresses of the directors of the Corporation and the name and address of the Registered agent. It can be submitted by mail or online.
- Dates and costs: The Annual List must be filed by the final day of the Corporation's anniversary month, and the filing price is $150. Late filings might incur extra costs or penalties.
Annual financial reports
You might have to submit annual financial reports to the Secretary of State as a corporation in Nevada. Your Corporation's kind and size will determine the precise reporting obligations. Punishments for losing one's good standing with the state may follow from failing to submit these reports on time.
Periodic corporate meetings
According to Nevada law, businesses must have regular board of directors and shareholder meetings. The minutes of these sessions must be recorded and stored for future use. Regular meetings ensure that your business functions effectively and by the law. It's crucial to keep track of meeting agendas and record all talks and decisions made in them.
Conclusion
The benefits of establishing your firm in Nevada are numerous, including liability protection and tax advantages. To preserve compliance with local, state, and federal laws, it's crucial to take the right actions. This entails submitting the proper papers, paying taxes, and attending the requisite meetings. When necessary, obtaining expert guidance is advised to ensure you are adhering to all legal obligations. This can entail seeking advice from a lawyer, accountant, or business expert. You may avoid fines and maintain good status with the state by staying compliant. Choosing a company organization, completing papers, and adhering to continuing compliance requirements are crucial elements in the Nevada incorporation process. You may effectively incorporate your firm and take advantage of becoming a corporation in Nevada with the proper preparation and support.
We can help!
At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
We can help you start an LLC in Virginia. Learn more.
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Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for early-stage founders navigating their start-up journeys.
Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.
We can help!
At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
We can help you start an LLC in Virginia. Learn more.
Like our content?
Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for early-stage founders navigating their start-up journeys.
Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.
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