How to Form a Professional Corporation in Nevada


Steve Goldstein
Steve Goldstein
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Form a Professional Corporation in Nevada

Are you considering starting a professional corporation in Nevada? Congratulations! Establishing a professional corporation is an excellent choice for entrepreneurs and professionals alike who seek to benefit from a business structure that provides limited liability protection, tax advantages, and enhanced credibility. However, navigating the process of forming a professional corporation in Nevada can be daunting.

This article aims to provide a comprehensive guide on how to form a professional corporation in Nevada, covering everything from understanding the basics of this business entity to the essential steps and requirements you must comply with to launch your new venture successfully. Let’s dive in and explore the ins and outs of forming a professional corporation in Nevada!

What is a Professional Corporation in Nevada?

A professional service corporation (PSC), sometimes called a professional corporation (abbreviated as PC), is a type of organization authorized by state law to allow owners of particularly licensed professions in Nevada. The owner of a professional corporation is responsible for their own negligence or misconduct, but they are not held personally accountable for the actions of other owners. PC or P.C. is a regularly used abbreviation to identify professional corporations.

PCs and LLCs provide personal asset protection; that is, the personal assets are free from business debts. However, they do not have similar tax benefits. There is no secret formula as to which type of business structure is better than the other. It solely depends on the requirements of your business. However, forming an LLC is easier than setting up a PC in Nevada.

LLCBuddy Editorial Team

Unlike other types of corporations, owners of Professional Corporations get two types of citizenship. One is where they incorporated the corporation, and the other is where they conduct the business. This benefit is not available for other types of corporations. You can form a free LLC in Nevada if you hire a professional service that provides LLC formation at $0.

How to Form a Professional Corporation in Nevada

To form a Professional Corporation for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Nevada, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

  • Doctors
  • Architects
  • Engineers
  • Accountants
  • Lawyers and others

You should be qualified to have a license to provide your service. In most cases, once you have graduated with your studies, passed the exam, and got your license, you may now form a professional corporation. However, if you work in an industry that doesn’t offer a license or professional certification, you should consider forming a corporation or limited liability company.

Step 2: Name your Professional Corporation in Nevada

After you have decided on the idea to form a professional corporation in Nevada, deciding the name for your corporation is significant. There is a complete guide on Nevada LLC name guidelines for you to have a proper business name. Here are some regulations you must follow while naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • No confusion with a government entity name.
  • A unique name is needed with no match
  • Limit of restricted words that need a license.

In Nevada, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 90 days. To keep the name, you must file a name reservation application with Nevada Secretary of State.

A professional corporation, professional association, service corporation, or professional service corporation must be present in the name if it doesn’t already. You might opt to register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). In this manner, you can choose any name you desire to run a clinic or law firm.

Step 3: Choose the Nevada Registered Agent

The next step in forming a professional corporation is hiring the Nevada Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Nevada. Forming a professional corporation for your service will be easier if you have Registered Agent in Nevada.

Alternatively, you can serve as your own Nevada Registered Agent if you have the time. However, you must stay compliant to avoid missing any important documents from Nevada.

Step 4: File the Articles of Incorporation in Nevada

After you hire a Nevada Registered Agent to form a professional corporation, the next step is to file the Nevada Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information should be written. You should also include the names of all co-owners. All owners have to prove they have the proper license to practice the specific profession they intend to.

Filing the Articles of Incorporation in Nevada may be done with four methods that are online, fax, by mail and in-person. The Articles of Incorporation fee may vary from different states. However, in Nevada, it costs $75 for filing online, fax, in person and by mail. Create an account/Log in to the SOS site, get the online form, fill it, and submit online. For offline filing, Send the form by mail or drop it off in person at Secretary of State, Commercial Recordings Division, 202 N. Carson St., Carson City, NV 89701-4201, or fax it to (775) 684-5725..

Step 5: Write an Operating Agreement in Nevada

An operating agreement is a document that contains all of your company’s organizational details. It is not required to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The Nevada operating agreement includes information like-

  1. About Business
  2. Members and management
  3. Capital contribution
  4. Profit Distribution
  5. Change of membership
  6. Dissolution

Step 6: Designate the PC Board of Directors in Nevada

The next step is to appoint the initial board of directors in your PC in Nevada. All the initial directors must submit their details to the owner. The owner must keep the records and submit them in accordance with the Nevada SOS. When writing the By-laws, as a shareholder and owner, you must make sure there is a point mentioned about appointing a new director later.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made.

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 8: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 9: Request an EIN in Nevada

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Nevada can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your professional corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 10: Open a Bank Account and Prepare for Taxes

Once you have filed and received your Employer Identification Number, you should open a bank account since you will use this account for yourself, your clients, and your employees.

Your business dealings in Nevada might be simpler by having a US business bank account because it boosts your company’s legitimacy and liquidity. For firms other than sole proprietorships, most banks demand an EIN to create a business bank account. Also, keeping separate finances helps you avoid combining personal and professional finances. Also, having an EIN makes tax preparation easier. With a professional corporation, you can anticipate paying employment and corporate taxes.

Step 11: Get a Business License in Nevada

Before your professional corporation operates in Nevada, you need to have a business license first. A business license is a formal document issued by the state government agency that allows you to operate your business in the geographic region that that agency governs. In Nevada, business license and permit costs depend on the business’s nature and type. You must check with the local authorities if any special licenses or city-based permits are needed.

Step 12: File Your Taxes in Nevada

Finally, you are down to the last step. After getting a business license and being ready to operate, do not forget to file your taxes first. You should start paying taxes quarterly as soon as possible to avoid a large tax bill. Each state has different tax requirements. Go through the Nevada classification of taxes for the taxes an LLC in Nevada has to pay.

Important Information

Maintaining Professional and Business License in Nevada

Now that you have established your professional corporation, you must maintain or renew your professional license every now and then. Even if your business is established but you don’t have a valid license to operate, your business is irrelevant. And, even if your professional license is still valid for a year or two, but your business license is already expired, it is still irrelevant.

Make time to check the status of your licenses at least once per year. Then, you can keep from missing anything significant. If there are any issues, you can address them.

Filing an Annual Report in Nevada

In Nevada, you will be required to submit a report each year. The owners’ and Registered Agent’s names and contact details are listed in the annual report. Also, it should include all of your yearly financial activity. You must submit one yearly in Nevada, and you can do it yourself or hire someone else to handle it. Everything must be precise and up to date.

Advantages of Forming a Professional Corporation in Nevada

A professional corporation takes a lot of time to process and pursue. However, with the help of the Nevada Registered Agent, everything will become easier. In fact, there are advantages that will help you form a professional corporation in Nevada.

  1. Limited Liability: The biggest advantage of setting up a professional corporation is that the owners are not held personally responsible for the debts and obligations of the company. This indicates that only the company’s assets will be confiscated to settle claims and creditors if the business is sued or declares bankruptcy. Additionally, this protection exempts corporate owners from being held accountable for other owners’ reckless or criminally negligent acts.
  1. Tax Deductions: Similar company expenses, such as employee fringe benefits, startup and operating costs, and equipment purchases, can be written off by professional companies in the same ways they can be for other kinds of firms. However, there are several tax deductions professional corporations can take advantage of that other types of businesses can’t. For example, the salaries and bonuses paid to owners and employees are tax-deductible.
  1. Retained Earnings: Professional corporations can keep a portion of their profits under the corporate tax system to grow their companies.

FAQs

What are the advantages of forming a professional corporation in Nevada?
Nevada offers several advantages when forming a professional corporation, including asset protection, tax advantages, and flexibility in corporate governance.
What are the qualifications to form a professional corporation in Nevada?
The qualifications to form a professional corporation in Nevada depend on the profession. Generally, professionals such as physicians, attorneys, architects, engineers, and accountants are allowed to form a professional corporation.
What is the filing process for forming a professional corporation in Nevada?
The filing process for forming a professional corporation in Nevada involves filing the Articles of Incorporation with the Nevada Secretary of State. The articles must include the name of the corporation, the purpose, the initial registered agent’s name and address, and the number of authorized shares.
Is there a fee to form a professional corporation in Nevada?
Yes, there is a fee of $75 to form a professional corporation in Nevada.
How long does it take to form a professional corporation in Nevada?
It typically takes between two and four weeks to form a professional corporation in Nevada.
Are there any special rules or regulations for professional corporations in Nevada?
Yes, professional corporations in Nevada must comply with certain rules and regulations, including the requirement to appoint a registered agent, the requirement to hold an initial organizational meeting, and the obligation to keep corporate records.
What is the taxation structure for professional corporations in Nevada?
Professional corporations in Nevada are subject to the same state and federal taxation structure as other corporations.
Is an annual report required for professional corporations in Nevada?
Yes, professional corporations in Nevada are required to file an annual report with the Nevada Secretary of State.
Does Nevada allow professional corporations to be formed by non-residents?
Yes, Nevada allows professional corporations to be formed by non-residents.
What type of documents are required to form a professional corporation in Nevada?
The documents required to form a professional corporation in Nevada include the Articles of Incorporation, the Bylaws, and the Operating Agreement.
What is the minimum number of shareholders required to form a professional corporation in Nevada?
The minimum number of shareholders required to form a professional corporation in Nevada is one.
What is the minimum capital requirement for a professional corporation in Nevada?
There is no minimum capital requirement for a professional corporation in Nevada.
Does Nevada allow for the formation of professional limited liability companies?
Yes, Nevada allows for the formation of professional limited liability companies.
Does Nevada allow for the formation of professional limited partnerships?
Yes, Nevada allows for the formation of professional limited partnerships.
What is the process for amending the Articles of Incorporation of a professional corporation in Nevada?
The process for amending the Articles of Incorporation of a professional corporation in Nevada involves filing an amendment form with the Nevada Secretary of State.
Does Nevada allow for the formation of multi-state professional corporations?
Yes, Nevada allows for the formation of multi-state professional corporations.
What is the process for dissolving a professional corporation in Nevada?
The process for dissolving a professional corporation in Nevada involves filing a Certificate of Dissolution with the Nevada Secretary of State.
Does Nevada require professional corporations to have a board of directors?
Yes, Nevada requires professional corporations to have a board of directors.
Does Nevada require professional corporations to hold annual shareholder meetings?
Yes, Nevada requires professional corporations to hold annual shareholder meetings.
What are the requirements for issuing stock in a professional corporation in Nevada?
Nevada requires professional corporations to issue stock in accordance with the corporation’s Articles of Incorporation and the Bylaws.
Does Nevada require professional corporations to have a registered agent?
Yes, Nevada requires professional corporations to have a registered agent.
Does Nevada require professional corporations to hold an initial organizational meeting?
Yes, Nevada requires professional corporations to hold an initial organizational meeting.
Does Nevada allow professional corporations to issue stock options?
Yes, Nevada allows professional corporations to issue stock options.
Are there any restrictions on the transfer of shares in a professional corporation in Nevada?
Yes, there are restrictions on the transfer of shares in a professional corporation in Nevada.
Does Nevada require professional corporations to keep corporate records?
Yes, Nevada requires professional corporations to keep corporate records.
Is there a minimum capital requirement in Nevada to form a professional corporation?
No, there is no minimum capital requirement in Nevada to form a professional corporation.
What is a professional corporation in Nevada?
A professional corporation in Nevada is a type of business entity which is owned and operated by licensed professionals such as doctors, lawyers, accountants, architects, and more.
What are the benefits of forming a professional corporation in Nevada?
Forming a professional corporation in Nevada can provide personal liability protection, tax advantages, continuity of business ownership and succession planning.
How do I form a professional corporation in Nevada?
To form a professional corporation in Nevada, you must first file a Certificate of Incorporation with the Nevada Secretary of State, then register with the Nevada Department of Taxation and obtain a business license.
What documents are required to form a professional corporation in Nevada?
To form a professional corporation in Nevada, you must file a Certificate of Incorporation with the Nevada Secretary of State, obtain a business license from the Nevada Department of Taxation, and submit a Statement of Information to the Nevada Secretary of State.
What is the fee for forming a professional corporation in Nevada?
The filing fee for a professional corporation in Nevada is $75 payable to the Nevada Secretary of State.
What are the ongoing requirements for a professional corporation in Nevada?
Professional corporations in Nevada must file an annual list of officers and directors with the Nevada Secretary of State and pay a $150 fee. They must also file an annual report with the Nevada Department of Taxation and pay an annual franchise tax.
What are the tax requirements for a professional corporation in Nevada?
Professional corporations in Nevada must pay state and federal taxes. They must also file an annual report with the Nevada Department of Taxation and pay an annual franchise tax.
What are the reporting requirements for a professional corporation in Nevada?
Professional corporations in Nevada must file an annual list of officers and directors with the Nevada Secretary of State and pay a $150 fee. They must also file an annual report with the Nevada Department of Taxation and pay an annual franchise tax.

Also Read

Why Nevada Professional Corporation is So Important

One of the key reasons why Nevada Professional Corporation is so important is its business-friendly environment. Nevada is renowned for its low tax rates, minimal regulatory burdens, and supportive legal framework, making it a highly attractive destination for professionals looking to start their own businesses. By forming a professional corporation in Nevada, professionals can take advantage of these favorable conditions to establish and operate their businesses more efficiently and profitably.

Additionally, Nevada Professional Corporation status offers a level of legal protection and peace of mind that is essential for professionals in today’s competitive business world. By forming a professional corporation, professionals can shield their personal assets from the liabilities of their business, providing a vital layer of asset protection that can safeguard their financial well-being and mitigate risk. This protection is especially crucial for professionals in high-liability fields, such as medicine, law, or accounting, where the risk of legal action or malpractice suits is ever-present.

Furthermore, Nevada Professional Corporation status allows professionals to enjoy enhanced credibility and reputation within their respective industries. By establishing themselves as a professional corporation, professionals can convey a sense of professionalism, legitimacy, and trustworthiness to their clients, customers, and peers, enhancing their brand image and marketability. This can result in increased client confidence, better business opportunities, and a stronger competitive edge in the marketplace.

Moreover, Nevada Professional Corporation status provides professionals with greater flexibility and autonomy in managing their businesses. By forming a professional corporation, professionals can structure their businesses in a way that suits their unique needs, preferences, and long-term goals. They can choose the type of corporate structure that best aligns with their business model, whether it be a C corporation, an S corporation, or a limited liability company (LLC), and tailor their operations accordingly.

In conclusion, Nevada Professional Corporation is an indispensable tool for professionals looking to establish, expand, and protect their businesses in the dynamic and fast-paced business environment of Nevada. By leveraging the numerous advantages and benefits that professional corporation status offers, professionals can position themselves for success, growth, and sustainability in the long run. Whether they are establishing a new practice, expanding their client base, or seeking to enhance their credibility and reputation, forming a professional corporation in Nevada can be a strategic and worthwhile decision for professionals across various industries.

Conclusion

In forming a professional corporation in Nevada, having someone to help you build it is not necessary but suggestible. Even though it is easy because of the listed benefits and advantages above, forming your group of professional individuals will make it somehow successful. Just make sure to be guided by the steps and ensure that every one of the details and records is accurate and precise. And if you have any questions, share them in the comment section below.

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