How to Start an S-Corp in Nevada


Steve Bennett
Steve Bennett
Business Formation Expert
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Start an S-corporation in Nevada

Nevada, popularly known as The Silver State, offers a bunch of benefits for business owners, especially the state capital Carson City has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Nevada, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Nevada. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Nevada, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Nevada. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Nevada.

What is an S-Corp in Nevada?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Nevada. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.

–LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Nevada

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

  • Be a domestic corporation.
  • Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
  • Have just one type of stock.
  • Have a maximum of 100 shareholders or members.
  • Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Nevada.

How to Start an S-Corporation in Nevada?

To create S-Corp in Nevada, you must follow the below guidelines that include forming a business name, hiring a Registered Agent, filing your Articles of Organization, creating an operating agreement in Nevada, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Nevada

After you have decided on the idea to start an S-Corp in Nevada, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on Nevada LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

  • Avoid profanities
  • The name should be available, and no other entity should have the same name in Nevada.
  • Limit of restricted words that need a license in Nevada, for example, doctors, attorneys, etc.
  • Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Nevada Registered Agent

The next step in starting an S-corp in Nevada is hiring a 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 (such as subpoenas), all notices of lawsuits, and other official government correspondence in Nevada. Forming an LLC and an S-corp will be easier if you have Registered Agent in Nevada.

Step 3: File Your Nevada Articles of Organization

The Articles of Organization is an important document to start your limited liability company (LLC). Nevada Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Articles of Organization” to be filed, you need to pay a filing fee to the state. In Nevada, the filing fee is $425.

In California, along with the Articles of Organization, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Nevada

After you have filed your Articles of Organization in Nevada, the next step is to create an LLC operating agreement in Nevada. The Nevada LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

  • Article I: Organization
  • Article II: Management and Voting
  • Article III: Capital Contributions
  • Article IV: Distributions
  • Article V: Membership Changes
  • Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for 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 general partnership. 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- You can apply for EIN online, the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • 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.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Nevada

Once you have obtained your EIN and Articles of Organization to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Nevada, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Ogden, UT 84201 Fax: 855-214-7520 .

Advantages of Starting an S-Corporation in Nevada

Filing an S-Corp in Nevada has numerous benefits and advantages.

  • Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.
  • Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Nevada apply for an S-Corp LLC.
  • Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp in Nevada?
An S-Corp in Nevada is a type of corporation that has elected to be taxed under Subchapter S of the Internal Revenue Code (IRC). It allows the business to pass corporate income, losses, deductions and credits through to its shareholders for federal tax purposes.
What are the benefits of forming an S-Corp in Nevada?
There are many benefits of forming an S-Corp in Nevada, including
What are the steps for forming an S-Corp in Nevada?
The steps for forming an S-Corp in Nevada include
What paperwork is required to form an S-Corp in Nevada?
The paperwork required to form an S-Corp in Nevada includes filing the Articles of Incorporation with the Nevada Secretary of State, obtaining a federal employer identification number (EIN) from the IRS, creating a corporate operating agreement, and filing Form 2553 with the IRS to elect S-Corp status.
What are the fees associated with forming an S-Corp in Nevada?
The fees associated with forming an S-Corp in Nevada include the filing fee for the Articles of Incorporation with the Nevada Secretary of State, the fee for obtaining a federal employer identification number (EIN) from the IRS, and any legal fees associated with drafting the corporate operating agreement.
How long does it take to form an S-Corp in Nevada?
The process of forming an S-Corp in Nevada typically takes 4-6 weeks.
What is the statutory filing fee to form an S-Corp in Nevada?
The statutory filing fee to form an S-Corp in Nevada is $75.
What is the annual report fee for an S-Corp in Nevada?
The annual report fee for an S-Corp in Nevada is $150.
What is the franchise tax rate for an S-Corp in Nevada?
The franchise tax rate for an S-Corp in Nevada is a flat rate of $225.
What is the minimum capital required to form an S-Corp in Nevada?
There is no minimum capital required to form an S-Corp in Nevada.
Is there an annual meeting requirement for an S-Corp in Nevada?
Yes, an annual meeting of shareholders is required for an S-Corp in Nevada.
Is there a shareholders agreement required for an S-Corp in Nevada?
While not required, it is strongly recommended that S-Corp shareholders in Nevada enter into a shareholders agreement to provide clear guidelines and expectations of the shareholders.
Is there a residency requirement to form an S-Corp in Nevada?
No, there is no residency requirement to form an S-Corp in Nevada.
Is there a minimum number of shareholders required to form an S-Corp in Nevada?
The minimum number of shareholders required to form an S-Corp in Nevada is one.
Is there a maximum number of shareholders allowed for an S-Corp in Nevada?
There is no maximum number of shareholders allowed for an S-Corp in Nevada.
Does an S-Corp in Nevada need to have a board of directors?
Yes, an S-Corp in Nevada is required to have a board of directors.
Are there any corporate formalities that must be observed for an S-Corp in Nevada?
Yes, there are corporate formalities that must be observed for an S-Corp in Nevada, including holding annual meetings of shareholders and board of directors, keeping minutes of all meetings, and filing annual reports with the Nevada Secretary of State.
Is there an annual filing requirement for an S-Corp in Nevada?
Yes, an annual filing requirement for an S-Corp in Nevada is to file an annual report with the Nevada Secretary of State.
Is there a Nevada corporate income tax for an S-Corp in Nevada?
No, there is no Nevada corporate income tax for an S-Corp in Nevada.
What is the tax rate for an S-Corp in Nevada?
An S-Corp in Nevada is a pass-through entity, so profits and losses are passed through to the shareholders and reported on their personal tax returns.
Is there a franchise tax for an S-Corp in Nevada?
Yes, there is a franchise tax for an S-Corp in Nevada, which is a flat rate of $225.
Is there a net worth requirement for an S-Corp in Nevada?
No, there is no net worth requirement for an S-Corp in Nevada.
What types of businesses are allowed to be formed as an S-Corp in Nevada?
All types of businesses are allowed to be formed as an S-Corp in Nevada.
How often must taxes be filed for an S-Corp in Nevada?
Taxes must be filed annually for an S-Corp in Nevada.
Is there a minimum age requirement to form an S-Corp in Nevada?
No, there is no minimum age requirement to form an S-Corp in Nevada.
Is there a sales tax for an S-Corp in Nevada?
Yes, there is a sales tax for an S-Corp in Nevada, which is currently 6.85%.
Is Nevada a good place to form an S-Corp?
Yes, Nevada is a good place to form an S-Corp, as it offers many benefits, including protection from personal liability and potential tax savings.
Does an S-Corp in Nevada need to have a registered agent?
Yes, an S-Corp in Nevada is required to have a registered agent, who must be a Nevada resident.
What are the requirements to form an S-Corp in Nevada?
To form an S-Corp in Nevada, you must file Articles of Incorporation with the Nevada Secretary of State, obtain a Nevada registered agent, and pay applicable state fees. You must also submit a corporate resolution and obtain an Employer Identification Number (EIN) from the IRS.
How much does it cost to form an S-Corp in Nevada?
It typically costs $235 to form an S-Corp in Nevada, which includes a $75 filing fee and a $150 franchise tax fee. Additionally, you may need to pay for other legal services to prepare the Articles of Incorporation.
What are the tax benefits of forming an S-Corp in Nevada?
Forming an S-Corp in Nevada can provide tax benefits such as reduced self-employment taxes, deductions for health insurance premiums, and the ability to pass business income and losses through to shareholders.
How do I maintain compliance with Nevada’s laws and regulations?
You must adhere to Nevada’s laws and regulations, including filing annual reports and paying applicable taxes. It is also important to keep up to date with changes in Nevada’s laws and regulations.
Are there any restrictions on who can own an S-Corp in Nevada?
Yes, Nevada has restrictions on who can own an S-Corp. Generally, the owners must be U.S. citizens, residents, or entities, and the company must be managed by a board of directors.
What paperwork do I need to file for my S-Corp in Nevada?
You must file Articles of Incorporation with the Nevada Secretary of State, obtain a Nevada registered agent, and submit a corporate resolution. Additionally, you will need to obtain an Employer Identification Number (EIN) from the IRS.

Also Read

Why Nevada S Corporation is So Important

One of the key reasons why the Nevada S Corporation is so important is its tax advantages. S Corporations are known for their pass-through taxation, which allows profits and losses to be passed directly to the shareholders’ personal tax returns. This means that the business itself is not taxed, resulting in potential tax savings for the owners. In a state like Nevada, where there are no state corporate income taxes, S Corporations can provide even greater tax benefits to business owners.

Additionally, the structure of an S Corporation allows for limited liability protection for its shareholders. This means that individual shareholders are not personally liable for the debts and obligations of the corporation, protecting their personal assets from potential lawsuits or creditors. In Nevada, S Corporations also have the added advantage of being able to issue stocks, which can help attract investors and raise capital for the business.

Furthermore, forming an S Corporation in Nevada can offer entrepreneurs increased credibility and legitimacy in the eyes of customers, vendors, and potential business partners. By establishing a formal legal structure for their company, business owners demonstrate a commitment to professionalism and transparency, which can help build trust and foster strong relationships within the business community.

Another important factor to consider is the flexibility and ease of management that comes with an S Corporation in Nevada. Unlike a traditional C Corporation, which has strict rules and regulations regarding governance and management, S Corporations have more flexibility in terms of ownership, management structure, and decision-making processes. This can be especially beneficial for smaller businesses or startups looking to maintain operational control while still enjoying the benefits of a corporate entity.

Overall, the Nevada S Corporation offers entrepreneurs a smart and strategic choice for legal business structure. From tax advantages and limited liability protection to increased credibility and flexibility, the benefits of forming an S Corporation in Nevada are vast and can help businesses thrive and grow in today’s competitive market.

As more and more entrepreneurs seek to establish their businesses in Nevada, the importance of the S Corporation as a preferred legal structure cannot be overstated. By taking advantage of the numerous benefits that come with an S Corporation, business owners can set themselves up for long-term success and sustainability in their respective industries.

Conclusion

In conclusion, starting an S-corp in Nevada is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Nevada.

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