The Nevada LLC is a unique non-taxable offshore corporate structure, frequently used for conducting international business outside of the United States. An LLC is formed by one or more business people, as owners. The owners, called Members, file Articles of Organization and set out an Operating Agreement. An LLC is a pass-through type of business, because the profits and losses are passed on to the Members depending on their share of membership.
LEGAL FORM
In October, 1991, Nevada enacted the legislation which enables the formation of a Nevada Limited Liability Company (LLC). An LLC is a combination of a corporation and a partnership which has become extremely popular in recent years. Like a corporation, an LLC has a legal existence separate from its owners; and the owners and managers are not personally liable for the company’s debts and obligations. Like a partnership or an S-corporation, an LLC is automatically treated as a pass-through entity for tax purposes. Key elements of a Nevada LLC include:
- A creditor of the owner of a Nevada LLC cannot seize the assets of the LLC.
- A single-member Nevada LLC is automatically disregarded as an entity separate from its owner and includes all of its income and expenses on the owner’s 1040 tax return.
- A Nevada LLC with two or more members is treated as a partnership.
- There is unmatched contractual flexibility with a Nevada LLC. Nevada law provides rules only on matters on which the members have failed to agree. This is known as Freedom of Contract and nowhere is it stronger than in Nevada.
- Personal liability is limited for owners and managers to the amount of their investment in the company, just like a corporation.
- Non-U.S. owners of a Nevada LLC with no U.S. source income pay no U.S. taxes whatsoever.
- A Nevada LLC may be formed by one or more organizer or member.
COMPANY NAME
The Nevada LLC company may not use a name identical or similar to an existing company within the State of Nevada. The use of the following words is also prohibited: Bank, Insurance, or Reinsurance. After Nevada company formation, the Limited Liability Company must have these words after the company name or the abbreviation thereof i.e. Limited Liability Company, L.L.C., or LLC.
MEMBERS
An LLC does not issue shares and therefore does not have shareholders. The owners of an LLC are referred to as members. A Nevada LLC may have a minimum of one “member” (owner) or more. Each member of a Nevada LLC is liable only to the extent of his or her percentage of ownership in the LLC. Members may be an individuals or corporate bodies. There is no limit on the number of members allowed in a Nevada LLC.
DIRECTORS
The management of a Nevada LLC is based on an agreement between its owners, who are known as members. A Nevada LLC allows a customized management structure, which dictates the economic relationship among owners. While Nevada law permits a Nevada LLC to be managed by its members, it does not require members to be managers. The Nevada LLC statute allows parties to define their business relationship in the written agreement however they wish. This is called Freedom of Contract. Nevada Law provides rules only for those matters on which the parties have failed to agree. The contractual flexibility offered by the Nevada Act is unmatched by any other LLC statute. For example, unlike a corporation, an LLC can distribute profits in any manner described in the LLC agreement, regardless of ownership share. The structure of the LLC does not provide for a Board of Directors.
REGISTERED OFFICE AND LOCAL AGENT/SECRETARY
Nevada law requires for Nevada LLCs to have a registered agent when Nevada LLC is first formed and throughout the life of Nevada company. The registered agent’s name and address are included on the formation documents. This information is a matter of public record. The registered agent is responsible for receiving important legal and tax documents including: notice of litigation (service of process), franchise tax forms and annual report forms.
MEETINGS
There are no statutory requirements concerning meetings of members or record keeping. It is recommended that with two or more members, Members’ Agreement be entered into. If meetings are held by members, this may be done anywhere in the world and in any way convenient to the members.
INCORPORATION TIME
Usually it is 1 working day, but we need up to 10 working days for legalization of the documents and delivery by courier.
RECURRING AND MAINTENANCE FEE AS FROM 2ND YEAR
- Provision of registered office and registered address
- Provision of company Secretary and registered agent
- Payment of annual government fee