Are you looking to form a professional limited liability company (PLLC) in Nevada, but you’re not sure how the formation process works? There are several important steps when it comes to creating a Nevada PLLC that is compliant and able to do business in the state.
What is a Nevada Professional LLC?
The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. In Nevada, a PLLC is an LLC formed for the purpose of rendering certain personal services that may only be legally performed pursuant to a license, certificate of registration or other legal authorization. Such professional services include services rendered by, among others, physicians, architects, and social workers.
The Nevada PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.
PLLCs in Nevada have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.
An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.
Forming a PLLC in Nevada (in 6 Steps)
Step One) Choose a PLLC Name
Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:
In Nevada, the name of a professional limited liability company must contain the words “Professional Limited-Liability Company” or the abbreviation “Prof. L.L.C.,” “Prof. LLC,” “P.L.L.C.” or “PLLC”; the word “Chartered” or the abbreviation “Chtd.”; or the word “Limited” or the abbreviation “Ltd.” The name must also contain the last name of one or more of the PLLC’s current or former members.
Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
Do You Like It?
At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. You can check if a name is available by using the Business Search tool on Silver Flume, Nevada’s online business portal. Once you’ve chosen a business name, you can reserve the name online through Silver Flume for 90 days for a fee of $25. You can also submit a paper Name Reservation Request form to the Secretary of State.
Step Two) Designate a Registered Agent
Every PLLC in Nevada is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.
In Nevada, there are three types of registered agents that your PLLC can appoint: a commercial registered agent, a noncommercial registered agent, and a title or office within your PLLC. A commercial registered agent is a registered agent that represents 10 or more entities and must register with the Secretary of State. A noncommercial registered agent can be any individual or entity with a physical address in Nevada, so long as they don’t act as a registered agent for 10 or more entities. If your PLLC has a physical address in Nevada, a title or office within your PLLC (such as the President, Office Manager, Owner, etc) can also be appointed as the registered agent.
Without a registered agent, you could lose your good standing with the state of Nevada, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.
Step Three) File Formation Documents with the State
Once you are ready to form your Nevada professional limited liability company, you will fill out the Articles of Organization.
This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:
- Name of the PLLC
- Type, name and street and mailing addresses of your registered agent
- Name(s) and address(es) of your PLLC’s initial member and managers
- Whether your PLLC will be manager-managed or member-managed
- Profession to be practiced by your PLLC
- Name, address and signature of the organizer
- Signature of registered agent certifying acceptance of appointment
Your Articles of Organization may be submitted in person or by mail with the Nevada Secretary of State. Note that you will also need to file a certificate from the regulatory board overseeing your profession stating that each organizer, member and manager of the PLLC is licensed in such profession. You will also need to file an initial list of managers or managing members, which includes an application for the required state business license, at the time of formation. After formation, this list must be filed on an annual basis. The list can be filed either in person, by mail, or online through Silver Flume.
Cost to Form a PLLC
The filing fee for the Articles of Organization is $75, the initial manager and member list fee is $150, and the business license fee is $200.00. Your filing may be expedited for an additional fee ranging from $125 to $1,000.
Nevada generally takes around 2 business weeks to process new entity filings. Current processing times are posted on the Secretary of State’s website. 24 hour, 2 hour and 1 hour expedited options are also available.
Step Four) Create an Operating Agreement
After you register a PLLC in Nevada, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:
- Individual members' ownership percentages
- Rights and responsibilities
- Voting powers and meeting guidelines
- Allocation of profits and losses
- Management rules for the PLLC
- Provisions for buying a member owner out, or transferring their shares in the case of illness or death
Step Five) Handle Taxation Requirements
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
All business entities engaging in business in Nevada are generally subject to Commerce Tax and must file a Commerce Tax Return. Your PLLC may also be subject to other state-level taxes based on the nature of your PLLC’s business activities. Nevada is one of the few states that does not impose any state income tax for either individuals or businesses. For more information about Commerce Tax and other Nevada taxes, you can visit the Nevada Department of Taxation’s website. Silver Flume, Nevada’s online business portal, can help guide you through tax registration. You can also register, file returns, pay taxes and manage your business taxes through the Nevada Tax Center website.
Depending on where in Nevada your business is located, you may also need to pay some local taxes. You should be sure to check with the city and county in which your PLLC is located to confirm your PLLC’s local tax obligations. You can find business resources for the four largest cities in Nevada online: Las Vegas, Henderson, Reno, and North Las Vegas.
Step Six) Obtain Business Licenses and Permits
All Nevada LLCs, including PLLCs, are required to maintain a state business license in Nevada. The business license application is included as part of the list of of managers and members form that is required to be filed on an annual basis. The state business license fee is $200 and must be paid at the time of formation and on an annual basis thereafter. The annual list and fee are due on the last day of the anniversary month in which the form was originally filed.
Note that you may also need to obtain certain city and/or county licenses in order to legally operate your business. Given the nature of a PLLC, you will also likely need to have a professional license. Silver Flume’s interactive startup guide can help you determine your local and professional licensing requirements.
Would You Prefer a Professional Form Your PLLC?
If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.
Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.
Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.
Next Steps: What to Do After Creating a PLLC in Nevada
Open a business bank account
We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
If you plan to hire employees for your PLLC, keep in mind that Nevada generally requires that employers with one or more employees obtain workers’ compensation insurance. There are few exceptions to this requirement. You can learn more about the workers’ compensation requirement on the Nevada Department of Business and Industry’s website. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.
Understand income reporting
Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.
Nevada does not impose any income tax and income reporting is not required.
Understand annual reporting
As described above, Nevada requires that all LLCs file an annual list of managers or managing members, which includes an application for the required state business license. The filing fee for the list is $150 and the state business license fee is $200. This list can be filed online through Silver Flume or in person or by mail with the Secretary of State.
Find an accountant
We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.