Corporation Entity Availability In Nevada – A Guide

September 14, 2004
By Richard Smith

As is the case in nearly all other states in the United States, Nevada primarily has three different forms on corporate entity: the corporation; the limited liability company (LL.C.); and limited partnerships. Nonetheless, making a decision on the corporation entity availability in Nevada can, at times, be confusing. To assist you in this endeavor, the following a certain factors you may wish to keep in mind:

Corporations Essentially Nevada corporations are limited liability entities established in order to protect the assets of the corporate entity’s investors and to seek maximum tax savings on the revenue of such investors. Therefore, simply put, the shareholders of the entity are its owners and the officers or directors of the corporation are its managers.

Insofar as Nevada is concerned, corporations are interesting in that you can register your entity as an ‘S’ corporation, ‘C’ corporation, or ‘professional’ corporation. In most other states ‘professional’ status is not an option for those looking to incorporate an entity; in Nevada, however, this option is available to those wishing to render services with one specific profession; for example, legal or accounting services. On the other hand, both ‘S’ and ‘C’ corporations can be incorporated in other states. The essential difference between an ‘S’ corporation and ‘C’ corporation is that in the former the entity elects to be taxed as a follow through entity, whilst in the later the entity elects to be taxed both on profits earned and dividend distributed – thereby subjecting itself to what is commonly known as double taxation. However, as Nevada State neither has corporate tax, nor individual tax, registering as either of these two entities has less significance than elsewhere.

Limited Liability Corporations (LL.C.) are corporations which have members, as opposed to shareholders, and which are managed by managers, as opposed to officers and directors. Principally, LL.C.s are a popular vehicle to use if you want to limit your real estate investment liability and are rarely used outside this rather defined area.

Limited liability partnerships are operated and owned by their general and limited liability partners. In short, limited liability partners have their risk limited to their initial investment, but are not entitled to be involved in the management of the partnership, whereas general partners have unlimited liability, but can be involved in the general management of the partnership. Although a useful tool in some states, in Nevada there is little call for use of a limited liability partnership and most companies operate either as ‘S’ corporations, ‘C’ corporations or ‘professional’ corporations.