If you are considering forming an LLC or investing in an LLC, you may have read that many business advisers encourage their clients to incorporate in the state of Nevada even if their business isn’t geographically located there. These so-called Nevada LLCs offer several benefits on the state level on top of the other benefits I described in Limited Liability Companies for Beginners - The New Investor's Guide to LLCs.
In fact, in the past few years, Nevada LLCs seem to be as well regarded as Delaware LLCs.
Nevada LLCs Have Virtually No State Level Taxes
When you have a Nevada LLC, there are virtually no state level taxes including:- No corporate income tax
- No personal income tax
- No franchise tax on income
- No admissions tax
- No unitary tax
- No inheritance or gift tax
Nevada LLCs Have the Highest Privacy Standards
When you form a Nevada LLC, you enjoy the highest state privacy levels available. Unlike many other states, Nevada LLCs do not require a list of stockholder names to be filed with the state. That means that investors can remain anonymous.There Are Significant Asset Protections with a Nevada LLC
In the state of Nevada, liability is limited to the company. As a manager, officer, or director, you aren’t normally held responsible for the company’s liabilities or obligations unless you are part of an outright fraud or sign documents agreeing to a personal guarantee.Furthermore, unlike other states, a Nevada LLC does not require firms to file a list of company assets.
That means that there is no record of the assets being linked to you in any way except for your filings with the Internal Revenue Service, which are protected by law. This means that if you can avoid any other records linking you to the money, it is theoretically possible you could be a school teacher halfway across the country yet have millions tucked away in private businesses, stocks, bonds, mutual funds, and other assets in an Nevada LLC.