Nevada LLC Operating Agreement

LLC is a frequent choice of legal entity for companies in the United States. When you create an LLC, you can also take out a fillable LLC operating agreement form. This document is optional under Nevada law, but it often makes your life easier, so it’s highly recommended.

In the agreement, you can specify:

  • Purpose and duration of LLC
  • LLC ownership
  • Capital contribution of each member
  • Distribution of profit or loss among members
  • Statement of taxes
  • Management principles

It is imperative to label all this information somewhere to avoid misunderstandings between company members.

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The LLC operating agreement does not need to be certified by a notary, but each member must keep a copy of the document signed by all members. It is also good to provide copies to your investors, accountants, lawyers or attorneys, banks, and title companies. You do not need to give the agreement to the Secretary of State. It will be enough to provide Articles of Organization because some of the information in these documents is duplicated.

Nevada’s LLC operating agreement does not have one form prescribed by law but usually contains the clauses that we indicate below. For easy execution of the agreement, we recommend you use the form-building software on our website.

  • Basic Information. Indicate basic data as in the Articles of Organization, such as LLC name, effective date, purpose, and duration of LLC.
  • Initial Capital Contribution. After registering a company, you must contribute its initial capital and indicate its amount in the agreement. If there is more than one member, you need to indicate how much each contributed.
  • LLC Ownership. Each LLC member is awarded a certain share of the company according to their contributions, which is usually expressed as a percentage. To denote who has how much, the following definitions have been introduced: “ownership interest,” “ownership units,” and “ownership percentage.”
  • Distribution of Profits. The company’s profits are distributed according to the ownership percentage. Profit distribution can be done either by bank transfer or by writing a check.
  • Tax structure. A summary of the selected tax structure for your LLC.
  • Membership Voting. Write down the rules by which voting will be made. If you choose a manager-managed operation, then the manager will make most of the decisions himself without calling special voting. But important decisions, such as accepting a new board member, require voting. Votes are also allocated according to the ownership percentage.

An LLC operating agreement is good not only in the case of a multi-member LLC but also a single-member LLC because you can specify in the agreement the company’s assets and accordingly secure your personal assets.

Thus, the Nevada  LLC operating agreement defines the operational, financial, and management procedures, rights, and powers of the company members and separates the members’ personal assets from their investments in the company.

The execution of this agreement is capable of providing tax incentives for companies in Nevada.

Nevada LLC Laws and Definition

The creation and operation of limited liability companies in Nevada are governed by Chapter 86 of state law.

The operating agreement is governed by NRS 86.286. It states that an operating agreement can only be adopted by unanimous decision and consensus of all members.

Amendments to the agreement can only be made by the members’ general agreement unless otherwise provided in the agreement itself.

An operating agreement does not have to be made before the formation of the LLC. It can be concluded before, after, or when filing the articles of the organization.

The law clarifies the admission of persons as LLC members after the death or expulsion of another member.

We recommend carefully studying the law before creating an operating agreement. You may need legal advice.

Popular Local Operating Agreement Forms

An operating agreement is an instrument that sets out the LLCs’ ownership, management, and each member’s responsibilities and rights. Have a look at some other printable operating agreement templates often filled out by Americans.

Steps to Forming an LLC in Nevada

1. Come up with your Company’s Name

Your name must be valid. You cannot use a pre-existing name.

The name must necessarily include the designation that this is an LLC.

You cannot use a name that can be misleading. It cannot be mentioned that this is supposedly a bank, hospital, government agency, federal government, and so on. Also, there are about 70 prohibited words that cannot be used in the name of your LLC.

You can always check the validity of your name on special sites.

2. Choose a Registered Agent

A registered agent is needed to receive all legal correspondence. This contact will be used in case of litigation or to receive all legal mail.

An agent can be either an individual or a company. The agent must be registered in Nevada.

You or any company member can also act as a registered agent if you reside in Nevada.

There are also specialized registered agent companies whose services are usually paid for one year.

3. File the Forms

In most states, you only need to complete the Articles of Organization and submit it to the Secretary of State.

In Nevada, you must complete three documents:

  • Articles of Organization
  • Initial List of Managers or Managing Members
  • State Business License

Before filling out these documents, you need to decide on the form of management. There are two options:

  • member-managed
  • manager-managed.

At the same step, you need to pay fees for the creation of each of the documents.

4. Create an LLC Operating Agreement

As we mentioned, the creation of this agreement is not required by law, but it can make life easier for the members of the company. Therefore it is recommended by all professionals.

An operating agreement allows you to document all agreements on the creation and management of a company and protect personal assets from investments in the company.

5. Obtain an Employer Identification Number

Next, you need to get the EIN from the Internal Revenue Service (IRS). It is a fast and free process that can be done online or by mail.

Each LLC must have its own EIN. The use of others’ is prohibited and impossible.

With the EIN, you can open a bank account, file taxes, process, and transfer salaries, obtain business loans, or obtain a business license.

6. Comply with Annual Requirements

In the state of Nevada, it is mandatory to meet the annual requirement for LLCs:

  • renew State Business License
  • file an Annual List

You will have to pay for each of these documents every year; failure to comply with these requirements entails fines.

Upon completion of these steps, the creation of an LLC will be formally completed, but for the successful functioning of the company, it is still required to:

  • hire an experienced accountant who will keep accounting records, payroll accounting, and do tax reporting.
  • get insurance for your business, which will help to avoid many risks—risks in front of employees or in the professional sphere;
  • create and publish a press release to announce your company and start an advertising campaign.

Registration of an LLC in Nevada is not a difficult task. However, it requires a certain amount of care and thoroughness. If you follow the steps described in our article, then you should not have any additional difficulties. If you still want to be helped, we recommend contacting a specialist.

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Published: Apr 15, 2022