Entrepreneurs in Nevada may consider using a limited liability company, or an LLC, to be the entity under which they operate their business. An LLC is a type of business structure that is defined by state statutes, which can vary from state to state.
The majority of states do not place restrictions on ownership of an LLC; owners, or members, can be other LLCs, individuals, foreign entities or corporations. There is also no limit to the number of members that an LLC can have. In the majority of states, LLCs that are single-member LLCs, or those that have just one owner, can be created.
There are some types of businesses that are generally not permitted to be LLCs. They include insurance companies and banks. People who want to create an LLC for their enterprise should examine their state’s requirements and consult federal tax regulations to determine if their enterprise is eligible to become an LLC. It is also important to note that foreign LLCs are governed by special rules.
The Internal Revenue Services will treat an LLC as a partnership, corporation or as a disregarded entity, or as part of the tax return of the LLC’s owner. The treatment the LLC receives from the IRS will be based on the elections that are made by the LLC’s members and by the LLC itself. For income tax concerns, LLCs with just one member will be treated as a disregarded entity unless the LLC files Form 8832 to be treated as a corporation.
An attorney who provides business formation & planning services may assist clients with filing the necessary legal paperwork to create an LLC. The attorney might consider a client’s purpose for a single-member LLC and may make recommendations regarding the best legal organization options for a particular business.