For many small businesses, forming a Limited Liability Corporation (LLC) provides tax benefits, simplifies administration, and allows for more flexibility in management. Yet some small businesses need more than just a single LLC. For these ventures, a Series LLC may be the right choice.
Series LLC Overview
A Series LLC consists of a “parent,” “master,” or “umbrella” LLC and one or more “unit” LLCs. The parent LLC manages the units. Each unit carries out business and maintains its own books just as if it were a lone LLC, yet each unit also coordinates with the parent LLC to the extent the business owner requires.
Some businesses benefit from the Series LLC model. Property managers, for example, may wish to create a separate LLC for each property and manage them all under the parent LLC. A coffee shop, boutique, or other small retail owner with multiple locations may also wish to assign each location to a unit LLC and manage them all under a parent LLC.
Both conventional LLCs and Series LLCs provide personal liability protection to business owners by separating the owner’s personal assets from those of the business. If a Series LLC’s parent or any unit faces legal liability, the business owner’s personal assets, like their home or vehicle, aren’t on the table. A sole proprietorship or partnership does not provide this protection.
Steps To Start A Series LLC In Nevada
To set up your Series LLC in Nevada, follow the steps below.
Step 1: Name the Parent LLC and the Unit LLC(s)
The first step is to choose a name for your Series LLC. Each state has different rules for naming a Series LLC; in Nevada, Series LLC names must follow the same rules for naming any other type of LLC.
The name of an LLC in Nevada:
- Must be distinguishable from the name of any existing business entity in Nevada,
- Must not contain words that could cause the public to confuse it with a government agency, and
- Must not contain words on the state’s Restricted Word List, unless you also apply for and receive the required approval.
- Must contain a designator like “LLC” or “limited liability company.”
To determine if you’ve chosen a unique business name, use the Nevada Business Search tool on the secretary of state website. The tool allows you to search for exact matches or for names with similar elements to your chosen name.
Related: How to search Nevada business names
Nevada does not have specific rules for naming unit LLCs, other than the rules that apply to naming any LLC. However, for clarity, consider naming unit LLCs with:
- The full name of the parent LLC,
- Terms that designate exactly what the unit LLC does, and
- Terms like “an individual protected series” to demonstrate the unit LLC belongs to the parent LLC.
For example, if you open a series LLC to manage rental properties in Nevada, you might call the series LLC something like “Lake Mead Magic Properties Holdings, LLC.” The individual properties might be named after their addresses, like “123 Nopales Drive Lake Mead Magic Properties Holdings LLC” or “123 Nopales Drive LLC, an individual protected series of Lake Mead Magic Properties Holdings, LLC.”
Finally, consider checking to see if a URL matching your chosen business name is available. If so, registering this URL can make it easier for customers to find your business online.
Step 2: Appoint a Nevada Registered Agent
Next, your Series LLC will need a registered agent. A registered agent is a person or business that is physically located in the state and is available to receive mail and service of legal documents for the LLC.
A registered agent must be:
- At least 18 years old (if an individual),
- Physically located in the state of Nevada, with a Nevada street address, and
- Available at that address to receive service and mail during normal business hours.
In a series LLC, the parent LLC may serve as registered agent for each of the unit LLCs. You will still need to appoint a registered agent for the parent LLC, however. You may choose to fill the role yourself, appoint another parent LLC owner or manager, or use a registered agent service.
A registered agent must sign the certificate of acceptance on page 2 of the Articles of Organization form or a separate, signed Registered Agent Acceptance form. Both forms are available on SilverFlume, Nevada’s business portal.
Step 3: Filed the Required Series LLC Paperwork in Nevada
Once the Series LLC has names for the parent and each unit LLC and a registered agent is chosen, it’s time to file the required paperwork to establish the Series LLC as a business entity.
The fee to file the Articles of Organization is $75. Additional fees may be added for any amendments, corrections, or other changes, as well as for expedited service. Make sure all the information on your Articles of Organization is correct before filing to avoid unnecessary fees.
The Common Business Registration allows you to apply for certain licenses and permits to do business in Nevada, such as sales and use tax permits, modified business tax permits, and local business licenses. This form must be filed along with the Articles of Organization.
What to Do After Starting a Series LLC in Nevada
Once the Articles of Organization and Common Business Registration are accepted, the Series LLC exists as a legal entity in the state of Nevada. For this entity to carry out daily business tasks, however, it will need some additional items, including an Operating Agreement, a tax ID number, bank accounts, and relevant permits. LLC leadership will also need to file required reports in a timely manner.
Create an Operating Agreement for an Nevada Series LLC
Nevada Revised Statutes 86.101 defines an “operating agreement” as “any valid agreement of the members as to the affairs of a limited-liability company and the conduct of its business.” This agreement may be in written or electronic format, but it may not merely be verbal.
You are not required to file an Operating Agreement with the state of Nevada when you create a Series LLC. However, an Operating Agreement is essential if the Series LLC is to protect the assets in the parent or any unit LLC.
The Operating Agreement lays the ground rules for protecting the assets in the unit LLCs. Amending the Operating Agreement also allows you to add new unit LLCs to the series when needed.
The Operating Agreement can also spell out other essential rules for the business, such as what to do when a member leaves or passes away, how to carry out bookkeeping, how to change the Operating Agreement, and what to do if the business must be dissolved.
Obtain the Necessary EINs
An Employer Identification Number (EIN) is a unique number that identifies a business entity for tax purposes. The Internal Revenue Service (IRS) requires that each tax entity – including a newly formed LLC – have a tax number. You’ll also need an EIN to open business bank accounts for each LLC in the series and to hire employees.
The IRS allows businesses to apply for an EIN online. The IRS does not charge for this service. To apply for an EIN online, have ready:
- The contact information and tax ID number of the “responsible party.” Your parent LLC can be a “responsible party” for each unit LLC once the parent has its own EIN. To obtain an EIN for the parent, you may need to use your own Social Security number or Individual Tax Identification Number (TIN).
- Time to finish the application. The application cannot be saved, and it will time out after 15 minutes of inactivity. Set aside time to complete the application in one sitting.
The parent LLC and each unit LLC in the series will need its own EIN. Plan ahead if you have several unit LLCs – the IRS website allows you to receive only one EIN per “responsible party” per day.
Once the application is complete, the IRS website generates an EIN immediately. Save copies of this information in both print and electronic form. You’ll need them to open bank accounts and do other essential business tasks.
Open Bank Accounts for the Series LLC
The parent LLC and each unit LLC will need separate bank accounts. Separate accounts – with separate bookkeeping – are necessary to protect the assets in each account.
Many banks allow you to apply for a business bank account online or in person. Documentation these banks commonly require includes:
- ID for the person opening the account(s). Some financial institutions require more than one form of ID.
- The EIN for the LLC receiving the account. Use the parent LLC’s EIN for the parent’s account and each unit LLC’s EIN for that unit’s account.
- A copy of the Articles of Organization, demonstrating that the LLC exists as a legal entity in Nevada.
The bank or financial institution may have other requirements as well. Check with that entity before you apply to open one or more business accounts.
Apply for Any Required Business Licenses or Permits
In Nevada, new LLCs apply for certain licenses or permits as part of the formation process. The Common Business Registration form, which is required when the Articles of Organization are filed, serves as an application for sales and use tax permits as well as any local business licenses.
Other licenses and permits, however, remain a separate responsibility. These include licenses or permits for specific types of business. Professionals working with the LLC will need to maintain their professional licenses, for example. Businesses that serve food or offer regulated services like hairstyling will also need to obtain the relevant licenses or permits.
Because unit LLC names can become unwieldy, consider filing a DBA (doing business as) for the units in the series. The DBA allows each unit LLC to do business under a shorter, more colloquial name, making it easier for you and for customers to communicate about the business.
For example, instead of constantly referring to a property as “123 Nopales Drive LLC, an individual protected series of Lake Mead Magic Properties Holdings, LLC,” you may wish to file a DBA allowing the property to do business as “Nopales Retreat.” Tenants who rent the property can write “Nopales Retreat” on their checks instead of the business’s full name. Here, a DBA can also help you match the branding of the property, which you may wish to list online or in local vacation directories as “Nopales Retreat.”
Related: What licenses do Nevada businesses need?
In Nevada, each LLC must file an annual updated list of owners or managers. Each LLC must also renew its business license each year.
These filings are due on the last day of the month in which your LLC was formed. For instance, if you form your Series LLC on April 2, 2024, your first filings will be due no later than April 30, 2025.
Filing the annual list costs $200. The costs of business license renewals will vary depending on which licenses or permits your business needs to renew.
Nevada Series LLC FAQs
How much does it cost to form a Series LLC in Nevada?
Filing the Articles of Organization for a Series LLC in Nevada costs $75. Additional fees exist for expedited filing and for other tasks, like amending a previous filing.
Is there a yearly fee for a Nevada Series LLC?
Each Nevada Series LLC must file an annual report with the state. The annual fee that must accompany this filing is $200.
How long does it take for my Series LLC to be approved in Nevada?
Approval of a Series LLC filing in Nevada may take one to three weeks. If you need to receive approval more quickly, the Nevada secretary of state will expedite filing for an additional fee.
Can you be your own registered agent for a Nevada Series LLC?
You may serve as the registered agent for the parent or any unit in a Nevada Series LLC as long as you are at least 18 years of age and have a permanent street address in Nevada where you can be reached with mail and service of legal documents.
If you do not have a permanent street address or aren’t reliably present at that address, consider using a registered agent service. These companies serve as registered agents for Nevada businesses. Fees for a registered agent service vary depending on which company you use.
Does a Series LLC need a business license in Nevada?
Yes. Nevada requires an LLC to file a Common Business Registration at the time of its creation (along with the Articles of Organization). The Common Business Registration serves as an application for any required business licenses and permits, including sales and use tax permits and local business licenses.
The Articles of Organization and Common Business Registration serve two different purposes. The Articles of Organization create the series LLC as a separate legal entity. The Common Business Registration applies for the permits and licenses that entity requires in order to do business in the state of Nevada.
Are a Series LLC and an LLC the same thing in Nevada?
Not quite. An LLC and a Series LLC are both examples of a “limited liability company.” However, an LLC is only one business entity. It has one set of members and directors and manages one set of assets. If the LLC is sued, all the assets it has are at risk.
Related: How to form a Nevada LLC
A Series LLC is several business entities. One, the “parent” LLC, oversees the others, the “unit” LLCs. Each unit LLC has its own tax number and manages its own assets, and the parent LLC may also have its own tax number and assets. If one unit LLC is sued, the assets in that unit are at risk – but the assets in the other units or the parent LLC may be protected.
Is a Series LLC the same as a corporation?
Both a Series LLC and a corporation are legal entities that exist to carry out certain business functions. Both operate to separate the assets of the business from the personal assets of the owners, directors, partners, managers, or shareholders.
However, a Series LLC and a corporation have different structures and different powers. For example, a Series LLC consists of one parent LLC and one or more separate unit LLCs, while a corporation is usually only a single business entity. Also, corporations are allowed to sell shares in their company to the public if they register with the appropriate government entities, such as the Securities and Exchange Commission (SEC). A Series LLC may not sell stock.