Thinking of forming an LLC in Nevada?
While Nevada offers powerful benefits like privacy and no state income tax, many entrepreneurs make costly mistakes during the formation process. These mistakes can expose their personal assets, cause compliance issues or even lead to tax penalties in their home state.
In this article, we’ll walk you through the top three mistakes to avoid when forming an LLC in Nevada, including commingling business and personal finances, neglecting annual report filings and misunderstanding how taxes work if you're operating outside the state. Avoiding these missteps could save you thousands and protect your business from unnecessary legal risk.
What are the top three mistakes people make when forming an LLC in Nevada?
Mistake #1: Making Your LLC Member-Managed
We see this all the time. If you want to hide ownership, which is one of the benefits of having an LLC, then you do not make it member managed because then it literally shows the member, which is the owner when you’re talking about an LLC. So, don’t click the box managing member, because then you’re going to tell the world that you’re the owner.
Mistake #2: Naming Yourself as the Registered Agent
This also happens frequently. As litigation attorneys, when we’re preparing to sue someone, we check the Secretary of State’s website to identify the registered agent so we can serve them. If the business is member-managed and the owner is also listed as their own registered agent, that signals to us that this person likely doesn’t have legal or financial backing — which increases the likelihood of success in litigation.
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There are many reasons not to name yourself as your own registered agent:
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Professionalism: Registered agent services and attorneys are available for this role, and having one signals legitimacy.
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Legal strategy: If the agent is a law firm, we often call them before serving papers to explore settlement or resolution.
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Service risks: If you live in a gated community and are your own agent, someone can legally serve the gate guard. If that guard doesn’t notify you, service is still valid—and you could end up with a default judgment without ever knowing you were sued.
If you’re investing time and money to set up an LLC, we strongly recommend using a professional registered agent — preferably an attorney who can act as your first line of defense.
Mistake #3: Forming a Standard LLC When You Need a Series LLC
You need a series LLC, but you already formed a regular LLC. A series LLC is something that they offer in Nevada and some other states, that is very business friendly. A series LLC essentially creates a master LLC, and then you can create sub little series LLCs under the master LLC instead of creating a whole new LLC for each business or property or whatever it is that you own.
Let’s say you're a real estate investor with 10 rental properties. Without a Series LLC, you’d need to form 10 separate LLCs, each with its own $350 annual renewal fee. That’s $3,500 a year in fees alone.
With a Series LLC, you pay just one $350 annual fee to the Nevada Secretary of State, and each property is held in its own series under the master LLC. Each series maintains separate bank accounts and asset protection, just like a stand-alone LLC.
Real-World Example
A client recently came to us with a business in Summerlin and plans to open a second location in Henderson. He assumed he needed to form a new LLC. I explained that a Series LLC would allow him to create one series for each location — under a single master entity.
He then asked if he could convert his existing LLC into a Series LLC. Unfortunately, the answer is no. You cannot convert a traditional LLC into a Series LLC. You’d need to dissolve the original LLC and form a new Series LLC from scratch.
That’s why planning ahead is critical. If you think you’ll expand, own multiple assets, or operate in more than one location, it’s better to start with a Series LLC than to discover too late that your structure won’t scale.
TL;DR: Avoid mistakes by working with the experts
These are the top three mistakes we regularly see from clients who formed their LLCs without guidance, or who are just starting the process. If you’re forming an LLC in Nevada and want to get it right the first time, we can help.
Call Ocampo Wiseman Law at (702) 850-7798 to schedule a complimentary 15-minute phone consultation, or click here to book online. We’ll help you form your LLC strategically, so you stay protected and set up for long-term success.
