Saving Money with an Out-of-State Entity? Maybe Not.

I recently met with a client who had formed a Wyoming LLC because it appeared that he would save a few bucks on fees.   He lives and works in Nevada and has no other connection to Wyoming other than the LLC he formed.  I asked him if he was aware of and complying with the law (NRS 86.543) that requires him to register in Nevada as a foreign entity.  He said no.  I told him that even if the LLC was formed in Wyoming, if he’s transacting business in Nevada, he has to register that entity with the Nevada Secretary of State as a foreign entity.  Same with corporations.

As it turns out, if you are doing business in Nevada under an LLC formed in another state, you have to file initial and annual lists of members, just as you would with a Nevada LLC.  Moreover, you would need a local business license, which you can’t apply for without having a NV tax ID number and a state business license.  The only thing you don’t have to do in Nevada that you did to form that out-of-state entity is file Articles of Organization.  Basically, you have to pay the same fees to two different states.

Therefore, forming an out-of-state entity when you’re actually doing business in Nevada may double your fees.

With regard to corporations, NRS 80.190 requires foreign corporations doing business in Nevada to publish, not later than March of each year, a statement in two issues of a newspaper with a circulation of at least 1,000.  The statement must contain the name of the corporation, the name and title of the officer submitting the statement, and the mailing addresses for the corporation’s main office and office in the state.  Failure to do so can result in a fine of $100 per month the statement is not published.