Recently, the Nevada legislature increased the cost of doing business here in Nevada. Initial and annual lists (required annually) increased for every type of entity by $25. While this is may be the cost of a few cups of fancy coffee, the real heartburn is being felt by our clients who are organized as corporations. The state business license fee, formerly $200 for every type of entity, is now $500. That’s a considerable increase. What’s worse is probably 90% of our clients who are organized as corporations don’t need to be. LLCs provide the same liability protection as corporations, with more flexibility in how the IRS treats the company for tax purposes.
Not to worry, though. It is possible to change your entity type in Nevada, through a process called conversion. NRS 92A.105 provides the foundation for how a conversion can be accomplished. The filing fee is $350 and a plan of conversion has to be adopted by the entity’s powers that be, usually the Board of Directors.
While it’s certainly possible, it’s not a simple process. Not only does a plan of conversion need to be adopted and possibly attached to the documents filed with the Nevada Secretary of State, but you’ll want to ensure that the plan’s approval complies with the current entity’s bylaws or other governing documents.
For help with managing your business and converting your corporation to an LLC, give us a call at (702) 485-1200.