Q: Is it necessary to list all members of a Nevada LLC? How does one get that accomplished if we want the Nevada Secretary of State site to reflect all the members’ names?
Thank you to a client from Nevada for that great question! Nevada LLCs must list all managers or managing members of the LLC on their Articles of Organization. If you add new members to your LLC, you will need to update your membership information with the Nevada Secretary of State. The easiest way to report this change is on your annual report, called the Nevada Annual List. We’ll explain the steps you need to take when you add members to your Nevada LLC.
1. Consult your Nevada LLC operating agreement.
To add members to a Nevada LLC, you should first consult your operating agreement and follow your LLC’s internal policies for adding new members. In most cases, you will need the consent of all existing members to add a new member to your LLC.
What if I don’t have an operating agreement?
If your LLC doesn’t have an operating agreement, you will need to follow the default laws in the Nevada Limited Liability Company Act when adding new members to your LLC. However, we strongly recommend adopting an operating agreement for your LLC, since having a thorough operating agreement can help your company avoid legal disputes and lets you create your own policies for your business.
Check out our free Nevada LLC operating agreement templates.
2. Transfer membership interest.
Most of the time, when you add a member to your LLC, that member will make a financial contribution to the LLC and receive membership interest in return. However, your LLC operating agreement may allow for new members to join without making a financial contribution. The new member’s membership interest is typically transferred from another member, although in some cases membership interest can come from the company itself. Any member whose percentage of membership interest has changed should be issued a new LLC membership certificate.
Download our free LLC membership certificate template.
3. File the Nevada Annual List.
The most efficient way to update the Secretary of State on your new LLC members is by including this information on your annual report, which in Nevada is called the Annual List and State Business License Application. You’re required to file your annual list by the end of your LLC’s anniversary month every year, which costs $150, plus $200 for your business license renewal. All managers or managing members of your LLC need to be listed on your annual list. You can file your annual list up to ninety days before the due date.
Learn how to file your Nevada Annual List.
What is an LLC managing member?
LLCs can either be member-managed or manager-managed. In a member-managed LLC, all members take part in running the daily operations of the business. In a manager-managed LLC, managers hired by the LLC members run the business. Any LLC member who is involved in the daily operation of the LLC is considered a managing member.
Can I file an amendment to add members to my LLC?
You can. However, filing a Nevada LLC amendment costs $175, and since you will need to file an annual report anyway, it’s generally more cost-effective to update your LLC membership information when you file your annual report.
4. Amend your operating agreement.
Since your operating agreement lists all LLC members and their membership interest, you will need to update this information every time you add a member. Follow your operating agreement’s policy for how it can be amended.
Do I need to contact the IRS when I add a member to my LLC?
You only need to contact the IRS if adding a member to your LLC changes your business from a single-member LLC to a multi-member LLC, because these two business types have different tax classifications. Single-member LLCs are taxed as disregarded entities by default, whereas multi-member LLCs are taxed as partnerships by default. If your LLC changes its tax classification, you’ll need to file IRS Form 8832, Entity Classification Election.