How to Form a Professional Corporation in Nevada (2024 Guide)

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
Last updated: 
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Forming a Professional Corporation in Nevada

If you would like to start and learn how to form a corporation in Nevada, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in Nevada are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in Nevada or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

What is a Professional Corporation in Nevada?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the Nevada. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in Nevada, if you changed your mind.

WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in Nevada

To form a Professional Corporation in Nevada for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Nevada, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in Nevada

After you have decided to form a professional corporation in Nevada, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In Nevada, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 90 days. You must file a name reservation application in the Nevada Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for Nevada DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the Nevada Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Nevada. Forming a professional corporation for your service will be easier if you have Registered Agent in Nevada.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in Nevada, a Registered Agent costs is ranging from $50 – $300. To make it easier, you can hire Nevada Registered Agent Services for your professional corporation.

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Step 4: File the Articles of Incorporation in Nevada

After you hire a Registered Agent to form a professional corporation, the next step is to file the Nevada Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Articles of Incorporation in Nevada may be done with four methods that are online, fax, by mail and in-person. The Articles of Incorporation fee may vary from different state. However, in Nevada, it costs $75 for filing online, fax, in person and by mail. Create an account/Log in to the SOS site, get the online form, fill it, and submit online. For offline filing, Send the form by mail or drop it off in person at Secretary of State, Commercial Recordings Division, 202 N. Carson St., Carson City, NV 89701-4201, or fax it to (775) 684-5725..

Step 5: Write an Operating Agreement in Nevada

An operating agreement in Nevada is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in Nevada

The next step is to form the first board of directors for your PC in Nevada. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the Nevada Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In Nevada, you must have Three directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with Nevada Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in Nevada.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in Nevada. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

The application of an EIN in Nevada can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in Nevada for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in Nevada easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in Nevada

Before your professional corporation operates in Nevada, you must have Nevada Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in Nevada ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in Nevada

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the Nevada tax classification for the taxes that an LLC in Nevada must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in Nevada.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • Nevada Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in Nevada

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Annual Report in Nevada

In Nevada, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Annual Report. Also, it should include all of your yearly financial activity. You must submit the report every 1 year (end of the anniversary month) in the Nevada Secretary of State.

FAQs

What is a professional corporation in Nevada?
A professional corporation is a business entity organized for the purpose of providing professional services in Nevada.
Why choose a professional corporation over other business structures in Nevada?
A professional corporation offers limited liability protection, but also allows professionals to run and manage the corporation independently in Nevada.
What professions are allowed to form a professional corporation in Nevada?
In Nevada, professionals licensed by the state may form a professional corporation. This includes accountants, attorneys, chiropractors, dentists, architects, engineers, and veterinarians, among others.
Who can own a professional corporation in Nevada?
Owners of a professional corporation in Nevada must be licensed professionals in the same field as the corporation engages in. Non-professionals are restricted from ownership.
What is the advantage of forming a professional corporation in Nevada?
One of the biggest advantages of forming a professional corporation in Nevada is that it provides limited liability protection for the owners.
Is forming a professional corporation the same as forming an LLC in Nevada?
No, they are two different business structures in Nevada. A professional corporation is geared specifically toward licensed professionals and has certain restrictions nonprofessional corporations do not have.
Does forming a PC in Nevada guarantee liability protection to my personal assets?
Yes, owners of a professional corporation have limited liability protection in Nevada.
What is a name reservation in Nevada and how does it benefit a newly formed PC?
A name reservation is a practice that holds a name for a business for a certain period of time while the entity gets organized in Nevada.
Do the professional standards of the profession impact how the PC operates in Nevada?
Yes. You must comply with the professional standards and codes of your license profession in Nevada.
What licensing certifications does Nevada require when forming a PC?
There is no specific licensing requirement needed when starting a professional corporation in Nevada. However, you must be a licensed professional in your specific profession/license appropriate regulations.
What kind of tax advantages does a professional corporation offer in Nevada?
In Nevada, there are multiple tax advantages. A professional corporation may be able to take advantage of tax deductions and write-offs not normally available to non-professional corporations.
How is a PC different from a general partnership in Nevada?
The main difference is limited exposure to personal liability in a professional corporation. Unlike a general partnership, a professional corporation offers limited liability protection to owners in Nevada.
Can an S corp be a PC in Nevada?
Yes, any corporation structured as an S-corp in Nevada has pass-through taxation, which avoids double taxation for shareholders and provides a tax advantage.
What filing requirements must be met for a newly formed PC in Nevada?
At minimum, you must file Articles of Incorporation, holder meetings record, bylaws adoption document in compliance with Nevada Department of Busines & Industry guidelines.
What if two professional corporations with the same name exist in Nevada?
It is not allowed. Each professional corporation must have a unique name in Nevada.
What happens to the commercial license of a professional when the PC is formed in their name?
Professional regulations for certain professions in Nevada may set guidelines around this issue. In some cases, it is helpful to have the permit connected with the California corporation as a result leading.
Can I make decisions in Nevada as a solo PC owner?
There aren’t specific requirements dictating who can make decisions on behalf of a professional corporation in Nevada. The founders will normally be responsible for making decisions.
When is the right time to convert a PC in Nevada to an LLC?
If the PC no longer requires the limited liability protection for owners, taxpayers or other key individuals, transformations from corporation to LLC’s entity could be useful in Nevada.
Does Nevada have any additional special laws for professional corporations first deposits?
No, Nevada doesn’t have any restrictions in terms of funding or shares distribution for professional corporations.
How do taxes work for a professional in a newly formed PC in Nevada?
A professional corporation in Nevada may not offer the best tax advantages depending on the corporation’s structure regime and hold permitted ownership structure but other entities have more solid tax structure which can be adapted.
Does state unemployment insurance work the same for PC employees in Nevada?
Unemployment insurance does not differ for PC employees, despite limited exposure to personal liability by the owner in Nevada.
Is profit sharing the same for partners in a PC in comparison to other corporations in Nevada?
The partnership allocations have to be reported by professional corporations via usual provisions detailed by the corporate bylaws in Nevada.
Can Nevada PC owners also be employees?
Yes. Owners of a professional corporation may also be employees.
Is forming a PC in Nevada costly?
The cost to form a professional corporation in Nevada is similar to other business entities.
Are business earnings double taxed in Nevada PC ownership?
Not if you are in compliance with being taxed as an S-corp, contrary to C-corp for which standard system corporations use ‘double-tax’ structure.
What are the annual filing requirements for Nevada PC owners?
Nevada corporations must file an Annual List of Officers and Directors with the Secretary of State.
Can a PC acquire a different business in Nevada?
Yes, a professional corporation can acquire and join other-related businesses as shareholders controlled by similar regulations.
How long does it generally take to form a PC in Nevada?
It typically takes Nevada USCIS close to one and two business days after the articles of incorporation have been processed aided by advisors.
Can one licensed professional form a PC alone in Nevada?
Yes. In certain circumstances in Nevada, one licensed professional can launch a professional corporation on their own to be a single owner-operative.
What is the process for forming a professional corporation in Nevada?
The process for forming a professional corporation in Nevada involves filing Articles of Incorporation with the Nevada Secretary of State, obtaining any necessary state licenses, and registering with any relevant professional regulatory boards.
How much does it cost to form a professional corporation in Nevada?
The cost of forming a professional corporation in Nevada includes filing fees with the state, legal fees, and other expenses, and can range from a few hundred dollars to over a thousand dollars.
What are the benefits of forming a professional corporation in Nevada?
The benefits of forming a professional corporation in Nevada include liability protection, tax advantages, and the ability to operate as a business entity separate from the individual professional’s personal assets.
What are the qualifications for forming a professional corporation in Nevada?
The qualifications for forming a professional corporation in Nevada may vary depending on the professional and the industry, but generally require the professional to be licensed in their field and to follow any relevant state and federal regulatory laws.
Can a professional corporation in Nevada be owned by a non-professional?
In Nevada, a professional corporation must be owned by licensed individuals in the profession, and may not be owned by non-licensed individuals.
What is the difference between a professional corporation and a regular corporation in Nevada?
The main difference between a professional corporation and a regular corporation in Nevada is that the former is reserved for licensed professionals and is subject to different regulatory requirements.
How long does it take to form a professional corporation in Nevada?
The timing for forming a professional corporation in Nevada can vary, but generally takes several weeks to a few months depending on how quickly filings are processed and any regulatory requirements are met.
What is the maximum number of shareholders allowed in a professional corporation in Nevada?
Nevada law does not place any specific limit on the number of shareholders a professional corporation can have.
Can a professional corporation in Nevada offer shares to the public?
Professional corporations are typically prohibited from offering shares to the public under Nevada law.
Does forming a professional corporation protect me personally in Nevada?
Forming a professional corporation in Nevada can offer liability protection by separating your business finances and assets from your personal ones.
Do I need a lawyer to form a professional corporation in Nevada?
While it is not strictly required to hire a lawyer to form a professional corporation in Nevada, working with a lawyer can provide important legal guidance and help ensure that the process is completed accurately and in compliance with relevant laws.
Are there annual filing requirements for a professional corporation in Nevada?
Yes, a professional corporation must file an annual report with the Nevada Secretary of State.
Can a professional corporation in Nevada operate in other states?
In order to operate in other states, a professional corporation must register with each state in which it plans to do business.
What types of professions typically use professional corporations in Nevada?
A few examples of professions frequently seen in professional corporations in Nevada include doctors, lawyers, accountants, and architects.
What are the minimum and maximum stock values in a professional corporation in Nevada?
There is no specific minimum or maximum stock value for a professional corporation in Nevada, but it must adhere to any state laws regulating corporate stock.
Are there any tax advantages to forming a professional corporation in Nevada?
Yes, a professional corporation in Nevada may be eligible for certain tax deductions and benefits.
Can a professional corporation in Nevada operate under a DBA (Doing Business As)?
Yes, a professional corporation may operate under a DBA in Nevada, provided that the filing and registration requirements for the name are met.
Are there any restrictions on who can serve on the board of directors for a Nevada professional corporation?
Nevada law does not impose any specific restrictions on who can be a director of a professional corporation, but certain professional regulatory bodies may have additional requirements or limitations.
Does forming a professional corporation limit my personal liability in Nevada?
Yes, a professional corporation in Nevada can provide important liability protection by separating business and personal finances and assets.
Can a professional corporation in Nevada enter into contracts?
Yes, a professional corporation in Nevada can enter into contracts, sign agreements, and otherwise operate as a business entity.
Can I form a professional corporation in Nevada with more than one profession?
Professional corporations in Nevada are generally limited to one profession.
Do professional corporations in Nevada need to follow any special tax rules?
Professional corporations may be subject to unique taxation laws or benefits in Nevada, so it is important to work with a qualified tax professional to ensure compliance.
Can professional corporations in Nevada be owned by a trust or estate?
In theory, a trust or estate could own shares of stock in a professional corporation if the owner of the trust or estate was a licensed professional in the field.
Can I convert an existing business to a professional corporation in Nevada?
Yes, it is possible to convert an existing business to a professional corporation in Nevada, though the process can be complex and requires additional steps beyond simple incorporation.
Do I need to obtain any special permits or licenses to form a professional corporation in Nevada?
In addition to any relevant professional licenses, a professional corporation in Nevada may need additional permits or licenses depending on the specific industry and location of the business.
Can I change the name of my professional corporation in Nevada?
Yes, you can change the name of your professional corporation in Nevada, though it requires a specific legal process and may take a few weeks to complete.
Can a professional corporation in Nevada seek funding from investors or venture capitalists?
Professional corporations generally cannot obtain funding from investors or venture capitalists under Nevada law.

Also Read

How to Save Money While Forming Nevada Professional Corporation

One of the primary steps to consider when trying to save money is to conduct thorough research and self-education. By understanding the process and legal requirements oneself, professionals can limit the need for expensive legal assistance. While seeking advice from experts is vital, potential business owners should familiarize themselves with the literature available online and understand the specific steps and documents necessary to establish and dissolve a professional corporation in Nevada.

Another way to save money during the formation of a professional corporation is to be prudent when choosing service providers. When it comes to legal and accounting services, it is easy to be enticed by big names and commercial firms. However, opting for smaller-scale, local professionals can be significantly more cost-effective. These professionals often have more flexible pricing structures that cater to the needs and budget of a newer business. Building relationships with local experts can also bring long-term financial benefits, as familiarity with one’s business could potentially result in personalized advice and tailored services.

Furthermore, leveraging technology can greatly reduce costs throughout the formation process. Utilizing digital applications and online platforms designed for business formation, entrepreneurs can save substantial amounts of money. These technologies allow for the completion and submission of documents remotely, eliminating the need for physical delivery and reducing expenses related to postage, long-distance calls, and transportation. Additionally, utilizing virtual meeting applications can minimize travel expenses when consultations with legal and accounting professionals are necessary.

Considering various options and structuring the initial investments wisely is also key to saving money during the formation process. Professional corporations often require licenses and specialized equipment, which can quickly deplete financial resources. Prioritizing and rationalizing these expenses is fundamental. Investing in essential equipment and licenses from the beginning is crucial to ensuring smooth operations; however, it is equally important to be mindful of the balance between quality and necessary expenditure. Comparing prices and negotiating contracts are strategies that can help save money without compromising the quality of tools and services acquired.

Lastly, proper financial planning and budgeting are crucial components of saving money throughout the formation of a Nevada professional corporation. Having a comprehensive understanding of projected costs and anticipating potential risks can help set realistic financial targets and avoid unexpected expenses. By carefully outlining both short-term and long-term financial objectives, entrepreneurs can effectively allocate budgets and implement cost-cutting strategies where required.

In conclusion, while forming a Nevada professional corporation involves financial investment, there are numerous ways to save money during the process. Thorough research, careful selection of service providers, leveraging technology, wise and efficient allocation of investment, and prudent financial planning are all effective strategies to minimize costs without sacrificing on the quality or legal compliance of newly-formed businesses. By following these principles, entrepreneurs can build a solid foundation without the burden of unnecessary expenditure, ultimately contributing to the success and profitability of their Nevada professional corporation.

Conclusion

In conclusion, forming a professional corporation in Nevada is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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