Your accountant has told you to open and hang your license in a professional corporation or a limited liability company to manage your earnings.  Here’s how you do it…. 

As you know a salesperson is allowed to place their real estate license within a professional corporation or limited liability company pursuant to Nevada law while hanging it with your brokerage.  However, the name of the entity must be the same as that name in which your license is issued.  Did you follow that?  If the name on your license is Robert Smith but you go by Bobby, your entity will be named “Robert Smith, LLC”  Robert Smith, in case you didn’t know was a fabulous point guard for the UNLV runnin’ Rebels in the 70s, who scored an average equivalent to current point guards, before there was a three point rule.  Exactly.   

Remember, opening an entity and holding your license in the entity does not change your relationship with your Broker, Prudential, Americana Group, REALTORS.  The purpose is linked to tax consequences and is the result of you having already met with your legal/tax consultant.  As to liability, remember……you are in a priviledged employ and you cannot escape liability by hanging your license within your entity. 

 Let’s put the entity together: 

Limited Liability Company.   

Click —————–>>>>>HERE   for the form you must fill out. 

You may hang your license in a limited liability company if you are the sole member per NRS 645.387. [i]   

First you need to “Organize” the LLC. 

If you have any questions on what goes where, or are not comfortable filling this out on your own, you should consult with an attorney of your choice.  This information provided herein is a repeat of what is available on the Nevada Secretary of State Web Site.  This initial document is a pdf document that you can fill out right on line.  You (and your spouse) are the only possible Members.  You are either a Member Manager or a Manager.  The address is where you are going to keep the records of the entity.  As the only unit holder (sharing ratio holder) in the entity (other than potentially your spouse) you are 100% in control.  You also need a ‘resident agent’ this is the person that will ‘accept service’ for your entity, this can be you, or a company/person you hire/elect. You print that document and attach a check for $75.00 and mail it to Nevada Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201.  In a few days you are going to get a document in the mail, “initial list of officers.”  You fill this out, indicating that you are either the Manager or Member Manager, sign it, have your resident agent sign it (this can be you) and mail it back to the Nevada Secretary of State along with a check for $125.00.  Click —————–>>>>>HERE to see what the Annual List form looks like. Each year you must fill out and send this document to the Nevada Secretary of State (you will get one in the mail).

Professional Corporation:  

Click ————> HERE  to see the form you fill out.

You may hang your license in a professional corporation if you are the sole stock holder per NRS 645.387. [ii]   First you need to “Incorporate your Professional Corporation”. 

If you have any questions on what goes where, or are not comfortable filling this out on your own, you should consult with an attorney of your choice.  This information provided herein is a repeat of what is available on the Nevada Secretary of State Web Site.  This initial document is a pdf document that you can fill out right on line.   You can be the President, Secretary and Treasurer.  The address is where you are going to keep the records of the entity.  And remember, the name of the PC is your name with either YOUR NAME, “the words “Professional Corporation” or the abbreviation “Prof. Corp.,” “P.C.” or “PC,” or the word “Chartered” or the abbreviation “Chtd.,” or “Limited” or the abbreviation “Ltd.” [iii]   You (and your spouse) are the only possible stock holders.  In Nevada you can be each Officer and each Director.  As the only stock holder in the entity (other than your spouse) you are 100% control.   You also need a ‘resident agent’ –  this is the person that will ‘accept service’ for your entity, this can be you, or a company/person you hire/elect. YOU MUST ATTACH a copy of your Nevada Real Estate License to this application.  As a professional corporation, you must have a proffession.  Yours is that of NRS 645 a real estate licensee.  You print the PDF document after you have filled it out, sign it, have your resident agent sign it (this can be you) and attach a check for $75.00 and a copy of your license and mail it to Nevada Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201.  In a few days you are going to get a document in the mail, “Initial List of Officers and Directors – Profit Corporation.”  Another easy one, you fill this out, with you as the manager, and mail it back to the Nevada Secretary of State along with a check for $125.00.  Click ——————> HERE to see what the annual Form looks like. 

 

THEREAFTER: 

So, now you have your new entity.  This is a valid, legal company.  This entity can contract and obligate itself and be sued.  You need to treat this entity with respect.  You must not mix this entitiy’s monies with your money.  You should open its own bank account and ensure that it only pays expenses for which it is reposnbile.  You must file a tax return for this entity each year until it is closed.  If it is a corporation the annual due date for a tax return is February 15 NOT April 15.  You need to take five (5) more steps. 

1.)    ORDER an Employer Identification Number.  This is a social security number for companies:  the form is found at http://www.irs.gov/pub/irs-pdf/fss4.pdf. Don’t worry about how difficult this form looks. Fill it out, you can do it.  The IRS does not turn away customers.  If you make an error, they will contact you and ask you some questions.  They love new friends.  It’s like going to a new local Italian restaurant, warm and inviting.

2.)    GO to the Nevada Real Estate Division. at 2501 East Sahara Avenue, Ste. 102,  Las Vegas, Nevada 89104-4137 and bring your FILED articles showing the creation of your new entity and change your name of your real estate license to your new entity.

3.)    Contact Brokerage and Accounting.  Show you new license, your NEW EIN and inform them that you want all commissions paid to your new EIN and new name.

4.)   Nevada Business License.  You need to open a Nevada Business License for this entity (AND FILE AN ANNUAL NEVADA TAX RETURN).  You already have a Nevada Business License as a Nevada Real Estate Agent under NRS 645.  You can transfer this license from your name to the your entity’s new name.

5.) If you would like you can file a ‘fictitious firm name’ which would allow the Robert Smith, LLC to do business as only Robert Smith.  Clck ——————–> HERE for the form. 

Now, be good to your shareholders………. 


[i], [ii] http://www.leg.state.nv.us/NRs/NRS-645.html#NRS645Sec387

NRS 645.387  Issuance of license as broker-salesman or salesman to sole shareholder of corporation on behalf of corporation or to manager of limited-liability company on behalf of company; restrictions; duties; expiration.

      1.  Any natural person who meets the qualifications of a real estate broker-salesman or salesman and:

      (a) Except as otherwise provided in subsection 2, is the sole shareholder of a corporation organized pursuant to the provisions of chapter 89 of NRS; or

      (b) Is the manager of a limited-liability company organized pursuant to the provisions of chapter 86 of NRS,

Ê may be licensed on behalf of the corporation or limited-liability company for the purpose of associating with a licensed real estate broker in the capacity of a broker-salesman or salesman.

      2.  The spouse of the owner of the corporation who has a community interest in any shares of the corporation shall not be deemed a second shareholder of the corporation for the purposes of paragraph (a) of subsection 1, if the spouse does not vote any of those shares.

      3.  A license issued pursuant to this section entitles only the sole shareholder of the corporation or the manager of the limited-liability company to act as a broker-salesman or salesman, and only as an officer or agent of the corporation or limited-liability company and not on his own behalf. The licensee shall not do or deal in any act, acts or transactions included within the definition of a real estate broker in NRS 645.030, except as that activity is permitted pursuant to this chapter to licensed broker-salesmen and salesmen.

      4.  The corporation or limited-liability company shall, within 30 days after a license is issued on its behalf pursuant to this section and within 30 days after any change in its ownership, file an affidavit with the Division stating:

      (a) For a corporation, the number of issued and outstanding shares of the corporation and the names of all persons to whom the shares have been issued.

      (b) For a limited-liability company, the names of members who have an interest in the company.

      5.  A license issued pursuant to this section automatically expires upon:

      (a) The death of the licensed shareholder in the corporation or the manager of the limited-liability company.

      (b) The issuance of shares in the corporation to more than one person other than the spouse.

      6.  Nothing in this section alters any of the rights, duties or liabilities which otherwise arise in the legal relationship between a real estate broker, broker-salesman or salesman and a person who deals with him.

      (Added to NRS by 1981, 513; A 1997, 169)

[iii] http://www.leg.state.nv.us/NRs/NRS-089.html#NRS089

      2.  The corporate name of a professional corporation must contain the words “Professional Corporation” or the abbreviation “Prof. Corp.,” “P.C.” or “PC,” or the word “Chartered” or the abbreviation “Chtd.,” or “Limited” or the abbreviation “Ltd.” The corporate name must contain the last name of one or more of its current or former stockholders. The corporation may render professional services and exercise its authorized powers under a fictitious name if the corporation has first registered the name in the manner required by chapter 602 of NRS.


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