Nevada Administrative Code Chapter 86 - Limited-Liability Companies
Nevada Administrative Code (NAC)
Chapter 86 — Limited-Liability Companies (LLCs)
Overview:
Chapter 86 governs the formation, operation, and regulation of limited-liability companies (LLCs) in Nevada. LLCs are business entities that combine the liability protection of a corporation with the flexible management and tax treatment of a partnership. This chapter establishes rules for formation, governance, member rights, compliance, and dissolution, ensuring legal and regulatory compliance in Nevada.
1. Definitions and General Provisions (NAC 86.010 – NAC 86.050)
Key points:
Defines important terms:
Member: an owner of the LLC.
Manager: an individual responsible for managing the LLC if it is manager-managed.
Operating agreement: the document governing internal affairs of the LLC.
Clarifies that NAC Chapter 86 applies to all domestic LLCs registered in Nevada.
Establishes that LLCs must comply with both state law and administrative rules.
Why it matters:
Provides a framework for understanding the roles, responsibilities, and scope of LLC regulation in Nevada.
2. Formation of LLCs (NAC 86.060 – NAC 86.120)
Key points:
To form an LLC in Nevada, one must:
File Articles of Organization with the Nevada Secretary of State.
Specify the LLC’s name, registered agent, and business purpose.
Indicate whether the LLC is member-managed or manager-managed.
While not mandatory, it is highly recommended to draft an Operating Agreement that outlines:
Capital contributions.
Allocation of profits and losses.
Member and manager duties.
Why it matters:
Provides legal recognition for the LLC and protects members’ liability.
3. Amendments and Changes (NAC 86.130 – NAC 86.180)
Key points:
LLCs may amend Articles of Organization to reflect:
Changes in name, registered agent, or business address.
Addition or withdrawal of members or managers.
Change from member-managed to manager-managed structure.
Amendments must be filed with the Secretary of State to take legal effect.
Why it matters:
Keeps official records accurate and current, ensuring proper legal status and compliance.
4. Management and Member Rights (NAC 86.190 – NAC 86.250)
Key points:
LLCs may be either member-managed or manager-managed:
Member-managed: all members participate in day-to-day management.
Manager-managed: one or more managers handle operations; members typically do not.
Members and managers must act in good faith, with loyalty and care, toward the LLC.
Operating Agreements may define voting rights, profit allocation, and decision-making processes.
Why it matters:
Clarifies authority, accountability, and decision-making, reducing disputes among members.
5. Capital Contributions and Financial Matters (NAC 86.260 – NAC 86.310)
Key points:
Members contribute capital in cash, property, or services, as agreed in the Operating Agreement.
Profits and losses are allocated according to the Operating Agreement or statutory default rules.
LLCs must maintain accurate financial records for:
Capital accounts.
Distributions.
Tax reporting.
Members may inspect records if specified in the Operating Agreement.
Why it matters:
Ensures transparency, accountability, and fair treatment of members regarding financial interests.
6. Transfers of Membership Interests (NAC 86.320 – NAC 86.360)
Key points:
Members may transfer their membership interests subject to:
Approval of other members, if required in the Operating Agreement.
Restrictions to maintain management or professional requirements.
Proper documentation of transfers protects the rights of incoming and outgoing members.
Why it matters:
Maintains clarity and stability in ownership, avoiding disputes over profits, voting, and liability.
7. Dissolution and Winding Up (NAC 86.370 – NAC 86.420)
Key points:
LLCs may dissolve:
Voluntarily by agreement of members.
Upon expiration of a term or completion of a purpose.
By administrative or judicial action.
Winding up involves:
Settling debts and obligations.
Distributing remaining assets to members.
Filing Articles of Dissolution with the Secretary of State.
Why it matters:
Provides a lawful procedure to terminate the LLC, protecting creditors, members, and regulatory compliance.
8. Compliance and Penalties (NAC 86.430 – NAC 86.460)
Key points:
Failure to file required documents or comply with NAC may result in:
Administrative penalties.
Loss of good standing.
Personal liability for members or managers in certain cases.
LLCs must maintain a registered agent and update the Secretary of State on changes.
Why it matters:
Ensures LLCs operate legally and responsibly, protecting members and third parties.
✅ Summary of Key Rule Areas
| Rule Section | What It Regulates | Core Purpose |
|---|---|---|
| NAC 86.010–050 | Definitions and scope | Clarifies roles, responsibilities, and applicability |
| NAC 86.060–120 | Formation | Establishes legal creation of LLCs |
| NAC 86.130–180 | Amendments | Provides procedures for updating official records |
| NAC 86.190–250 | Management & member rights | Balances authority and accountability |
| NAC 86.260–310 | Capital & financial matters | Ensures transparency and proper allocations |
| NAC 86.320–360 | Membership transfers | Regulates ownership changes and consent |
| NAC 86.370–420 | Dissolution | Provides a lawful winding-up process |
| NAC 86.430–460 | Compliance & penalties | Enforces legal adherence and protection |
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