STARTING A BUSINESS IN NEVADA
Incorporating a business in the state of Nevada has been popular for years because of the many economic benefits the state offers to businesses. For instance, Nevada does has no corporate income tax, no taxes on corporate shares, no franchise tax, no equity transfer tax and no personal income tax. Nevada's very aggressive approach to asset protection and privacy legislation are just a few of the reasons why so many small business owners flock to Nevada when they are starting a business. Additionally, you do not need to be presently residing in the state to start doing business here.
1. Choose a name for your business.
It's important to select a business name that relates to your message, product or service in order to not confuse your audience. It's also of key importance that your business can easily be located by potential customers. The first steps will be ensuring that the name you want to use is not already taken or being used in the jurisdiction where your business will be located. The last thing you want is for your clients to inadvertently end up with someone else because your business name is confusingly similar to theirs. You not only want to confirm business names registered at the state and local level, but also check federal trademark registrations as well. Failing to adequately ensure you are not infringing on someone else's protected name could result in you having to change your name down the line and potentially having to pay a portion of your profits to the person who originally registered and has rights to the name.
2. Select an entity structure for your business.
Various business structures offer differing benefits and choosing the best one for you should be based off of many factors after careful consideration has been made. Factors for determining what options are most suitable for your business will depend on start up costs available, the risks associated in the businesses everyday operations, whether or not business will be carried out with others, and desired tax structure. It is key to meet with an attorney and tax advisor at the onset of forming a business to be sure that you fully understand the options available to you.
Sole Proprietor& General Partnerships
No liability protection, and owner(s) is/are personally liable for all of the business debts; Owners can reside out of the State, Personal assets, such as your home or cash, can be seized to settle business debts; Income from the business passes through to your personal income,
Corporation
Directors must be 18 years or older; Directors may reside out of state; Director names and addresses do not have to be listed in the Articles of Incorporation; Must establish and follow corporate guidelines; Corporate taxes are paid
LLC
Members/managers must be 18 years or older
Members/managers may reside out of state
Member/manager names and addresses must be listed in the Articles of Organization; Need to have proper Operating Agreement to shield from liability; Various tax options
3. File your incorporation paperwork.
Articles of Incorporation for corporations or Articles of Organization for LLCs need to be filed with the Nevada Secretary of State.
Businesses are required to file List of Officers/Directors and Business License at the time of filing its Articles of Incorporation and every year thereafter to remain in good standing.
Businesses must designate a registered agent to receive service of process and other important information on their behalf (must be physically located in the state)..
Filing Fees
$150 Annual List of Officers
$75+ Articles of Incorporation
$200+ Business License
4. Prepare proper business agreements.
One of the most important things to do at the onset of starting a buisness is establishing the legal aspects of you business and its owners. This is done through preparing legally binding documents also known as business agreements. Depending on the type of structure that you choose, the documents that you need may vary. One thing many people do not realize is that not having a proper Operating Agreement for an LLC can subject you to being liable for the businesses actions and debts. Additionally, Partnerships will need similar documents establishing the relationship between various owners and lay out what powers each partner has. Corporations and Nonprofits must have bylaws and other required documentation to operate. These documents will save you thousands of dollars down the road and should be prepared and reviewed annually by a licensed attorney.
5. Obtain any required business licenses/permits.
In addition to fulfilling the business license registration requirement with the State, other permits and/or business licenses may be necessary at the local level.
Each business must determine which other regulatory obligations and registrations are required for their particular category of business.
6. Open a bank account for your business.
Keeping your business' finances separate from your personal accounts is not only practical, but is required to show that you are keeping the assets of your business separate from your personal fund when operating an entity other than a sole proprietorship. This is vital in order to not be found liable for the business debts and legal obligations.
To apply this practice early on, open a bank account for your business transactions. You will first need to obtain a Federal Employer Identification Number (EIN) through the IRS to complete the process.
Remember, even if you are not a Nevada resident, you can still incorporate your business here. If you are operating in another state, you will need to register your business in the state where you are transacting business and apply in other jurisdictions with a foreign registration.
Schedule a consultation to learn more about starting your home based business, online business or Nevada based business today!
What is a Trademark and Why do I need one?
A trademark is essentially a brand that identifies your product. It represents the quality and uniqueness of a brand and helps the general public identify the maker and association particular goods and services with your business. For example, Apple has a tremendous reputation with consumers with its trademark which is used on various electronics such as personal computers, iPad iPhone and many accessories. Protecting a trademark or potential trademark through federal registration ensures that the product and its associated reputation are protected and recognized across the the globe. A trademark can be a word or phrase, a logo, or even a sound or a color. Continued use of the mark is required along with renewal in order to prevent another person from being able to establish rights to it. Similarly, a Service Mark is used for identifying the source of a particular service instead of goods.
What is a "Common Law" Trademark?
The term "common law" identifies the trademark rights developed through use, but those which are not governed by statute. Instead, common law trademark rights are those that have been developed under a set of judicial rights governed by state law. Common law rights can be offered to any word, phrase, image, etc. that a business uses in commerce to identify itself, its goods, or its services. Such rights are granted automatically upon use and extended to whoever can prove the first actual use of the mark in a given geographical area. Each state has it's own process for allowing state trademark registration. This option is typically used in conjunction with Federal registration. However, those only planning to maintain business in a local brick and mortar establishment may find state registration sufficient for their particular business.
Why should I get my trademark Federally Registered?
Federal registration, a system created by federal statute, is not required to establish common law rights in a mark, nor is it required to begin use of a mark. However, federal registration, if available, is almost always recommended and gives a trademark owner a wide variety of additional rights not typically available under common law.
Many companies, particularly those operating exclusively on a local level, may not feel they do not need to obtain federal registration of their potential trademarks. These companies might be comfortable relying on state trademarks laws and common law protections. However, with the platform of business constantly advancing, it is common for even the smallest and most local of businesses to find themselves in situations where they must offer their products and services online, such as we seen with the COVID 19 pandemic. This changes their target audience from local to a national and international marketplace because of the Internet's wide reach. Online, common law protections are not often sufficient to protect a brand from predatory competitors.
Given these conditions, one of the most significant reasons to file for federal trademark registration is to ensure the highest degree of protection is available to you. By federally registering a mark, the owner of that mark is given preferential and priority treatment in any dispute before court or administrative agencies such as with the United States Patent and Trademark Office (USPTO) and the Internet Corporation for Assigning Names and Numbers (ICANN). Thus, by registering your mark, you are not only protecting your brand from others who may try to use or tarnish your brand’s goodwill, but you are also restricting others from being able to use that as their domain name.
The most important reason for registering a mark with the USPTO is to notice both consumers and potential competitors that your mark is federally protected. Once registered, you are allowed to designate your mark with a registered trademark symbol (®) to indicate that the mark is, in fact, a registered trademark. This will grant you the right to seek legal action against any person or business who attempts to infringe on your mark. This can allow you to recover profits that they obtained as well as other monetary damages for putting your company brand in jeopardy.
Individuals and businesses should obtain federal registration for the brands that they contribute their hard earned time, energy and money to create.
Schedule a consultation to discuss ways to protect your brand through a registered trademark today!
A Video Explanation from the U.S. Trademark Office
The USPTO has created a brief 11 minute video to explain the importance of getting a trademark registration, how registered trademarks differ from common law trademarks, and an overview of the process. The video can be found here:
WILLS AND ADVANCED DIRECTIVES
While no one wants to think about becoming severely sick or injured, life can be unpredictable, especially during times like we are faced with now. That’s why you should contact us to set up you medical and financial Advance Directives today while you’re in good health.
Do you have dependents, family, or financial responsibilities? Consider how they will be cared for when you're gone. Making these decisions in advance ensures your final wishes are honored.
These legal documents give you peace of mind that your medical and financial wishes will be carried out, even if you can’t speak for yourself. Decide who you want to act on your behalf and what you do and do not want done in the event you are extremely ill or incapacitated. Preparing you living will and last will in testament now will be much less costly than what your loved ones will have to spend later. Without establishing your wishes, the courts will be left to decide your family inheritance, and the ways in which your home, and other valuables are divided without guidance from you.
Document your specific wishes in a will and advanced directives today!
NEVADA'S CANNABIS COMPLIANCE BOARD LAUNCHES AND PREPARES FOR INAUGURAL MEETING
July 16, 2020
On July 1, 2020 the Nevada Cannabis Compliance Board (CCB) became fully authorized to take over regulation of the state’s cannabis industry. The CCB was created last year when Governor Steve Sisolak signed AB533. The regulatory body was noted as being one of the Governor’s top priorities during the 2019 legislative session. Governor Sisolak says the board will "play a vital role in both supporting the industry and holding it to the highest standard."
So far the Governor has appointed former Nevada Supreme Court Chief Justice Michael Douglas as chairman, along with former Gaming Control Board chairman and lawyer Dennis Neilander and local banker Jerrie Merritt to the five-member board. The two remaining positions will be filled by a medical professional and an individual with special knowledge and experience in the cannabis industry. The Cannabis Advisory Commission (CAC) will be chaired by CCB Executive Director Tyler Klimas, a Nevada Native and former lobbyist, along with seven additional members. The CAC will be tasked with making recommendations to the Board.
The Nevada Cannabis Compliance Board’s final Proposed Regulations are set for Consideration and Adoption on July 21, 2020 during the Board’s inaugural board meeting. The new board will be in charge of company site inspections; overseeing marijuana lab testing; auditing; tracking; vetting employees, owners, officers & board members; issuing agent cards and more.
The new proposed regulations are titled as follows:
- Issuance of Regulations; Construction; Definitions
- Cannabis Compliance Board: Organization and Administration
- Cannabis Advisory Commission: Organization and Administration
- Disciplinary and Other Proceedings Before the Board
- Licensing, Background Checks, and Registration Cards
- Distribution of Cannabis
- Cannabis Sales Facility
- Cannabis Cultivation Facility
- Production of Cannabis Products
- Minimum Good Manufacturing Practices for Cultivation and Preparation of Cannabis and Cannabis Products for Administration to Humans
- Cannabis Testing Facilities
- Packaging and Labeling of Cannabis Products
- Cannabis Distributors
- Workplace Requirements
These regulations can also be found posted on the Department of Taxation’s website here as well as on the CCB’s website here.
NEVADA'S CANNABIS COMPLIANCE BOARD SEEKING PUBLIC COMMENT ON PROPOSED REGULATIONS
June 5, 2020
Nevada Governor Steve Sisolak’s office has issued its proposed Regulations of the Cannabis Compliance Board (CCB) on May 29, 2020. They are currently seeking input from interested parties on proposed regulations 1-15 and are requesting that written comments be submitted via email to regulations@ccb.nv.gov including the name or the individual or entity comments are being submitted on behalf of. Submissions will be accepted until 5:00 p.m. PST on June 9, 2020.
The draft regulations can be found here.
The Cannabis Compliance Board was created by AB533, a measure sponsored by the Governor and approved by the Nevada State Legislature in 2019. The Board assumes all statutory authority to regulate cannabis in Nevada and consists of 5 members appointed by the governor for a 4 year term. Gov. Steve Sisolak has named former Supreme Court Justice Michael Douglas Chairman of the Cannabis Compliance Board along with former Gaming Control Board Chairman Dennis Neilander. Remaining appointments are still to come.
NEVADA CANNABIS INDUSTRY STAYING LEVEL HEADED AMIDST THE COVID PANDEMIC
April 3, 2020
While stocks have been dropping across nearly every industry, and while the strip casinos have all shut their doors, the cannabis business across Las Vegas has gone fairly unscathed. In addition to stocking up on groceries and cleaning products, residents are also heavily frequenting the local dispensaries, in what appears to be an attempt to combat the distress.
In an effort to comply with social distancing orders, companies are now more than ever employing delivery service, curb side pick-up and even drive through service. Some locations have seen upwards of 2000 drive through customers in a single day. "Licensed cannabis stores and medical dispensaries should only remain open if employees and consumers strictly adhere to the social distancing protocol," the Nevada Health Response Center issued in a statement, essentially giving the O.K. for local dispensaries to continue their operations.
On March 20, 2020, Governor Sisolak ordered the closure of all cannabis storefront operations. However, both recreational and medical cannabis are still available by delivery only. All licensed stores are now able to deliver and the state has enacted emergency rules to allow all licensed stores to deliver.
According to Nevada Taxation officials, the state currently has 38 dispensaries in operation providing delivery services. The Marijuana Enforcement Division (MED) issued a new temporary 60 day license procedure allowing dispensaries to deliver their own product.
NUANCES OF DEFENDING CASES INVOLVING TRANSPORTATION NETWORK COMPANIES
September 25, 2019
By: Kelsey Maxwell and Crislove Igeleke
USLAW Magazine
As ride shares become more prevalent, it follows that Transportation Network Companies (TNCs) will become an increasingly popular target for litigation. While liability issues may be clear-cut in a simple auto negligence matter, liability for TNCs becomes murky when drivers engage in separate misconduct such as driving under the influence or engaging in sexual assault. In most states, common defenses in these matters include (1) a lack of an employment relationship between the TNC and driver, (2) assertions that the driver's conduct is outside the scope of employment, and (3) assertions that TNCs cannot be held liable for negligent hiring or supervision if they did not, and reasonably should not have known about prior misconduct.
Drivers Are Independent Contractors
In California, while a corporation may be held vicariously liable as a principal for the torts of its agents, the converse is true that if an individual is deemed to be an independent contractor and not an agent or employee, vicarious liability will not attach. Typically in cases involving TNCs, California courts have held that the tortfeasor's employment status is a question of fact.
The factors a court uses to determine independent contractorship include (1) the right to control the work; (2) the alleged employee’s opportunity for profit or loss depending on his managerial skill; (3) the alleged employee’s investment in equipment or materials required for his task; (4) whether the service rendered requires a special skill; (5) the degree of permanence of the working relationship; and (6) whether the service rendered is an integral part of the alleged employer’s business. For TNCs, the important factors favoring an independent contractor designation include the fact that typically, drivers are paid per ride (as opposed to a salary), drivers provide their own vehicles and auto insurance, and drivers can choose their own hours and length of work. It is often highlighted as one of the perks to working for TNCs that drivers can be their own boss and make money on their own terms.
In a recent case involving a Grubhub driver who also worked for Lyft and Uber, the Ninth Circuit Court found that the factor of at will termination does not weigh in favor of an employment relationship because the right was mutual. In further support of a defense to the control argument, the Ninth Circuit held that a mutual termination provision with 30 days' notice and a one-year term was consistent with an independent contractor relationship because “the designated impermanency of the relationship supports a finding of independent contractor status.” That being said, California cases have cited factors such as the company controlling rates and routes, and imposing rules regarding the cleanliness of vehicles as well as prohibited contact with customers as indicative of an employee relationship.
Alternatively, in states such as Nevada, drivers for TNCs are classified as independent contractors working commercially when they carry paying passengers. As such, TNCs have a benefit from the outset that there is no employer/employee relationship presumed.
As various jurisdictions differ on this issue, TNCs should monitor case law across the country and weigh the options of adjusting policies to further support the position that the drivers are independent contractors in the states where the issue is a question of fact.
Driver's Conduct is Outside the Course and Scope of Employment Relationship
A second defense available to TNCs when a driver engages in misconduct, is the argument that the driver's tortious actions were outside the course and scope of the employment relationship. In determining whether an individual's actions were within the course and scope of his employment relationship, California courts have held that "respondeat superior liability does not attach simply because employment brought the employee and victim together at a certain time and place. The employee's activities must be inherent in, typical of or created by the work so that it is a foreseeable risk of the particular employment." Typically, whether the tort occurred within the scope of employment is a question of fact.
In cases of intoxicated drivers, factors to consider include whether the incident occurred during working hours and whether the alcohol consumption was done in a manner which benefited the employer. In the cases of sexual misconduct, factors to consider include whether the TNC app was in use at the time of the assault and whether the sexual assault is determined to be incidental to the operation of the business.
Transportation Network Companies Cannot Be Held Liable For Negligent Hiring Where a Driver Does Not Have a Known History of Misconduct
A third defense TNCs may rely on in cases of driver misconduct is the defense that the company should not be liable for negligent hiring where there is no known history of misconduct. For example, in California in the Doe v. Uber Techs., Inc. matter, the Court granted Uber's motion to dismiss as to one driver when Plaintiffs did not allege that anything existed in the driver's background that Uber knew or should have known and that should have prevented Uber's approval of the driver. However, the motion to dismiss was denied as to the second driver where a 7-year background check revealed no misconduct, but the driver had a domestic violence conviction 12 years earlier.
In some jurisdictions, TNCs face additional requirements for operation including insurance coverage and fingerprint based background checks. Thus in order to decrease liability for negligent hiring and supervision claims, TNCs must comply with extensive background check requirements.
More states are now requiring TNCs to conduct background checks on each driver applicant and also requiring that they perform an additional check every so often. However, some of these same states allow for the sealing of certain criminal records statutory time limits. Thus, even by employing these additional measures to verify driver backgrounds, an added layer of uncertainty still exists. As such, TNCs should conduct comprehensive background checks on potential drivers to ensure that any potential past misconduct is known prior to permitting the individual to become a driver.
Additional Considerations Regarding Punitive Damages
In certain circumstances, an employer may be liable for punitive damages based upon an employee's wrongful actions such as when the employer had advance knowledge that the employee was unfit, the employer expressly authorized or ratified the conduct or the employer is personally guilty of oppression, fraud or malice.
A common defense to suits that allege driver misconduct is that the Plaintiff's claims arise solely from the misconduct of the driver. Thus, employers should take prompt steps to stop the behavior to avoid the perception of inadequate investigation. By ride share companies promptly responding to allegations of driver misconduct , they can avoid exposure to liability.
Conclusion
As Uber, Lyft, and other TNCs continue to increase in popularity, so does the litigation surrounding their use. One would be amiss to simply consider this ever-developing type of litigation to be no different than any other traditional case. Defense counsel must be aware of the fact-sensitive liability defenses, and the companies should take proactive steps to limit liability based on the emerging case law.
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