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!
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