Starting a business in Nevada offers several benefits. This includes low incorporation fees, favorable tax regulations (no state corporate income tax for most businesses, franchise tax, or shares tax), and laws that protect business owners and their business. In this blog, we’ll cover a checklist for first-time business owners and the importance of each item.
Operating Agreement (for LLC) or Bylaws (for corporation)
We’ve discussed the importance of a well-written operating agreement for LLCs, and you can read more about it in this blog post: here. Bylaws are equally as important to a corporation. Bylaws set out the rules to govern a Nevada for-profit corporation formed under Chapter 78 of the Nevada Revised Statutes.
Nevada Formation Documents
Businesses interested in incorporating, including non-Nevada businesses pursuing authorization to do business in Nevada, need to register with the Secretary of State’s Office. Formation documents in Nevada will include:
- Articles of Organization (LLC) or Articles of Incorporation (Corp)
- Initial List of Officers
- Nevada State Business License
Nevada Registered Agent
A registered agent is designated by a business to receive official legal documents, such as lawsuit documents, subpoenas, and other official legal papers. Some commercial registered agents offer additional services, such as preparing and filing registration documents, sending reminders when license renewals are due, and keeping company documents. Every Nevada business is required to have and list a registered agent. A company failing to comply with Nevada’s registered agent requirements can be fined as much as $500 per day.
Employer Identification Number (EIN) and Tax Election
An employer identification number is issued by the IRS. An IRS Form SS-4 is used to apply for an employer identification number (EIN). An EIN is a nine-digit number assigned to an entity for tax filing and reporting purposes. When filing, you will need to select between the different tax treatments. The tax election should be selected after consultation with a CPA. You may apply for an EIN in various ways but international entities and/or persons may have different requirements.
Fictitious Firm Name/ DBA
Businesses that plan to use a name different than their legal or corporate name are required to obtain a fictitious firm name (FFN) certificate. FFN’s allow a business owner to utilize their business entity under different names. Owners can apply for multiple FFN’s to open different storefronts or brand in different ways but control them under one business entity. FFN’s are issued by the County Clerk. The forms must be submitted with original signature so they cannot be submitted online. It is important to keep in mind that an FFN does not protect you from intellectual property claims (i.e., trademarks, copyrights etc.).
Nevada Department of Taxation
Every new business in Nevada must register with the Nevada Department of Taxation. This department oversees Nevada’s commerce tax as well as sales tax and use tax. Depending on how your business operates, you may be subject to any of the following:
- Nevada Sales and Use Tax Registration
- Nevada Modified Business Tax
- Nevada Commerce Tax
You can register, file, and pay most taxes online through the Nevada Department of Taxation website.
Local City / County Licensing
In Nevada, all businesses are required to obtain a business license within the city / county in which they operate. You may go to the city / county website and download the appropriate forms. Some cities may charge additional fees depending on the type of business. It would be best to understand what the city / county requirements are for your business industry before you apply for licenses as fees are sometimes nonrefundable.
Other Things to Consider
The following is a list of things to consider depending on your business’ industry and area of operation.
Nevada Department of Employment Training and Rehabilitation (DETR)
Depending on your industry and employment situation, you may be required to register with DETR. The Department of Employment, Training & Rehabilitation (DETR) is the state’s lead workforce development agency. It consists of divisions that offer workforce-related services, job placement and training, services for people with disabilities, investigation of claims of discrimination, unemployment insurance benefits, labor market data, and more.
Regulatory License, Liquor, Gaming, etc.
Depending on your industry category, goods, and services – you may be required to file for additional regulatory licenses. These licenses may be issued by the city or state. It is important to understand and confirm you are in compliance with these regulations before operating.
Foreign Entity Registration
If you will be operating in other states, you may need to file a foreign entity registration. A foreign entity is usually a company that does business in a state other than where the business is originally registered. Depending on the company’s activities, the foreign state’s laws might require the owners to register the business there as a foreign corporation and pay state taxes.
We’ve discussed a few reasons why trademarks and Nevada trademarks are important, that blog can be found here. Trademarks are a part of the identity of your business. Original names, phrases, symbols, logos, and designs that you create for your business help to identify your products and services can be trademarked and protected.
Contracts play a vital role in any business transaction. Aside from making any agreement legally binding, contracts can also be a part of the business’ policies, they can serve as future references, as well serve as proof in the event of disagreements, complaints, or disputes needing litigation proceedings. These contracts can range from employment agreements, investor agreements, purchase agreements, etc.
Going on this journey alone is daunting. There are plenty of resources available to make starting and growing your business more manageable. An experienced business attorney can guide you through this process and provide some peace of mind. Having professional information and assistance right at your fingertips, could be just what you need to set your business on a path to sustained success.