From idea to profit: Starting a business in Nevada
Entrepeneurs need to take the first step towards starting their business carefully.
The first step towards starting a business may be the most courageous. Going from an idea to actual commitment to the business is a risk. If done correctly, the risk can pay off. The first step towards starting your business: choosing a business entity.
What business structure is right for my business?
Business entities are generally designed to protect personal assets from the risks that come with the business. Depending on the entity you choose, the business structure can also lead to tax savings and other benefits.
Three examples include:
- Sole proprietorship. This structure does not require formation. Although an easy way to start a business, it lacks what is arguably the main benefit of a business structure: protection from liability. In most cases, it is best to put in a bit more work and choose a business structure that will provide liability protection.
- Partnership. A partnership generally involves more than one business owner sharing directly in the profits and losses of the business. The share is dictated by the percentage of the business each partner is granted. Formation requires a partnership agreement. Liability in partnerships can be difficult. In general, partners are open to personal liability and each individual partner could be liable for the entire debt.
- LLC. A limited liability company (LLC) provides liability protection and allows business income to pass through personal income. This means the business owners do not have to pay a corporate tax. The same taxation structure is generally used for partnerships. Formation generally requires use of articles of incorporation and an operating agreement.
Business owners may also take corporate structures into consideration. Corporate entities are costlier but can provide increased liability protection as well as additional benefits. These benefits can include tax savings and can issue shares. Business owners can use the shares to attract potential investors and raise capital for their business.
Once you decide the formation for your business endeavor, it is important ot register the business with the proper authorities. In Nevada, business owners use SilverFlume to register. The state uses this online portal for its licensing and registration needs. You will also need to check the state’s list of registered businesses as you will need to choose a unique business name to continue the registration process.
Business owners who are looking to incorporate are wise to seek legal counsel to discuss their options. An attorney experienced in business law matters can review your plans and discuss the best options to help make your business goals a reality.