Many people in Nevada, and around the United States, dream of being their own bosses. The freedom and flexibility of not having to answer to anyone is a big part of the classical “American Dream.” However, starting a business can be fraught with challenges, and would-be entrepreneurs can face numerous complicated decisions before that first store grand opening or the first “widget” is produced.
One of the earliest and most basic decisions facing the prospective business owner is what type of business to have. In this instance, we are not discussing the kind of product or service to offer to customers, but the kind of legal organization the business is to have. “Sole proprietorships” and “partnerships” are fairly common. There are, however, several drawbacks to these types of business organizations, the largest one being the fact that the owners of such businesses are personally liable for the debts and other payments required of the business, including fines or lawsuit verdicts or settlements.
This factor leads many businesses to consider incorporation. Having a corporate structure usually helps insulate the business owner from liability for misdeeds or debts of the business itself. There are other advantages as well, such as the ability to issue stock to investors. The enquiry doesn’t end there, however, as there are different kinds of corporate structures, such as S-corps or C-corps, and even some “hybrid” types, like “Limited Liability Companies.”
The type of business structure that is right for any company is going to vary widely based upon the individual circumstances of that company, the industry in which it will be doing business and other factors. There are so many different considerations, from liability to tax issues, that Nevada residents thinking about starting a business or changing structures may need to get more information about business law.