The state of Nevada is home to many entrepreneurs who are starting a new business. Due to the business-friendly allowances for operators primarily in Las Vegas and Reno, many new startups get established in Nevada. The most important decision these businesses make at the beginning is deciding what business structure they need when getting started. While the ownership group will be a major factor in making this decision, there are still several options that even a single owner may want to choose based on the nature of the business and necessary tax protections.
Sole proprietorship
Small businesses that are owned and operated by one individual are typically set up as sole proprietorships. All income generated by the business is considered the property of the owner for tax purposes. Typically, all it takes is a business license, necessary indemnity insurance and a tax identification number from the IRS.
Partnerships and LLC structure
Partnership businesses can get more complicated than a sole proprietorship. Partners often are invested in unequal amounts, and a limited liability company, or LLC, can be the best business structure for these operations. Income tax obligations are set at the individual level as the actual LLC business formation does not have tax burdens. Equitable partnerships can choose to operate as an LLC as well because there are other benefits of this business arrangement.
Corporations
Depending on the possible size and scope of a business, especially when there is a significant potential for company growth, some entrepreneurs may want to establish their operation as a type of corporation. Both S and C corporations can be established in Nevada. As part of the business formation process, it’s important to research what may be useful for your company and how set up the organization for stock option possibilities.
Deciding on the optimum business formation for a new enterprise is a very serious consideration that all startup managers must make. Having the right information at hand from the beginning is vital for those with a long-term vision of growth and prosperity for their organization.
