One of the most common questions I get asked by our new clients is; should I incorporate my business? The quick answer is; yes. There are several reasons why when starting a business you should incorporate. I’ll start with the issue related to liability. Unfortunately, we live in a world where lawsuits have become common-place. For example, let’s use a restaurant owner—they have a patron who slips and falls; this causes an injury. If the restaurant owner was a “sole proprietor,” this opens them up to personal liability related to the patrons injury. We all work hard for what we have, and the last thing you want is to lose everything by not properly protecting yourself.
By incorporating or establishing an LLC, your business is separate from your personal assets. In Nevada, business owners are required to have a Nevada State Business License—this must be renewed every year. Many states also require that you have a workers compensation policy to cover work-place accidents. In addition, most business owners purchase liability insurance—all of these policies should be issued to the business; not an individual.
Our firm specializes in assisting small business owners obtain their local and state business licenses. We often come across new clients that are not aware of the importance of incorporating or establishing an LLC. It’s our job to explain to them the process, facilitate setting up the legal entity, and obtaining all their necessary licenses. Generally, the first step is forming the new corporation, applying for their Nevada State Business License, providing all the necessary application materials, and submitting the completed application to the respective government agency.
In Nevada, many of our restaurateurs seek gaming licenses along with their liquor licenses. For example, in the City of Las Vegas restaurant owners can apply for a “restaurant with alcohol” license. This allows the business to install up to (5) gaming machines in a bar area that’s separate from the restaurant. Once you introduce gaming into your business it becomes even more important to establish a Nevada Corporation. Most regulatory agencies encourage business owners to not apply for licensure as a “sole proprietor.” While they can’t provide legal advice (we do not either), they are compelled to explain what needs to be done in order to comply with licensing regulations.
The final reason why business owners should incorporate is that many businesses have multiple owners. For instance, take a business that has (3) owners and they all have equal ownership. The document that spells out the relationship between the owners is called an “operating agreement.” When applying for licensing in Nevada, the “operating agreement” is one of the requirements for obtaining a business license. While I could provide many other examples of why incorporating is important, remembering that “liability” is in my opinion the most important reason. Keeping your personal assets separate from your business is a must. If you’re looking to start a new business in Nevada, give us a call and we’ll guide you through the process.