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Nevada has endeared itself to many entrepreneurs looking to start a small business, thanks to its relatively low cost of living, growing population and absence of personal and corporate income taxes.The Silver State’s online business portal, SilverFlume, along with supplemental resources from the Nevada Secretary of State’s office, help make starting a business in Nevada quite simple. Here are eight steps to get you up and running with your new venture.
1. Choose a business idea
Businesses that endure are built on solid business ideas. Your startup might thrive with an outside-the-box innovation, or it may improve on an existing concept. Regardless, your company will need to fulfill an existing requirement within Nevada and possibly beyond. As you explore business ideas, consider:
- Conducting a competitive analysis of your target market
- Surveying prospective customers
- Researching industry trends
2. Name your business
Business names send messages to potential customers, offering clues about product offerings, prices, and quality. To secure a name for your Nevada business, you will need to:
- Register your business name. You can only register a business name if another Nevada business hasn’t claimed it first. Conduct an online Nevada Business Search to confirm the availability of your preferred name. Once you find a great available name, create an account on Nevada’s SilverFlume online business portal and select the Reserve a Name option. You’ll pay $25 to formally reserve your name of choice.
- Use required identifiers. Nevada LLCs must include the phrase “Limited Liability Company'' or its abbreviations (“LLC” or “L.L.C.”) as part of their legal business names. Nevada corporation names must contain one of the following words: “Incorporated,” “Limited,” or “Corporation.” Alternatively, you can use the abbreviations “Inc.,” “Ltd.,” “Corp.,” or “Co.”
- Register a DBA. DBA stands for “doing business as.” Companies use DBAs to interface with customers using a name other than the one they’ve registered with the state. For instance, a legal business entity named Hawthorne Bowler Enterprises LLC could use Silly Billy’s Tropical Smoothies as its DBA. In the state of Nevada, you register your DBA on a county level so you must contact the local county clerk’s office for instruction.
- Reserve an online domain name and social media handles. The best online domain names and social media handles are those that naturally align with a company’s official business name or DBA. Try using a domain name generator and cross-check social media services for available handles for your Nevada business.
3. Create a business plan
A business plan is a document, or set of documents, that companies use to chart organizational objectives, plan growth, lay out financial plans, and establish their metrics for success. First-time small business owners can benefit from a business plan template as well as some business plan examples. A comprehensive business plan should include the following sections:
- Executive summary
- Detailed company description
- Outline of organizational and managerial structure
- List of products or services
- Logistics and operations plan
- Market analysis
- Customer segmentation report
- Marketing plan
4. Choose a business structure and get started
You will be responsible for choosing a business structure that aligns with your needs as an owner. Nevada entrepreneurs typically select one of three types of businesses: sole proprietorship, LLC, or corporation. Each of these business structures comes with its own benefits, as well as its own operational and filing requirements, and taxation rules. Here is a summary of each structure:
The sole proprietorship may meet the needs of a Nevada business owned by one person. Sole proprietors have no legal paperwork requirements and they keep all their business profits. However, they cannot access the tax benefits and personal asset protections of a limited liability company (LLC). Crucially, a sole proprietor can be personally liable for lawsuit judgments and debts related to their business. Nevada sole proprietorships traditionally appeal to small business owners who operate locally, don’t have employees, and work in a low-risk industry with little threat of a lawsuit or debt.
Limited liability company (LLC)
A limited liability company (LLC) is a business owned by individuals called LLC members. Consider the LLC business structure as a way to obtain personal liability protection while avoiding the double taxation of a corporation.
The Internal Revenue Service (IRS) treats LLCs as pass-through organizations, meaning company profits pass through to members, who report them on their personal tax returns. Nevada LLCs are relatively simple and affordable to maintain. You’ll need to file Articles of Organization ($75) via the Nevada Secretary of State’s SilverFlume online portal. You’ll also need to file an annual report (called an Annual List in Nevada), containing the most up-to-date information about your LLC; the filing costs $150.
A corporation is a business entity that is owned by shareholders. Corporations do not mingle their assets with those of their individual shareholders. Corporations get taxed at a special corporate rate, which is different from the personal income tax rate. Nevada has neither personal nor corporate income tax, however, making the distinction less relevant. Corporations have a more complex legal structure and require significantly more accounting and organizational governance than LLCs or sole proprietorships.
Obtaining an EIN
If your Nevada business plans to hire employees, you must apply for a federal employer identification number (EIN) with the IRS. This applies whether you operate as a sole proprietorship, an LLC, or a corporation. An EIN is your business’s federal tax number and works much like a personal Social Security number (SSN). It also lets you set up a business bank account.
Incorporating in Nevada
Nevada requires new corporations to:
- File Articles of Incorporation. Articles of Incorporation are filed using Nevada’s SilverFlume online portal. The corporation must assign directors—one, at least—and list their names and addresses in its articles. There are no residency or age requirements. The corporation does not need to name its corporate officers in its articles.
- File supplemental forms. The Nevada Secretary of State’s office packages all required corporate formation documents into a single packet. You can access this packet on the Secretary’s website. In addition to the Articles of Incorporation, the packet includes the Initial List of Officers and Directors, and the State Business License. Filing fees start at $75 and progressively increase based on company income.
- Designate a registered agent. Your corporation’s agent must have a physical address in the state of Nevada (a PO box does not count as a physical address). Your registered agent can be any person or a member of your organization; however, many companies hire a registered agent service to receive legal and tax correspondence on behalf of the business.
5. Obtain business licenses and permits
You need to obtain a Nevada state business license from the Secretary of State’s office. The initial application and annual renewals cost $200. Depending on industry and the county in which you do business, you may need additional business licenses or permits to operate your company. The SilverFlume portal’s New Business Checklist can connect you to the required permits and certifications. The state’s Department of Business and Industry also provides links to local governments that may have their own licensing requirements.
You will also be required to have a sales tax permit in order to conduct retail transactions. This is obtainable via the SilverFlume portal. As of 2022, Nevada’s statewide sales tax is 6.85%. Local municipalities may add an additional 1.53% on top of that. The average sales tax on a Nevada retail purchase is 8.23% when combining state and local rates. All Nevada businesses—whether sole proprietorships, LLCs, or corporations—must collect sales tax and remit it to the state. The exception is nonprofit organizations, which can obtain a sales tax exemption certificate from the Secretary of State. If your company is split into two separate legal entities—one for-profit and one nonprofit—Nevada business law stipulates that only the nonprofit entity is exempt from collecting sales tax.
6. Examine business insurance options in Nevada
The Nevada Department of Business & Industry lays out state insurance requirements and recommendations in its online FAQs page. The state requires any business (regardless of business structure) to purchase workers’ compensation insurance but not other insurance, such as liability. LLC owners benefit from carrying insurance policies that protect their company and assets.
Common Nevada business insurance policies include:
- Workers’ compensation insurance. Workers’ compensation insurance provides benefits to employees who sustain a work-related injury. If your business has at least one employee, Nevada requires you to obtain and maintain a workers’ comp policy.
- Commercial automobile insurance. If you use a vehicle for business, you must cover it with a commercial automobile insurance policy.
- Professional liability insurance. Professional liability insurance—also referred to as errors and omissions insurance—protects your LLC against claims that your advice or services caused a customer financial harm.
- Commercial general liability insurance. Commercial general liability insurance, or CGL, helps protect sole proprietors, LLCs, and corporations from financial claims involving injury, property damage, false advertising, libel, and slander. CGL coverage can also protect your business from the costs of fire and water damage, an on-site injury, damage to someone else’s property, or a lawsuit.
- Commercial property insurance. Commercial property insurance policies reimburse businesses for the loss or destruction of property.
7. Understand financial considerations
Your Nevada business will need a business bank account at a commercial bank or credit union to deposit business income. You can also establish credit accounts, which back small business loans and credit cards. If your business plan involves processing credit cards and mobile wallet payments, you’ll enlist the services of a payment processor.
Business ownership comes with many startup costs. Nevada’s Department of Business & Industry hosts an online Business Resource Center that offers resources to help access capital, including information on potential grants, bond programs, and traditional financing options. The US Small Business Administration has two Nevada offices—one in Carson City and one in Las Vegas. You may also find value in a merchant support service—such as Shopify Capital—that connects small business owners to lenders and investors.
If your Nevada LLC earns more than $4 million in gross revenue during a tax year, it owes a state commerce tax. Commerce tax rates vary greatly among industries; the Nevada Department of Taxation provides a breakdown of rates.
8. Market your business
Building a brand and marketing it is one of the most gratifying parts of entrepreneurship. You can use distinct color schemes, fonts, logos, and slogans or taglines to attract potential customers. Once you’ve established your brand identity, you can explore other ways to market your business, including:
- Awareness content (blog posts, videos, newsletters)
- Pay-per-click web ads
- Traditional TV and radio ads
- Social media accounts
- Influencer campaigns
- Store displays
Starting a business in Nevada FAQ
How much does it cost to start and maintain a business in Nevada?
The initial cost of establishing a business in Nevada is $425. This breaks down to: $75 to file Articles of Organization (or Articles of Incorporation), $150 for the first annual list, and $200 to establish your state business license.
What is required to start a business in Nevada?
To start a business in Nevada, you must file either Articles of Organization (for LLCs) or Articles of Incorporation (for corporations). This costs $75. Sole proprietors do not need to file organizing documents, as a sole proprietorship is an informal business structure not recognized by federal or state tax laws. Nevada businesses must submit an annual report called an Annual List. This costs $150 for the first year. You are also required to obtain a state business license for $200. If you’ll be hiring employees, you must obtain a free federal employer identification number (EIN).
Is Nevada a good state to start a business?
Nevada’s appeal starts with the lack of corporate income tax and personal income tax. The state also boasts a growing population, particularly in the Las Vegas and Reno metropolitan areas, which offers an expanding customer base to small business owners. On the downside, Nevada offers fewer services and business grants than higher-tax neighbors like California. Additionally, its overall population remains small, with few people living outside the Las Vegas and Reno/Carson City metro areas.
Who is exempt from a business license in Nevada?
Nonprofit entities and certain home-based businesses are among the organizations in Nevada exempt from needing a business license. The Nevada Secretary of State’s office provides a comprehensive explanation of who may be eligible for a business license exemption.