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Posted on June 19, 2024 in entity formation
Owning and operating a business has both its perks and its responsibilities. And one of the responsibilities that the owner of a business has is to file for a business license each year. However, not all business owners are required to file for a license. This might leave you wondering about who is exempt from a Nevada state business license.
As a business owner, there is more at stake than just contributing to the state’s economy. There is an expectation that proper decision-making will help support you as an owner as well as that of your employees and their families. With the support of a Henderson business lawyer, you can ensure that the decision is the right one.
The Nevada Secretary of State requires every business owner to file for a state business license each year. In 2009, this requirement was moved from the responsibility of the taxation department to the secretary of state. Under the statutes, any organization that is deemed a Title 7 entity, such as a corporation or a limited liability company, must file for this license, which includes a list of company officers authorized to represent the business or organization.
Title 7 entities are legally recognized in the state as those who legally file their formation paperwork with the secretary of state. Annually, these companies must provide to the secretary of state a list of company officers or any equivalent thereof who are operating a business within the state, any domestic location, or any international location in which the company operates. They must also provide information on limited liability partnerships and business trusts.
While these requirements apply to most businesses, some are able to file for an exemption.
The state relies on businesses to help drive the state economy. Because of this, it wants to ensure that those who are doing business in the state are doing so in an honorable way. Some business owners can avoid filing for a business license simply by the business or entity classification by either claiming that they are a not-for-profit business or are categorized as a corporation sole (a business entity that consists of one incorporated office occupied by one person).
Other types of organizations and companies are exempt from filing for a business license, including government entities, non-profit organizations (religious groups, fraternal organizations, and charitable organizations), a person who is a natural citizen and operates a business from their home if the business does make up more than two-thirds of their annual income, or a natural citizen whose sole business is to lease homes to others (the number of leases not to exceed four).
These are just a few of the entities that could qualify for an exemption from a state business license. There are other exemptions, but these are the most commonly qualified. No matter if your business is required to obtain an exemption or you are required to file for a business license, your business will receive a state business identification number.
At the time of filing for your exemption, you must submit a Declaration of Eligibility for each officer who is associated with the company. Failure to do so could result in penalties against the company, which may include a refusal to issue the exemption.
If you feel your business qualifies for an exemption, you should speak with a lawyer who can help you understand your options. To keep your business or organization providing goods and services to the public, you will want to be sure your license is in order. While your company may appear to qualify, the way it is classified under the law will offer clarity about whether you can do so.
A: State business licenses are required for all businesses that operate as Title 7 corporations. This includes all individuals and entities that wish to do business in the state. While some entities are exempt, a business or corporation cannot operate without the appropriate license to do so. Operating a business without such licensure could result in penalties against you or your business.
A: If you are self-employed in the state and wonder if you need a business license, the answer depends on what type of business you have. While many at-home businesses do not require a business license, the type of work that you do and how you interact with your clients will play a role. Additionally, whether you are operating your business as a sole proprietor or as a larger company can also factor into the decision.
A: Freelancers in the state are considered entities of sole proprietorship. Under this designation, you may not be required to file for a business license but may need to file for an exemption. This filing must be done annually in order to continue conducting business. Your attorney can better help you navigate the needs of your business and the requirements you must meet as a freelancer.
A: While filing for a business license each year may be time-consuming and frustrating, there are many benefits to operating a business in the state. Because the state does not require a state income tax, corporate tax, or franchise tax, its lenient tax laws allow companies and employees to enjoy their income in favorable ways. This helps allow companies to reinvest in themselves and their employees to invest in the economy.
Owning a business can be exciting but full of responsibility and can fill you with many questions. If you need more information about your state business license or you have questions about how the law may impact your business, contact Ken R. Ashworth & Associates today. Our team of business lawyers has the knowledge and experience you need to keep your business moving forward.
