As often is the case during an economic upheaval, many have used the downturn caused by the coronavirus pandemic to reassess their working lives.
It could be a former casino employee who decided to start a novelty business in a local mall or a 9-to-5 worker who decided to quit and start a home-based business, but the American workforce is in the midst of a shift.
In 2020, according to SCORE, a nationwide network of small-business mentors funded in part by the U.S. Small Business Administration, overall services—often centering on questions about funding or daily operations—were up by 30% when compared with the 2019 fiscal year.
In Nevada, it’s not an arduous process to file to start a limited liability company. In fact, a person doesn’t even need to be an American citizen or provide any type of identification materials like a driver’s license or Social Security card.
But there are necessary steps, which can all be done online.
Through the state’s SilverFlume business portal webpage, a prospective business owner just needs to pay $425 in fees—$200 for a business license, $150 to keep it listed within the state database, and $75 to file the company’s pertinent information, such as officers—and fill out some information.
The license and listing fees are due annually.
Of course, a business’s name can’t already be taken, and it might, depending on what type of company it is, need an additional state or local regulatory license.
Kim Perondi, deputy secretary for commercial recordings for the Nevada Secretary of State’s office, said around 80% of LLC filings—by far the most common small business registration mechanism—are done online.
She said she thinks Nevada charges more than some other states, but that the state might make up for that by how relatively painless the process is.
“The most important thing to remember before you file is to consult with legal counsel and a tax person,” Perondi said. “Before setting up an LLC, you want to make sure that’s the type of entity you want. And you want to make sure a name is available before you start to spend money on printing and letterhead and all those things.”
Aviva Gordon is an attorney who helps people through the steps to set up an LLC, or just about any other type of business, in Nevada.
During the past two-plus decades, she’s fielded questions and concerns from people wanting to start anything from a mom-and-pop restaurant concept to a company that wanted to provide a stripper parade in Downtown Las Vegas.
It’s not required to hire a lawyer to file LLC articles, but even the secretary of state website cautions visitors that it might be a good idea to get legal advice.
When prospective clients come to Gordon about starting a business, she said it varies how prepared and knowledgeable about the process people are.
“It’s all across the board,” Gordon said. “Some come to me already having had other businesses, so they have experience in this arena. Some come with a great idea and not much else. They might start out by asking what the difference is between an LLC and a corporation.”
There are multiple differences between the two, but the main one is that a corporation is owned by its shareholders and is typically governed by a board of directors, while an LLC is owned by one or more individuals.
Officers in an LLC can also be other LLCs. In Nevada, an LLC can have what is known as disproportionate distribution, which means that multiple officers can split profits any way they wish.
“Typically, I recommend an LLC,” Gordon said. “They have the same or greater liability protection and are less expensive to form. There are reasons to have a corporation, but, as long as I can justify it, I typically recommend the route of an LLC.”
As far as a business plan, that’s where an organization like SCORE might come in handy.
One of the biggest mistakes a person can make when starting a business, Gordon said, is to delay the formal formation of company.
“Oftentimes for new business owners, they think about the name or website first and delay the actual formation of the business,” she said. “The big reason why you want to do that early is to eliminate personal liability. That’s very important. You want to keep your potential business liabilities separate from your personal assets. You don’t want to risk those personal assets.”
Since the start of the pandemic, Gordon said she’s noticed more people interested in starting a business. She said that’s not uncommon during any type of recession, however.
“When people get laid off or there are other economic pressures, that’s often the last little piece somebody needs to be able to take the jump to entrepreneurship,” Gordon said. “I’ve decidedly seen that during the pandemic, but I decidedly saw it in 2009, too. It’s a great thing to see, as long as people know what they’re getting into.”
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