Which Documents Must You File With the State to Start a Company?
If you’re starting a company, the documents you are required to file with the Secretary of State depend on which type of entity you choose. There are many benefits to operating as a formal business entity, but this will typically require forms to be completed and filed with the Secretary of State. If the forms are incomplete or incorrect, you may miss out on some of the benefits of forming the entity in the first place, including protecting the business’ assets.
The team of attorneys at Lee Kiefer & Park helps Nevada businesses by discussing the company objectives with the client to help them choose which type of entity is right for them, create it, and ensure the appropriate protections are in place. There is far more to starting a business than filling out forms. Call us at 702-333-1711 to learn more.
Some Business Don’t Need Documents
Sole proprietorships and general partnerships aren’t required to file formal formation documents in Nevada (but they must obtain a Nevada State Business License to do business in Nevada). A sole proprietorship is simple, but this simplicity comes at a cost. The individual sole proprietor’s business activities may create personal debts and liabilities, payable from the owner’s own personal assets.
A general partnership is created when more than one person or entity decide to do business together. There need not be formation documents, but those involved should create a partnership agreement. The partnership agreement should spell out each partner’s role, how the business will operate, and what will be done if one partner wants to leave, dies, or both want to end the business.
Like a sole proprietorship, the lack of formality with a general partnership also comes with a lack of protection for the owner’s individual assets. A general partner is personally liable for the debts of a general partnership.
Other Business Entities Require Filing Formation Documents
- Limited Partnership
In a limited partnership, at least one general partner manages the organization, and at least one limited partner invests in the business, but doesn’t actively manage it. The limited partnership, itself, does not pay income taxes. Rather, the profits and losses pass through to the partners, who report them on their own income tax returns. The general partner faces personal liability for debts and obligations of the company, but a limited partner does not.
The State of Nevada uses these forms to form limited partnerships.
- Limited Liability Partnership (LLP)
Unlike general or limited partnerships, an LLP offers some protection from liability from the negligence or wrongful acts of the partnership’s other partners. This includes omissions, errors, malpractice, or negligence. Like a limited partnership, there’s no direct taxation on an LLP. Its profits and losses are reported on each partner’s own income tax return.
The State of Nevada uses these forms to form a LLP.
- Corporation
A corporation is owned by stockholders or shareholders, and is operated by the officers they elect. Officers connect business management to the board of directors, which makes policies and important decisions for the corporation.
A corporation is the most formal business structure, with the most legal requirements. A corporation is typically double-taxed (absent certain tax elections that may be available to the corporation). Its profits are taxed, and if passed onto shareholders (as dividends), the shareholders pay income tax on the dividends. However, corporations are generally viewed as being most protective to shareholders, protecting them from personal liability for acts of the corporation.
When the business forms, Nevada corporations must file Articles of Incorporation, an Initial List of Officers/Directors, and obtain a state business license. The Articles of Incorporation include:
- Authorized shares and par value (or nominal or original value, which is the face value of a stock certificate as described by the corporate charter)
- Their registered agent’s name and physical address (not a post office box)
Nevada has forms that must be filed to start a corporation.
- Limited Liability Company (LLC)
An LLC is a type of organization that is less formal than a corporation, and requires fewer forms and ongoing formalities. Profits and losses pass through to the owners (known as members), which are reported on their individual income tax returns. Members or appointed managers may manage the company by the terms of an operating agreement. This structure is intended to protect individual members from being held liable for the business’ debts or liabilities.
The State of Nevada uses these forms to form an LLC.
Starting a Business? Contact an LKP Lawyer Who Knows About Business Formation.
LKP has experienced business formation attorneys who serve individual clients and their businesses throughout Nevada. If you are starting a business or planning to open one in Las Vegas or Henderson, contact us for a free consultation using our online contact form. Or call LKP at 702-333-1711 and speak with one of our lawyers.
Attorney Kennedy Lee practices in all aspects of trust and estate law. He views all legal issues from multiple angles (e.g. from litigation to administration point of view) to provide a higher quality of service to our client.
