One of the most exciting areas of my practice is talking with a client about starting their own business. Sometimes it’s just an idea they want to discuss, and other times the client comes to me with a plan and a long list of questions. Many of my clients have already started their businesses as sole proprietors, which always leads to the discussion of whether that form of ownership is the best option for them when considering personal liability and taxes.
As a sole proprietor of a business, you accept personal liability for any loss that may occur. Purchasing the right business insurance is a must. When it comes time to pay taxes on your earnings, your business is considered a “pass through” entity and your income tax liability is determined based on your overall income for the year. The “pass through” concept generally works the same way for a limited liability company (LLC) or a partnership.
One good option for sole proprietors in Nevada who want to avoid personal liability in case of loss is to create a limited liability company (LLC). In that case, your company operates as a separate entity and your liability for loss is limited to the value of your business assets.
The Nevada Secretary of State provides a helpful website for those of you thinking about taking the leap and “becoming your own boss.” My advice is to learn all you can from available resources (and there are many out there – your local library, news articles, websites and your trusted family and friends.) Then, when you are ready to work harder than you ever have before, come and see me. I want to hear all your ideas!
Interested in learning more? Give me a call at 775-392-4223 or email me at feedback@dterralaw.com.
