A person running a sole proprietorship in Nevada must have a state business license and – depending upon where their business is and what they do – they may need additional licensing through their municipality or county. Before getting a license, they need to decide if they will use their own name or a fictitious business name, in which case, they'll have to file for a DBA.
Sole Proprietorship in Nevada
A sole proprietorship is a business entity run by one person and is the cheapest and easiest way to set up a business in Nevada. While ease in creation is a big plus for a business person just starting out, a sole proprietor carries personal responsibility for all actions and debts of that business.
That means if a party sues the business, the owner's personal assets are at risk. Another downside of having a sole proprietorship is that the owner pays self-employment tax on all business profits, which can be more costly than having another type of business, such as a limited liability company, or LLC.
Choosing a Business Name
Sole proprietors in Nevada can use their own name or set up a business name. If they choose to set up a business name, Nevada law requires that it be distinguishable from the names of companies already doing business in the state. To ensure a business name is available, the business owner can check with the Nevada Secretary of State's office.
A person who chooses a name other than their own must file a Certificate of Business: Fictitious Firm Name (also known as a fictitious business name, doing business as or DBA) with the county clerk where they intend to do business. Applicants must include the following information when filing a DBA:
- Business trade name.
- Address of the principal place of business.
- Types of products/services the company provides.
The sole proprietor must also sign the DBA form. Their signature will be acknowledged by the deputy clerk of the county they file in, a notary public, or other authorized officer. Additional filing requirements and fees vary across counties.
Obtaining a State and Local Business License
Businesses in Nevada must apply for a Nevada state business license through the secretary of state's office. Sole proprietors have an annual renewal fee of $200 due on the last day of the anniversary month in which the proprietor initially filed for a license. The proprietor must renew the license before or on the license expiration date – failing to do so will result in a $100 penalty in addition to the annual fee.
The proprietor can obtain the forms or apply at the Nevada Secretary of State's office online or contact the office by phone or mail. The Las Vegas office is located at Grant Sawyer Office Building, 555 E. Washington Ave., Suite 4000, Las Vegas, Nevada 89101; phone 702-486-2880. The Carson City office is located at 202 North Carson St., Carson City, Nevada 89701-4201; phone 775-684-5708.
In addition to a state license, Nevada businesses must also get a business license from the city or county where they operate. Proprietors can download or fill out the appropriate forms by visiting their municipality or county website. Some cities and counties may charge additional fees depending on the business type.
Getting an Employer Identification Number (EIN)
As a one-person business, sole proprietors without employees typically do not need a federal tax ID number (EIN). In fact, they can use their Social Security number for tax purposes. However, they'll need an EIN if the sole proprietor:
- Pays employees.
- Files returns for alcohol, tobacco, firearms, employment or excise taxes.
- Withholds taxes on income paid to a nonresident alien (except wages) in passive income such as rent, interest, dividends or royalties.
- Uses a tax-deferred Keogh pension plan.
- Works with trusts, IRAs, estates, nonprofit organizations, real estate mortgage investment companies, farmers' cooperatives or plan administrators
Getting an EIN is free. A proprietor who wants one must fill out IRS Form SS-4. They can also contact the IRS through its Las Vegas office at 110 City Parkway, Las Vegas, Nevada 89106, or by calling 702-868-5005 or toll-free 800-829-4933.
Business Taxes in Nevada
Nevada sole proprietors do not pay personal income tax, but there are other taxes they have to pay depending on the type of business they operate. The proprietor can register with the Nevada Taxation Department to determine which state taxes they are subject to.
For example, sole proprietorships with employees must report gross wages to the state's Employment Security Division and pay a modified business tax (MBT).
Personal Property Tax and Zoning Ordinances
To ensure that the sole proprietor's business is in a location zoned for that type of operation, they should research the city and county ordinances before signing a lease. If they work from home, the sole proprietor should verify with their municipality if they'll need a Home Occupation Permit.
Nevada businesses must pay a yearly tax on equipment and furniture – the state bases this tax on their property's assessed value.
Other Business Licensing in Nevada
Both the Nevada Secretary of State's office and independent agencies (for example, the Nevada Contractors board for contractor's license and the Nevada Barbers’ Health and Sanitation Board for barbers or cosmetologists) regulate business licensing in Nevada. The business owner can find information about the agencies they deal with through the Nevada Secretary of State Licensing Center.
Additionally, local regulations involving building permits, licenses and zoning clearances may apply. The sole proprietor should contact their local government to find out what else they might need to set up their business.
- Upcounsel: Nevada Doing Business As: Everything You Need to Know
- Nevada Secretary of State: Home
- IRS.gov: About Form SS-4, Application for Employer Identification Number (EIN)
- Nevada.gov: Step by Step Guide
- Nevada.gov: Online Services
- Nevada Secretary of State: State Business License - FAQ
- Las Vegas, Nevada: Las Vegas Business License Application
- IRS.gov: Taxation of Nonresident Aliens
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.