Sole Proprietorship Basics
When you offer services or goods as a for-profit business without forming a legal company, you are acting as a sole proprietor. This is the simplest way to start-up and conduct business, compared with forming and operating another business entity, such as a corporation or limited liability company. You can conduct business in your own name as a sole proprietor. Independent contractors, freelancers and consultants can conduct business as a sole proprietorship. As your business grows, you can transition from a sole proprietorship to another business form, such as a corporation, if necessary.
Application for State Business License
Nevada law requires all sole proprietorships to obtain a State Business License before starting business unless you fall within one of the statutory exemptions. An online document preparation service can help you determine if you need a license and with the application. The minimum information required is your full name and the physical address for your business. If your spouse's name is to be listed on the license, it should be included on the application. You have the option of associating up to four business names on the license. The license must be renewed annually.
Application for Exemption
Operating your business as a sole proprietorship may entitle you to an exemption regarding the State Business License requirement, if your business falls within one of four categories: your business is based at home and the net earnings are not more than 66.67 percent of the average annual wage; your business is limited to residential rental units of four units or fewer; your primary business involves creating or producing motion pictures, or your business involves certain types of insurance. Your business will only be considered exempt if it files application for exemption with the Secretary of State. The minimum information required to complete the form available from the Secretary's website includes your name, physical address for your business and the applicable exemption code provided on the form.
The type and location of your business may necessitate additional filing requirements. For example, if your business sells personal property intended for storage, use or other consumption, you must obtain a Sales Tax Permit from the Nevada Department of Taxation. The county where your business is located will most likely have its own business license requirements. The Secretary of State provides information regarding the various requirements that may apply to a business located in each county.