Setting Up a Business Partnership in Nevada

Research the different types of partnerships available in Nevada (general partnership, limited partnership, limited liability partnership) to determine which structure best suits your business needs. Consider liability protection, management structure, and tax implications for each type. Consult with a business attorney if you're unsure which partnership type is most appropriate for your situation.

Create a comprehensive partnership agreement that outlines the rights, responsibilities, and obligations of all partners. Include provisions for profit and loss sharing, management duties, decision-making processes, dispute resolution, partner withdrawal/addition procedures, and dissolution terms. This document is essential for preventing future conflicts and establishing clear expectations among partners.

File a Certificate of Partnership with the Nevada Secretary of State. For general partnerships, this is optional but recommended. For limited partnerships (LP) or limited liability partnerships (LLP), this filing is mandatory. The certificate must include the partnership name, principal place of business, names and addresses of partners, and the partnership's purpose. Filing fees apply and vary by partnership type.

Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This is required for tax purposes, even if you don't have employees. You can apply online through the IRS website, by mail, fax, or phone. There is no filing fee, and you'll typically receive your EIN immediately if applying online.

If operating under a name different from the legal names of the partners, file a Fictitious Business Name Statement (also called a DBA or 'doing business as') with the county clerk in the Nevada county where your business is located. Publication requirements may apply depending on the county. This registration is typically valid for 5 years and must be renewed before expiration.

Apply for a Nevada state business license through the Secretary of State's office. All businesses operating in Nevada must have this license, which must be renewed annually. The current fee is $200 for most businesses. You can apply online through SilverFlume, Nevada's business portal.

Check with your city and county governments to determine what local business licenses or permits are required. Requirements vary by location and business type. Contact your local city hall or county clerk's office for specific information about local licensing requirements in your area.

If your partnership will sell tangible goods or certain services, apply for a Sales Tax Permit from the Nevada Department of Taxation. This permit allows you to collect and remit sales tax. Nevada has a state sales tax rate of 6.85%, plus local taxes that vary by county. You must file sales tax returns regularly, even if no tax is collected during a reporting period.

Open a separate business bank account for the partnership. Bring your EIN, partnership agreement, and certificate of partnership to the bank. All partners may need to be present depending on the bank's requirements. Keeping business finances separate from personal finances is crucial for proper accounting and liability protection.

Create a formal agreement documenting each partner's initial capital contributions to the business, whether in cash, property, services, or other assets. This document should clearly state the value assigned to non-cash contributions and how these contributions affect ownership percentages and profit distribution.

Develop written operating procedures that outline day-to-day management responsibilities, accounting practices, record-keeping requirements, and internal controls. These procedures should complement your partnership agreement and provide practical guidance for running the business efficiently and in compliance with Nevada law.

Create a buy-sell agreement that establishes the process for handling a partner's departure due to death, disability, retirement, or voluntary withdrawal. This agreement should include methods for valuing partnership interests, payment terms, and funding mechanisms (such as life insurance). This document is crucial for ensuring business continuity during ownership transitions.

Research and obtain any industry-specific licenses or permits required for your particular business. Nevada regulates many professions and industries, including contractors, food service, healthcare providers, and financial services. Contact the appropriate Nevada regulatory board for your industry to determine specific requirements.

If hiring employees, register with the Nevada Department of Employment, Training and Rehabilitation for unemployment insurance tax and with the Nevada Department of Business and Industry for workers' compensation insurance. Nevada does not have a state income tax, so there's no need to register for state income tax withholding.

Set up a comprehensive recordkeeping system for financial transactions, meeting minutes, and important business decisions. Nevada partnerships must maintain certain records, including financial statements, tax returns, and partnership meeting minutes. Good recordkeeping is essential for tax compliance and may provide liability protection.

Set up a system to track and comply with ongoing requirements, including annual state business license renewal, local license renewals, tax filings, and any required annual reports. Consider creating a compliance calendar or working with an accountant or attorney to ensure all deadlines are met.