Nevada Franchise Forms - Nevada Franchise Law

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Nevada Franchise Forms FAQ

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

Articles of Incorporation are legal documents that outline the essential information about a corporation and its formation. In Nevada, these documents are required by the state government when creating a new corporation. They typically include details such as the corporation's name, purpose, duration, registered agent, and the number of shares of stock it will issue. By submitting the Articles of Incorporation, the corporation is officially recognized as a legal entity by the state of Nevada, with rights and responsibilities similar to those of an individual. It is important to carefully prepare and submit these documents to ensure the smooth establishment of a corporation in Nevada.


What to Include in Articles of Incorporation

When preparing the Articles of Incorporation for your business in Nevada, it's important to include certain information to ensure legal compliance. Firstly, you need to provide your company's name, which should be unique and distinguishable from other businesses. Additionally, the physical address and mailing address of your registered office should be mentioned. It's necessary to appoint a registered agent who will accept legal documents on behalf of your company. The purpose statement clarifies the intended activities of your business. You'll also need to outline the number and types of shares your company is authorized to issue. Finally, include the names and addresses of the initial directors or officers of the corporation. By including all of this information, your Articles of Incorporation will be complete and meet the requirements set by the state of Nevada.


1. Full Name of Corporation

The full name of the corporation is usually a combination of different words, including the main business activity or purpose of the company. When we mention "+ in Nevada," it means that the corporation is registered or has a presence in the state of Nevada. This could be for various reasons, such as taking advantage of favorable tax or legal benefits or having a physical location or branch in the state. Being "in Nevada" essentially means that the corporation operates within the state's boundaries and is subject to its laws and regulations.


2. Principal Place of Business

The principal place of business refers to the main location where a company operates and carries out its day-to-day activities. In Nevada, this means the primary physical address of the business within the state. It serves as the central hub for managing operations, making important decisions, and carrying out business transactions. Having a principal place of business in Nevada can offer advantages such as proximity to potential customers and business partners, access to local resources, and the ability to tap into the state's favorable business environment and legal framework.


12. Limitation of Director’s Liability

In Nevada, there are certain limitations in place to protect directors from excessive liability. Directors, who are typically individuals responsible for making important decisions for a company, are shielded from personal liability for their actions as long as they fulfill their duties in good faith and with reasonable care. This means that directors won't be held personally responsible for any debts or damages incurred by the company, unless their actions were intentionally harmful or illegal. These limitations provide a sense of security for directors, allowing them to make bold decisions without the constant fear of facing personal financial consequences.