What are the consequences of not following state law when opening a business?
Starting your own business might be your dream. Depending upon the type of business you would like to open, state laws regulating its formation and operation might exist. Not being aware of and/or following these often stringent requirements can have disastrous effects on your new venture.
With the great demand for transportation services in Nevada, popular ride-sharing company Uber
has recently expanded into parts of the state including Carson City, Reno and Las Vegas. Representatives from Uber met with Nevada Business and Industry Department Officials in October to discuss introducing the business. The state welcomed them and the parties discussed what would be necessary for launch. Uber then began operating, allegedly without the necessary approval from state regulators.
Nevada has since been trying to stop the company’s operations due to the alleged non-compliance. The case made its way to a court in Washoe County where both parties presented their arguments. Uber claimed that it is not subject to the regulations because it is not a transportation company. Uber’s attorneys claimed that since the company provides services through independent contractors using a smart phone app, it should be characterized as a technology company. They also argued that because it is so strict about background checks, vehicle inspections and notifying customers that it does not provide transportation services, it should not be subject to the transportation specific regulations. The state argued that Uber is a transportation company as it moves passengers from one place to another and that it does fall under the regulations set forth by the Nevada Transportation Authority. The court agreed with the state and the judge issued a preliminary injunction prohibiting Uber from providing services within the State of Nevada. It is unclear when the company will be allowed to begin providing services again.
Unfortunately for Uber, being accused of not following state law had a serious impact on their ability to operate within the state. If you are starting a business, you do not want to meet the same fate. An experienced business law attorney
can assist you in complying with the laws that are applicable to your specific business. To discuss your matter, call Las Vegas, Nevada attorney Craig Stone at (877) 905-0890.