2 solo op's - working under 1 name

Discussion in 'Starting a Lawn Care Business' started by Smitty58, Dec 27, 2003.

  1. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    I will be in business my 2nd year this coming spring. I have had a young man ask me about going in business with me. I'm not crazy about the whole partnership thing ,so my question is: Can 2 solo operators work together under one name? The 1 name would be for advertising only. We keep our own records ,pay our own insurance ,and we have come up with a plan to pay ourselves. Is this ever done? Is it legal? It seems like it would be easier than all the partnership tax headaches ,and if we split for whatever reason we don't have a problem dividing up equipment.
    So what do you think?
     
  2. SodKing

    SodKing LawnSite Bronze Member
    Posts: 1,648

    Lets hypothesize:

    Your " partner " runs over someone in his truck. That person sues the company. You both operate under the d/b/a name. You are just as liable as your partner wether or not you have the differrent insurance. The judge doesn't care he is just going to find a way to pay off the injured by selling your house and your partners.
     
  3. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    Sodking- so what would you advise? LLC, Partnership, just remain solo and hire him as an employee?
     
  4. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Disagree Sodking
    There are thousands of dba its just a name as long as all other aspects stay seperate they would still be 2 seperate biz. But to be on the safe side I would change 1 of the names on the DBA to IE. Smittys58 lawn care and on the other one make it Smitty58 drop the s. The original ? was for advertizing only so who would notice a difference This way he would truely have no "partner" just possably a shared phone #

    Mac
     
  5. glenjr10

    glenjr10 LawnSite Member
    Posts: 98

    smitty,

    I hope I am understand this correctly, so here is my opinion.

    I am totally against entering into this situation, because I you are extremely careful about the attention to detail, and he is not, the reputation refelects against your work, while you have not done a thing, and do not have any control over his work.

    Also, I strive to satifisy, customers in the high end of the real estate spectrum. I would price these properties accordingly. If he was to go to the slums of your city and lowball everyone, then your "company" name will more than likely be associated with low-quality and pricing.

    RUN, RUN, RUN

    The only thing that I would do is possibly hire him, but never allow him to be his own boss under your name.
     
  6. SodKing

    SodKing LawnSite Bronze Member
    Posts: 1,648

    I would aggree that it is just a name and a dba. However, lawyers will pull every trick in the book to get money. Contrary to what I used to think the law is NOT an honerable profession. They do what they are told for money wehter it is lawful or not. If you both operate as Joes lawn care they will sue Joes lawn Care and you will both need to answer.

    Another reason not to operate as partners who operate seperately, your reputation. It will not be frank from Joes Lawn Care screwed us, it will be Joes lawn care screwed us.
     
  7. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900


    I agree 100%, anyone can sue anyone, but that does not mean you will win. Nor did I say it would be cheap to defend. The man asked if it could be done. YES! Also he never asked if it was a good idea and I never said it was. All I did was try to answer the mans question. Could it work? Yes. But I don't believe that it would be worth the trouble to make it work, for all the above stated reason plus a few more. My advise to him would be to hire him as an employee if he need the help, or stay solo or even sub work from or to him as the need arises.
    ;)

    Mac
     
  8. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    Ok I'm learning from all this discussion. So it sounds like it would make more sense to just go it alone and hire this young man as a sub. Does that sound right or what?
    Thanks for the help.
     
  9. GlorifiedLawnBoy

    GlorifiedLawnBoy LawnSite Member
    Posts: 37

    Do you really want to be associated with this young man?

    If so you should not be worried about partnership tax headaches because they are the same as those for sole ownership. you both fill out 1040's based on K-1's from the 1065 form that just breaks down what each partner owes from the earned income of the partnership. I really suggest creating an LLC and filing as a partnership. You can write up a members agreement (members are what owners of an LLC are called similar to stock holders) that spells out each persons responsibilities, duties and ownership of the LLC. You can include anything in the membership agreement that will help you both understand exactly how you will be doing business together. The agreement can also say who pays taxes on what. If you want to separate your customers from his you can write it here and on the 1065 just indicate what portion of the income earned you are responsible for and what portion he is responsible for. you can use the member's agreement to retain a lot of control of the way he does his business if he lets you. You can also include a means for you to disassociate yourself from him while still retaining ownership of the company. This Agreement can be as simple or complex as you would like.
     
  10. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    GlorifiedLawnBoy you sound like you have some knowledge on this subject that I'm in need of. Do you operate this way? How do you disasscociate and still retain ownership if things go sour.
     

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