Get INC?

Discussion in 'Starting a Lawn Care Business' started by Jaswir, Jul 31, 2006.

  1. Jaswir

    Jaswir LawnSite Member
    Posts: 8

    i was looking online and if i get INC is that the same as getting a business license?

    don't i have to

    Get INC for my Company

    then get license from the state

    and get some type of insurance for my CO.

    and details thanks
  2. GardnerLandscaping

    GardnerLandscaping LawnSite Senior Member
    Posts: 310

    from what i understand, a local business license generally applies to the place where you're located and doing business from. if you're selling stuff on the internet, a single local license where you're doing business from is sufficient. if you're a corporation and open a brick-and-mortar store or warehouse, you'll still need the local license where you open the brick-and-mortar store or warehouse.

    i think it differs from area to area as far as landscaping. a local license where your landscaping business is located (home address or lot) is sometimes good enough to allow you to have clients in a neighboring city or county. always ask to be sure.

    the purpose of incorporation varies from reserving a business name state-wide, give legal structure when working with multiple partners or capital investors, provide personal protection from liability, give an impression of easily recognized rules from how your business is managed, etc. for landscaping, a limited liability corporation would be ideal since it gives you pass through taxation rather than double taxation and gives you looser rules and regulation.

    ask your local government where you are located and where you plan to do business. even if you get an answer here, you still want to ask to be sure in case the local laws are different.

    ask your secretary state who is usually responsible for filing articles of incorporation or look at sites offering on-line filing for more information in regards to the different types of incorporation and what they offer.
  3. GardnerLandscaping

    GardnerLandscaping LawnSite Senior Member
    Posts: 310

    and yes, the state law usually requires liability insurance. worker's comp might be necessary for yourself and usually if you have people working for you. disability insurance wouldn't be a bad idea either.

    from what i understand, which might be wrong, if you get hurt on someone's property, they are still liable. what liability does is pay for damages to the property if you should screw up and a tree falls on the house. as a consequence, workers comp may be required and even desired to shield the home owner from being sued because you broke your leg falling into a hole and having their home owner's insurance pay for it.

    please correct me if i'm wrong. this is important.
  4. fjay5272

    fjay5272 LawnSite Member
    Posts: 19

    i guess this is a question/statement for michigan.

    when we were incorporating/getting our bank accounts set up(which is kinda a never ending process it seems) we got a banker who was pretty helpful. knew he wasnt making **** off the commissions with us but he was a young guy and it was cool and gave us a lot of advice of various business stuff. Anyway he said for cutting lawns and what not in the state of michigan there was no license required. Just wanted to double check and make sure this is true.
  5. GardnerLandscaping

    GardnerLandscaping LawnSite Senior Member
    Posts: 310

    i took you off ignore for this one thread.

    i would still ask the local government rather than a young banker who probably has to work a full week to pay for the suit he is wearing.

    local governments want to be paid if you're using their roads and doing stuff where their local ordinances and jurisdiction may apply and affect property value, etc.

    if another landscaping business complains and the official is having a bad day, you may still get nailed with a stiff citation for not having a local business license even if you're incorporated since incorporation primarily deals with the enforcement of legal agreements and shielding owners from personal liability.

    go into any incorporated business. you'll still see the local business license hanging on the wall.

    only exception i can see is if you're working for another business on 1099 for non-employee compensation. for example, an apartment complex gives you access to their tool shed and tells you to provide their maintenance. the business has the license and provides the equipment. you're just contracting your labor like an employee. in landscaping, you're carrying a trailer of equipment all day over their roads and working on people's home in their jurisdiction.

    your local government may have written law exempting landscaping. but unless they exempt it specifically, you're open for trouble. i even read on the city application that home-based business such as landscaping without a commercial property, you are not allowed to publish your home address on advertising materials as your place of business. its ok for business cards, but not for brochures left on mailboxes or advertised in the classifieds.
  6. GardnerLandscaping

    GardnerLandscaping LawnSite Senior Member
    Posts: 310

    finally got back a reply from the city. they said the county business license should be sufficient. and according to the county license information, it is sufficient for doing business in neighboring counties.

    again, ask your local horse to find out if incorporating will cover you for landscaping.
  7. GardnerLandscaping

    GardnerLandscaping LawnSite Senior Member
    Posts: 310

    Since you asked for details....

    Liability insurance protects you from your client. If your client is injured because of your work, they sue you. If their property is damaged because of your work, they sue you.

    Homeowner's insurance protects the client from you. If you fall in a hole on their property and break your leg, you sue them.

    Worker's compensation protects you from your employees. If you don't provide your employees with eye protection and they poke their eye out, they sue you.

    Laws requiring each are set up to protect you. They are required so that you are forced to protect yourself and because you'll most likely not have the money to pay if you do get sued.

    Disability insurance helps provide you with more income than social security if you should become disabled and don't have the skills to seek comparable work.

    Business license fees are used to pay for your use of the city or county services to do business.

    Incorporation fees protects the local tax payers from having to pay for legal costs associated with running a corporation.

    I was taught as a Baptist that suing was sinful so I wouldn't sue a customer. Just bad practice to be known as someone who sues.
  8. GardnerLandscaping

    GardnerLandscaping LawnSite Senior Member
    Posts: 310

    forgot to add liability also covers public liability. your trimmer might throw a rock and damage the neighbor's house, a bystander, or a passing car. your pesticide might damage the water system. etc.
  9. Jaswir

    Jaswir LawnSite Member
    Posts: 8

    so if i want a name for my Co. i must get INC

    i was thinking about doing it here

    i just want to make a name for it, and don't you need to be INC to file for taxes etc....
  10. LindblomRJ

    LindblomRJ LawnSite Silver Member
    Posts: 2,570

    Check your local laws. If you assign a name (other than your) you generally have to file a fictitious name at the county court house, or with the state, where you do business. With a fictitious name you generally do not have to file articles of incorporation.

    If you are a LLC or LLP or INC has to due with liability and taxes. (Business structure.) Questions about the best method, should be asked of your CPA, Lawyer and (or) banker.

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