LLC, DBA, Liability

Discussion in 'Starting a Lawn Care Business' started by Joe Smith, Feb 16, 2009.

  1. Joe Smith

    Joe Smith LawnSite Member
    Messages: 6

    Need some help understanding the licensing process.

    I have a dormant LLC from a few years back. I assume the EIN is still useable.

    If the LLC name is XYZ Enterprises, can I use a DBA of ABC Lawn Care?

    Would I get a city business license as the LLC name or the DBA name?

    Is the liability insurance purchased on the LLC, the DBA or me personally?

    Any Alabama specialty knowledge would be welcome, but all suggestions are great.
  2. jhastrello

    jhastrello LawnSite Member
    Messages: 105

    Companies can do a dba, just like an individual. Be sure that your LLC is still valid. Many times, if you have not filed taxes/forms/etc., routinely with the state, they will 'roll you off' and you will no longer be valid.

    Need to check what the LLC rules are in your state, for LLC's are not as standard (state to state) as an S Corp or Regular Corp are.

    Insurance will be through the company, although based in large part on your ability/history.

    I don't need a business license in the part of Texas I'm in, so can't help there.
  3. Joe Smith

    Joe Smith LawnSite Member
    Messages: 6

    I'll check with the State on status of LLC.

    I do not currently have the 1mil personal liability policy i probably should have. Would it be best to have for 'other' reasons and to have liability on the business as well?

    Or since I’ll be starting out small and learning the business, how about going as a sole proprietorship and use the 1mil personal liability policy as coverage?
  4. jhastrello

    jhastrello LawnSite Member
    Messages: 105

    You likely have 'some' personal liability, if you have homeowners insurance. You will likely need Liability for Commercial Work.

    If you are incorporated (Corp, S-Corp, LLC), you are personally not liable - but the company is. In short, if you caused a problem and got sued, without Liabilty Insurance, someone winning a suit/judgement against you could take your 'equipment/property' that is part of the business - without liablity insurance. But not your personal belongings (home, etc). Talk to your Insurance carrier.

    If you don't have the LLC protection, then if you are a Sole Propertier, then you are personally liable, regardless of your insurance. Insurance will only protect you to the level you are insured for. Many, many people just simply start out as Sole Properitors.
  5. av8rbama

    av8rbama LawnSite Member
    Messages: 3

    I'm in the same boat, in Alabama too.

    I've had an active S-corp since 06 for my flying service (I'm a rent-a-pilot, corporate aviation is in the crapper if you've not turned on your TV lately and I'm laid off from my airline gig) and need another way to stay busy and make money. I'll be a one-man gig.

    I did lawn care 15 years ago in high school, albeit illegitimately. Just got a used Walker T-model for my own 2 acres and already have Stihl blowers and weedeaters. "XYZ Flying Service, Inc." doesn't exactly portray "hey, I cut grass." I understand it's very easy to do a "XYZ Lawn Service dba XYZ Flying Service, Inc."

    I'm visiting my CPA next week, I'll post my results to the OP afterward.
  6. terrapro

    terrapro LawnSite Bronze Member
    Messages: 1,234

    easy answer for the ins. question is...whoevers name is on the paycheck from the customer.
  7. av8rbama

    av8rbama LawnSite Member
    Messages: 3

    After talking with my CPA and the Alabama Secretary of State Office, I found out that DBA or fictitious names do not have to be registered in Alabama, you just can't use the name of another business entity that you do not operate. Search the records to make sure you're not using someone else's name and you're good to go.

    Alabama Secretary of State

    All of my transactions will be run through my Inc., not the fictitious name... business license, liability insurance, banking (and payments from clients unless you want to open another checking account, I'm not) etc.

    Disclaimer: the rules for DBAs vary from state to state and this is the product of my own research and am not liable for the information posted herein.:dizzy: Consult a professional prior to embarking on your own business ventures :laugh:
  8. lawnpro724

    lawnpro724 LawnSite Silver Member
    Messages: 2,201

    Your FEIN is still good all you have to do is call them and re-activate it, your only issued one number in your life time. If you need to change your business name you will need to fill out all the paperwork to do so but you will have the same number.
  9. av8rbama

    av8rbama LawnSite Member
    Messages: 3

    I should have mentioned to the OP that particular counties in Alabama may require you to register a fictitious name. Mine does not, so I'm not familiar with that process.

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