At this point you have decided to start providing cleaning services, but you don't know what your business structure should be - sole proprietors, partnerships, limited liability companies or companies. This information is confusing, there are files to submit, and it takes a lot of money to get advice. Well, not really, I am waiting for you here.
Most cleaning services start with a sole proprietorship. For some people to do this, but I strongly disagree with this. Before I explain why, you need to understand the differences between the different structures.
Sole proprietorship is the simplest form of business that directly links the owner to the same business, rather than providing any protection to its assets by becoming another entity. Basically, the owner is fully responsible for all debts, all income benefits, and the business is for any legal purpose.
The company itself is an entity and the owner becomes a shareholder of the company. In essence, this means that the company itself has a responsibility and the owner does not assume any responsibility through its personal assets. Business conduct and debt are in business and therefore do not affect the owner's private assets. Special tax rules and two entities, including owners and companies, must pay a separate tax.
A limited liability company [LLC] is a hybrid between the two. This legal structure is maintained by the states, not the federal government, so all income flows to the owner, but any liability is limited to the company, and the owner's personal assets and owners are protected as entities.
For cleaning services, I highly recommend the LLC structure. You will work in expensive homes, offices with confidential information, and companies with proprietary technology and processes. If something happens because of your mistake or employee error, you need to make sure that your personal assets are protected and are not restricted in legal proceedings.
Building an LLC seems to be a daunting task, but services like LegalZoom can do the whole process for you for just $150. I highly recommend that you use such a service because they are at an affordable price and make sure everything goes well. Please note that you need to obtain a FEIN number from the IRS before you can form an LLC. Many websites will try to charge you more than $50, but you can easily get this number from the IRS online system in less than five minutes. As an alternative, many states offer online free-formed services or free forms for you to complete yourself.
After completing this step, you will receive the necessary paperwork to complete many other tasks, such as opening a business checking account.
Orignal From: Start cleaning service - legal structure
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