IT Rogers

Protecting Yourself with Your Business

It is extremely important to take the following steps. It will benefit you greatly in the long run. Let’s propose a scenario.

You decide to start your own company doing roof work due to your love for sitting in the exhausting heat. You grab some clients and start hitting the ground running. You are making more money than before and loving being your own boss. One day, you accidentally drop a shingle on one of your clients head, and he sues you for everything you are worth. You no longer have your car or house, and are completely devastated by  your accident. How can this be prevented? Simple. Register for an entity.

I don’t like the word entity. Instead, I like to call it a business.

“But Ian, I already started my business @#$%!” Of course you did. But did you file your articles of organization, initial list officers or board of directors, and apply for your state and county business licenses? Although you may have started working, doing it under an entity, for example, “The Roofers, LLC” will protect you if anything bad happens. Even if you work alone, spending a couple of hundred dollars will protect you in case anyone decides to sue you over nothing. Do all of your business under your company name and if you are sued, they can only take what your business is worth, not what YOU are worth.

There are three main types of entities, Limited Liability Corporation (LLC), S Corporation, and C Corporation. Ask your lawyer or use the internet to find the differences and benefits to using each one, I’m not Wikipedia.

Once you decide which route you are going to take, visit your state’s Secretary of State website and fill out the wonderful paperwork called “Articles of Organization”. Each state has its own laws about filing, so you are going to have to make sure to comply. Don’t sweat it, just don’t put false information on your forms and you will be fine.

I’d love to explain this each time for each state, but I only know how to do it the Nevada way. I could explain that, but chances are you don’t live here.

E-filing takes the least amount of time, so I recommend something to that extent. Less work = more fun.

After you receive some paperwork back saying that your entity is established. File your initial list of officers or board members. Once this is completed, move on to the good stuff, business licenses.

Depending on where you live, your state might require two business licenses, state and county. For example, I need one for Nevada as well as Clark County.

Bottom line: Know the laws and processes of your state in terms of licensing and filing. Take the time and money to do so, because if something goes wrong, you’ll be glad you have the protection of an entity over your head.

Photo via robertpogorzelski