“Success usually comes to those who are too busy to be looking for it.”
Henry David Thoreau
Are you ready to take your unique organization skills to the next level? Do you already have a portfolio of customers to support your cleaning service? The possibilities of steady income seem endless when you first open your in-home cleaning service, but there are a few formalities that may prevent you from making a profit from your skills.
What happens if you are injured in a client’s home? Will you be using your own cleaning supplies or those provided to you by the customer? What waivers of liability should you give to your employees? What city, county, or state should you obtain a business license for?
You could waste thousands of dollars in legal fees. You could also waste your time looking to the internet for your solutions. Instead, let us guide you to appropriate solutions tailor-made for cleaning services at a fraction of the cost. As business lawyers we’ve worked to create a way to provide you with the legal information and documents you need to begin your company that are affordable. Below are some of the issues covered in our StartUp, Legally! course.
CONTRACTS
Contracts come in all types. Understanding the underpinning of contract law is vital for all business owners. Business contracts include any agreement between two or more people in which something of value is exchanged. Usually one person agrees to perform a service or deliver a good in exchange for valuable consideration, such as money.
Regardless of who is on the other side of a transaction, it is prudent to have him or her sign a contract. Having a company policy mandating confirmatory memorandum to verbal contract agreements may be a prudent way of enforcing this policy. Contract drafting will be imperative to your customer service agreements, because it will outline the parameters of your cleaning service. It will dictate what you expect from your customers and what they can expect from you.
ENTITY FORMATION
Choosing the correct business entity is imperative to the success of your cleaning service. Liability protection, taxation, and management operations are some of the more prominent differentiating factors of each type of business entity and should always be considered. Certain entities allow liability protection for the managers and members of a business by only making the entity itself liable to third parties, while other entities allow liability to rest directly on the personal liability of those that manage and own the business.
Limited Liability Companies (LLC) allow owners to operate the company in a more informal manner than a corporation. LLCs afford great liability protection and flexible tax options that may make it the best entity for growing your cleaning service. For LLCs it is required that you file their existence with the Secretary of State and pay the filing fee. LCCs can be member-managed (owners manage the company) or manager-managed (owners hire individuals to manage and make business decisions for the company). Therefore, an LLC affords its members a layer of liability protection insulating them from the negligence of employees and the debts or contractual obligations of the company. LLCs get flexibility regarding taxation, which allow members to choose how the entity will be taxed. Please seek out the advice of a tax professional on the possible options for taxation and how they would best benefit your business.
Operating agreements are imperative to the success of your business. An operating agreement can be customized to fit the particular needs of the company including, but not limited to, defining management rights of the members, member equity and shares, distributions, dissolution, disassociation, buy-out provisions, transfer of interest, and a number of other important ownership considerations.
A sole proprietorship starts by an individual conducting business. If you are going to run the cleaning service yourself, then this may be the best entity for your needs. There is no filing with a state or formal process to govern this method of business operation. The taxation is also simple because the profits of a sole proprietorship “pass through” to the owner, meaning that the income and expenses of the business go on the owner’s personal return. Partnerships allow for a vast number of options to fit a particular business’s specific needs. All that is required to form a general partnership is for two or more people to begin conducting business for a profit. Both of these options do not afford liability protection for the owners and also bind each individual owner by the decisions of other owners.
TRADEMARKS
Don’t spend two years establishing a well-known cleaning service before learning your company is infringing on another’s trademark. Do research on the name and trademark your company is attempting to use. It is highly encouraged that businesses follow through and trademark their mark with the United States Patent and Trademark Office. A trademark is a sign, design, or expression that identifies products or services from a particular source. A registered trademark symbol is ®.
Trademark registration is a great way to safeguard to building a brand that you can protect for years into the future. We encourage all businesses that are building goodwill with their brand to consider taking the steps to register their marks. Even if a company has not registered a trademark, they still have rights associated with their use of the name or slogan. There are a lot of considerations when a business is currently using the mark you desire, so we recommend that you contact an attorney to ensure that your desired mark is available for use and registration.
LICENSES
Every city and state dictates the terms by which business must operate. All businesses, storefront, virtual, and home and otherwise, must comply with local ordinances and laws. Most of the time, it is a matter of registering, paying local taxes, and having a fire marshal approve the premises. Contact your local government for further information.
WEBSITES AND PRIVACY
“Terms of Use” is a simple way to setup rules for the visitors to your business’s website. It prospectively limits the liability of your business if a visitor were to allege a claim against your business. There is no definite requirement for a business to define the terms of use for its website, but it gives an extra layer of legal protections with essentially no cost to the business. Your business will want to address the use of your fonts, text, or logos by unaffiliated third parties. Lastly the terms of use should set out the governing state law of your entity. Privacy policies within any business entity should attempt to meet five goals. The first being that the policy actually notifies the individual what personal information is being requested from them. The individual must also have a choice of what personal information will be given to the business. A business should afford people a level of security when collecting their personal information by stating how their data is collected and stored. Lastly, people should be able to seek redress if their personal information is release or if the privacy policy of your business is not met.
