“If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.”
John Quincy Adams
Are you ready to cast your rod into a new business idea? Would you like to use your unique skill to give a love of sport fishing to others? Becoming a fishing guide may be exactly the best strategy to do what you love, help others learn, and enjoy nature.
There are just a few things that could prevent you from taking your skill and making a profit from it. Customers who forget to pay, accidents from misuse of fishing equipment, unforeseeable accidents caused by weather conditions can all impact your ability to earn a living doing what you love.
Do you want to spend thousands of dollars for a lawyer to help? Or do you want to rely on the internet and misinformation floating around the web? Let’s guide you to appropriate solutions at a fraction of what a lawyer would charge.
As business lawyers we’ve worked to create an affordable way to provide you with the legal information and documents you need to begin your company. Below are some of the issues covered in our StartUp, Legally! course.
SELECTING A BUSINESS ENTITY
As a fishing guide, choosing the correct business entity is imperative to the success of your business. 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. Regardless of the form of business you select, one way to start your company off with the proper management tools is by drafting a quality agreement between the founding partners.
A sole proprietorship is the most basic form of business entity that starts by an individual conducting business. 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. Sole proprietorships offer no liability protection for owners, exposing owners to liability for all debts incurred and obligations of the company, including questions from the IRS. Additionally, sole proprietaries are usually not organized well for future growth because there are typically no founding documents
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. In South Carolina, for example, Partnerships are governed by the Uniform Partnership Act (UPA), which is found at S.C. Code Ann. § 33-41-10 to 1330. Most states have similar statutes. General Partnerships allow for each partner to have control over management decisions, sharing of profits, and right to use partnership property while being jointly and severally liable for the debts and obligations of the partnership.
Many states also have limited partnerships (LP), which require at least one general partner and one limited partner. A limited partner enjoys liability protection from the negligence and contractual obligations incurred by the LP, almost like a financial investor with a hands-off approach. Limited Liability Partnerships (LLP) offer partners liability protection, meaning partners are generally not liable for the negligence of other partners. An LLP requires the partners to file with the Secretary of State and pay a filing fee. The taxation of an LLP also passes through to the partners, as with the other forms of partnerships.
If you are wanting to start of your fishing guide business with multiple employees or business partners, an LLC may be the entity suited for your company. Limited Liability Companies (LLC) offer owners the ability to operate the company without rigid rules associated with a corporation while affording great liability protection and flexible tax options. As with forming a LP, LLP, or corporation, LLCs require a simple filing with the Secretary of State and a filing fee. There are two basic types of LLCs: member-managed and manager-managed. The default rules governing LLCs are statutory. In South Carolina, the Uniform Limited Liability Company Act of 1996, S.C. CODE ANN. 33-44-101 to 1208 governs LLCs. Most states have similar statutes. These laws serve as the default rules on LLCs unless the operating agreement specifies otherwise. One of the distinguishing features of an LLC is the ability to enjoy liability protection because the LLC is treated as its own separate entity, different from its members. 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 enjoy flexibility regarding taxation, allowing the owners to choose whether it will be taxed as a pass-through entity, S-Corp, or at the entity level as a C-Corp. Please consult a tax professional on how each choice would specifically affect your business.
The operating agreement of an LLC can be a great tool because it affords flexibility, allowing the members to agree to terms different from the default laws found in a state’s limited liability statute. These kinds of agreements can be used to limit the discretion other partners have in approving expedition extensions. 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.
Corporations offer great liability protection for shareholders while providing a sophisticated form of governance that offers comfort to outside investors. These require the standard corporate formalities with fees and specific yearly filings. Corporate laws vary per state. For instance in South Carolina, law dictates corporations must file Articles of Incorporation signed by an attorney and create bylaws, which set out an agreement on how the company will operate. From the outset, the Articles of Incorporation state how stock is held and the classes of stock to be issued, as well as voting rights for shareholders and the distribution of dividends. The bylaws of a corporation serve as the constitution of the company, addressing everything from shareholders rights to stock options to the management of the company and dissolution. Those holding shares within a corporation are able to elect directors to manage the company
TRADEMARKS FOR YOUR BUSINESS
Don’t spend two years establishing goodwill and catching tons of fish 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. Which will challenge you as a fisherman to come up with a creative alternative to the standard reel and casts type logos. 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.
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. This is where you can control when customers pay and how much they pay. What it would cost for an extension of their expedition, Waivers of liability, and terms of your service can all be manage through a contract.
Every city and state dictates the terms by which business must operate. Therefore, it is imperative that you not only check with your state and county laws to obtain requisite licensure for being a guide, but also consult the local Department of Natural Resources on your business activity. Most of the time, it is a matter of registering, paying local taxes, and having an inspection of your equipment. Contact your local government for further information.
If you want a reliable and dependable process to becoming a fishing guide, look no further than StartUp, Legally! Owning your own business is exciting. Don’t let legal become an impediment to the navigation of your fishing business.