Legal matters
- Thread starter pappy
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The Fuzz
New member
You aren't starting a business if you are under 18. Unless you plan on getting a business license, getting a Tax ID number, registering your business as an LLC, hiring an accountant to do the taxes, getting insurance, renting a building, and everything else that is involved, then you aren't really going to start a business. Its going to be more like a hobby or a side deal if you aren't going to go all the way. Trust me, once you figure out that self employeed people get taxed at nearly 50%, you aren't going to want to go legit. It is pretty expensive to start a business these days. Don't quit your day jobs yet. Especially in Minnesota. Now is not the time to invest in starting a detailing business up there. You will be under snow in a month and nobody is going to want someone going door to door with a wash bucket.
If you are serious about it then I would suggest talking to a local attorney who can set up the LLC and get you pointed in the right direction with the business license. Then hire an accountant to take care of the books. You'll also have to design work orders and receipts for your clients. I suppose if you have 3 or 5 thousand dollars to start up then you could get going pretty easy.
Sorry to rain on your parade. I know a thing or two about starting a business and it is a lot of work. It is not something that I would try doing without having money and a lot of time to put into it. The insurance alone is going to kill you.
If you are serious about it then I would suggest talking to a local attorney who can set up the LLC and get you pointed in the right direction with the business license. Then hire an accountant to take care of the books. You'll also have to design work orders and receipts for your clients. I suppose if you have 3 or 5 thousand dollars to start up then you could get going pretty easy.
Sorry to rain on your parade. I know a thing or two about starting a business and it is a lot of work. It is not something that I would try doing without having money and a lot of time to put into it. The insurance alone is going to kill you.
Big Leegr
Swirls?!?! NNOOOOOOO!!!!!
I've read that in the States there is no legally binding contracts allowed if a party is under 18 years of age....meaning nothing is legally enforceable should one or the other party disagree with the results.
The Fuzz
New member
That isn't true at all. Here is your free lesson in contract law for this week.
Elements of a valid contract are:
1. Offer
2. Acceptance
3. Consideration (ie what you are contracting for. Property, services, etc)
4. Legality of subject matter (The Consideration has to be legal for the contract to be valid.)
5. Contractual Capacity (If you were in a coma or drunk or mentally challanged, then the contract isn't valid)
6. Contractual Intent (If you thought you were agreeing to mow the lawn and then someone added a bunch of stuff about painting the house and repaving the driveway, then its not valid. You have to have intended to agree to the terms. You can't just slide in stuff in tricky ways.)
The thing with the age would arise out of the Contractual Capacity most likely. In the United States anyone who is under 7 years old is considered too young to enter into any type of valid contract. A 'child of tender years' is anyone between 7 and 14. Capacity could be argued strongly in that age bracket, but not always is a contract void because they are that age. It is going to be based on the particulars of the contract in question. People between the age of puberty and the 'age of consent' (usually 18, but sometimes younger) are considered to be minors. Minors are usually not bound to many types of contracts, but there are some that they can be held to. If you get married at 16 then you are going to be bound to the terms. If you enlist in the military at 16 then you will be bound to it. Those are facts. Typically when a minor is going to enter into a contract that may be binding, an adult is required to guarantee the contract. Kind of like a co-signer. Interestingly enough, contract law is a state thing. A situation that a minor could be bound by contract in Nevada may not be the case in Texas. I would consult a local attorney before signing anything as a minor just so you can know if the contract will be void or voidable. (voidable means it isn't necesarily binding)
In a situation like what this guy is talking about, I don't know where a contract would even apply. If you are hired to do a job and you don't complete it, then you are going to be taken to court for failure to provide services as promised. If it were any different then people wouldn't hire teenagers to work for them. Besides, the minors would be asking adults to sign contracts. Not the other way around. If the contract says "I will detail your car and you will pay me $200 dollars" then it is the client that is doing the signing. That would be the type of contract that would likely be enforcable even if it was a minor signing. Other types of contracts involved with starting a business would likely require the signature of an adult to guarantee the deal in case the minor flakes out and breaks the deal.
That is your contract law lesson for the day.
Please join us next week when we discuss tortious interference in business law. :naughty Sign up forms will be available in the break room.
Elements of a valid contract are:
1. Offer
2. Acceptance
3. Consideration (ie what you are contracting for. Property, services, etc)
4. Legality of subject matter (The Consideration has to be legal for the contract to be valid.)
5. Contractual Capacity (If you were in a coma or drunk or mentally challanged, then the contract isn't valid)
6. Contractual Intent (If you thought you were agreeing to mow the lawn and then someone added a bunch of stuff about painting the house and repaving the driveway, then its not valid. You have to have intended to agree to the terms. You can't just slide in stuff in tricky ways.)
The thing with the age would arise out of the Contractual Capacity most likely. In the United States anyone who is under 7 years old is considered too young to enter into any type of valid contract. A 'child of tender years' is anyone between 7 and 14. Capacity could be argued strongly in that age bracket, but not always is a contract void because they are that age. It is going to be based on the particulars of the contract in question. People between the age of puberty and the 'age of consent' (usually 18, but sometimes younger) are considered to be minors. Minors are usually not bound to many types of contracts, but there are some that they can be held to. If you get married at 16 then you are going to be bound to the terms. If you enlist in the military at 16 then you will be bound to it. Those are facts. Typically when a minor is going to enter into a contract that may be binding, an adult is required to guarantee the contract. Kind of like a co-signer. Interestingly enough, contract law is a state thing. A situation that a minor could be bound by contract in Nevada may not be the case in Texas. I would consult a local attorney before signing anything as a minor just so you can know if the contract will be void or voidable. (voidable means it isn't necesarily binding)
In a situation like what this guy is talking about, I don't know where a contract would even apply. If you are hired to do a job and you don't complete it, then you are going to be taken to court for failure to provide services as promised. If it were any different then people wouldn't hire teenagers to work for them. Besides, the minors would be asking adults to sign contracts. Not the other way around. If the contract says "I will detail your car and you will pay me $200 dollars" then it is the client that is doing the signing. That would be the type of contract that would likely be enforcable even if it was a minor signing. Other types of contracts involved with starting a business would likely require the signature of an adult to guarantee the deal in case the minor flakes out and breaks the deal.
That is your contract law lesson for the day.
Please join us next week when we discuss tortious interference in business law. :naughty Sign up forms will be available in the break room.
Scott P
New member
The Fuzz learned his lessons while he attempted to start "Bitchin' Smooth Camaros" in the mid eighties. :rofl
The Fuzz said:
Very well put Fuzz! And thats just to open the doors--throw in Utillities, and just the chemical bill alone--BANG there is another thousand. EVERY MONTH---Plus if you work your guts out and need a employee -- a whole other bag of worms money wise.
Then you have to smile and treat the custmer with respsect when they ask you how much to detail an engine and you tell them $30 bucks and they gasp and say--i would like to make 30 an hour--
it's hard to describe to folks that your gonna use $8 or $9 bucks of dressing, all purpose or degreaser chemicals with your $800 dollar pressure washer thats using gas at $2 bucks a gallon in a building that cost $600 a month--so that when it's all said and done "YOU" end up "paying" A $5 dollar "LOSS" at the end of the month to clean there toyota camry motor so that they may come back--lol but thats my take on the "easy money to be made in your own shop"
kimwallace
New member
Keep in mind too that even if you do it on the side, you need to report your earnings to the IRS. You can actually operate under you own name (for tax purposes) and claim expenses for the business as well as earnings. If you are going to get serious about this, even out of your house, do not forget to buy liability insurance.
Fuzz is right (sucking-up) It is expensive to start a business plus all states have different laws and regulations that need to be followed. You don't want to be like the little girl, whose lemonade stand was closed down because she didn't have the proper permit.
Fuzz is right (sucking-up) It is expensive to start a business plus all states have different laws and regulations that need to be followed. You don't want to be like the little girl, whose lemonade stand was closed down because she didn't have the proper permit.
Holyghostfilled
New member
:yeah ...and so much more. Read an article in Bettercarcare.com that explains pros and cons on Mobile, Fixed or Temp Detailing.....I just don't have $50,000.
When I head of Poorboy's products...I jumped :dancin :jump thinkin that they actually made a product just for me... :rofl :lmfao
Good job Professor Fuzz:fuzz Sad :brick but true...my .01(can't afford the other cent)
:ghost
When I head of Poorboy's products...I jumped :dancin :jump thinkin that they actually made a product just for me... :rofl :lmfao
Good job Professor Fuzz:fuzz Sad :brick but true...my .01(can't afford the other cent)
:ghost
The Fuzz
New member
TDMAN said:
Even doing a good job won't always protect you. Having some kind of waiver for certian jobs is recommended to protect yourself. There are people just dying to find someone who isn't protected legally show up and offer services. If you mess the paint or drop the garage door on an $80,000 car, then you better hope that you are either insured or rich, because that client may very well sue. The saying "business is hell" is out there for a reason. its all fun and games when you are detailng cars for friend, family and co-workers, but they are not the people who will likely sue you for damage. Always be prepared for the consequences of operating without a business licens or insurace or waivers if you are going to proceed in that way.
Luv-N-It
New member
The Fuzz said:
So true...
brwill2004
Proud Resident Of Detail City
Pappy- You are an entrepreneur just like I am. Take it one step at a time, but dont give up. Contact your local government and find out what you need to do to become legit. You might have some trouble because of your age. You can still keep track of your revenue and expenses for tax purposes if you like. Stick with your goals, and dont change them because people discourage your. In the long run the hard work will pay off.
shotime
Privitize it
Not saying you aren't good, but you also need a lot of experience and some type of business sense. Just because you're a good detailer doesn't mean you'll be a good businessman. What I would do is try and get a job at a dealership or a detail shop and learn everything. Pay attention to not only the skills you might learn, but how the business is run. If you don't plan on going to college full time, take some part time classes in economics, business management, marketing, communications, etc. that will help you in your business. While you're doing that, put money away to buy equipment/rent and have cash reserves for unexpected expenses. Most businesses take 3 years to get off the ground. This was my first year, next year I'm going under a business name and doing some advertising and the next I want to be 100% on my own.
zainoshine
Don't forget the pedals!
So if I wanted to do families and friends, word-of-mouth customers, be semi-mobile, and do about 50 cars a year, what would I need to do? I was thinking of cards and to register a business name, but do I need insurance and the other big expenses? In other words, would the government come after me if I had a business as above, had a registered name, but didn't be an LLC? This is confusing to me..
Carl
Carl
brwill2004
Proud Resident Of Detail City
You do not need to be an LLC. LLC, however, gives your business some liability protection. It is definitely not necessary. In my opinion a business license is easy to obtain and necessary. Insurance is not necessary either, but just be aware of the risks of operating with out insurance. Register your business name also. This is also an easy process.
The Fuzz
New member
How can insurance not be necessary? If you mess up somebody's car then there could be thousands of dollars worth of damage. I'm not talking about you messing up the car. I'm talking about an act of god. What if the garage collapses on the car? What if your mom backs into it while you aren't looking? What if it gets stolen? The owner could very well claim that you caused a lot of damage that you didn't do. You don't carry insurance because you are safe and nothing can happen as long as you continue to be safe. You carry insurance because the rest of the world are screw ups and will mess up the car if they have the chance. If you are going to go get a business license and go through the trouble of registering the business name, then some kind of insurance is necessary. You may not ever have to use it, but that is why you have it. How often have you had to use your car insurance? It would be safe to say that most of us have paid way more out in premiums than we have ever gotten back. You carry insurance so you have some kind of safety net in case you cause more damage than you can fix or pay for.
The next person to suggest that insurance isn't necessary or recomended is going to get the axe, because that has to be the worst advice you can possibly give somebody. That was the final nail in Mirrorfinishman's coffin and I'm not shy about doing it again.
If this is just a hobby then there isn't a need to go too overboard. You are going to be working with friends and close referals. I would still check into insurance just in case something goes wrong, but out of all the things you need I'd say that the business license and insurance are the two things you shouldn't probably operate without. Your city could shut you down without a license. Will they? Probably not, but I'll bet the girl with the lemonade stand didn't think she would get shut down either. Its the law and it can be enforced.
Setting up as an LLC would be a good idea if you plan on making some real money. The purpose for an LLC versus a DBA is that if you get sued for damage, then the LLC would go bankrupt and your personal assets would remain safe. Probably not much of a concern for a guy under the age of 18, but it is a concern if you are going to be making some real money at this. The more cars you do opens you up for more liability.
There is a saying that goes 'business is hell'. Truer words were never spoken. This is not a game to be taken lightly. There are rules that have to be followed. If you want to jump in this pool, then you better make sure you can swim. There are sharks in these waters and nasty things that you don't want to be surprised by. Make sure you go in with your eyes open and have all the facts. Starting a business is not a hobby. It is a business. If you want to do it as a hobby then that is different. Get some business cards and flyers printed up and go for it. Starting a business is if you plan on making some real money at this and you want to protect yourself and your assets. It is expensive and time consuming. I would suggest taking a business managment class of some sort at the local community college or something for some good pointers. Its a lot more complicated than just getting a business license.
The next person to suggest that insurance isn't necessary or recomended is going to get the axe, because that has to be the worst advice you can possibly give somebody. That was the final nail in Mirrorfinishman's coffin and I'm not shy about doing it again.
If this is just a hobby then there isn't a need to go too overboard. You are going to be working with friends and close referals. I would still check into insurance just in case something goes wrong, but out of all the things you need I'd say that the business license and insurance are the two things you shouldn't probably operate without. Your city could shut you down without a license. Will they? Probably not, but I'll bet the girl with the lemonade stand didn't think she would get shut down either. Its the law and it can be enforced.
Setting up as an LLC would be a good idea if you plan on making some real money. The purpose for an LLC versus a DBA is that if you get sued for damage, then the LLC would go bankrupt and your personal assets would remain safe. Probably not much of a concern for a guy under the age of 18, but it is a concern if you are going to be making some real money at this. The more cars you do opens you up for more liability.
There is a saying that goes 'business is hell'. Truer words were never spoken. This is not a game to be taken lightly. There are rules that have to be followed. If you want to jump in this pool, then you better make sure you can swim. There are sharks in these waters and nasty things that you don't want to be surprised by. Make sure you go in with your eyes open and have all the facts. Starting a business is not a hobby. It is a business. If you want to do it as a hobby then that is different. Get some business cards and flyers printed up and go for it. Starting a business is if you plan on making some real money at this and you want to protect yourself and your assets. It is expensive and time consuming. I would suggest taking a business managment class of some sort at the local community college or something for some good pointers. Its a lot more complicated than just getting a business license.
brwill2004
Proud Resident Of Detail City
If the moderators are going to ban people for saying insurance is not necessary, than I dont want to be a part of Detail City. Fuzz, you contribute more off topic garbage than you do deatailing knowledge anyways.
Go legit on taxes and Licenses--Get Insurance (even if it is a rider on your home insurance) -maybe $400 for a 350k policy and cover your butt-- you will be the better for it in the long run!
brwill2004 said:
The Fuzz isn't going to be banning anyone for saying anything about insurance. I apologize for his comments and I will take care of this situation.
I do disagree with you on two things.
1. Fuzz has helped me alot behind the scenes in making Detail City what it is today. That is a huge contribution to the car care industry.
2. Insurance is very necessary and anyone that conducts business without adequate insurance is playing Russian Roulette with their financial security.
Dwayne