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LLC, Inc, EIN, etc.

Discussion in 'Business Fundamentals' started by glenspot, Aug 16, 2004.

  1. glenspot

    glenspot Senior Member
    Messages: 255

    What has your experience been regarding the set up of your snow removal "company".

    Do you operate it just as an extention of your personal life, "Glen's Plowing"

    Do you set up an LLC, "Glen's Plowing, LLC"

    Do you set up an corporation, "Glen's Plowing, Inc.'?

    I want to start out the right way. I currently have insurance companies setting up quotes for me. They suggested a commercial use policy for my truck, but at least one company didn't think that a Commercial Liability policy was necessary.

    What about licenses? I called my township clerk where I live and she said that a "business licence" wasn't needed. How do you say you are "licenced and insured" if you don't need a license to do business?

    Also.. I don't plan on hiring anyone yet...just ME doing the plowing, etc. Do i want to get an EIN?

    My feeling on that is... if i get an EIN for the company....it sort of starts it out on a financial path of its own. Am i right?

    Thanks for your help.

  2. derekbroerse

    derekbroerse 2000 Club Member
    Messages: 2,377

    Well, I would ASSUME that having a valid driver's license would make you "LICENSED".... I have contractor's insurance just for plowing too, but I can see people claiming to be "INSURED" just by having their truck covered. There are a lot of amateur plowers around who either don't know about or care about being insured.

    I wish I knew more about the business aspect of it, but up here in Canada everything is different anyways... so I'm still learning too.
  3. Flipper

    Flipper PlowSite.com Addict
    from CT
    Messages: 1,180

    In many states, landscaping, plowing contstruction is liscensed through the state. Costs me $100 a year to be registered and have a number. This will help you if you have to go to court etc. Many do not have this liscense and I would say starting out to just get insurance and run for a year as an extension of personal life. Then if you are successful you can move forward.
  4. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Glen, LLC; Inc etc are for tax & liability purposes. Check with your tax preparer for the best thing for you to do. For me, just having Mick's Snow & Ice is sufficient, especially since I have no employees. LLC etc is often to separate you from your company for liability purposes. But I've found that forming a corporation will not relieve me from personal liability, but this may be different in your state. Check with your attorney.

    "Licensed and insured" - some communities require a business license/permit. Check with each community in which you intend to perform services. If the Town Clerk says you don't, then you don't (and can't). For advertising purposes, you might say "fully insured". General Liability (business insurance) and Commercial Vehicle Insurance are highly suggested. There have been several threads regarding these. Some have said State Farm will insure vehicles while performing plowing operations - I'd suggest getting this in writing FROM THE UNDERWRITER (not the agent). Also, make sure your policies specify "Commercial Vehicle" and on the General Liability specify what type of accounts are covered (residential only, residential and commercial etc). Mine specifies Residential. I have a letter from the Underwriter that commercial is also covered as long as I maintain more Residential than Commercial accounts. The important thing is that it's from the Underwriter. They do not have to honor what the agent SAYS or even puts in writing (which they usually won't do, anyway). Have the agent who doesn't think a Commercial policy is neccesary put it in writing that you will be covered for any loss occuring as a result of plowing or other services you intend to offer and that XXX company will assume any liability resulting from any loss to any person or entity.

    Simplified - Commercial Vehicle insurance covers you while in the act of plowing. General Liability covers you after you leave (ie: slip and fall injuries).

    There is no use in getting an EIN at this point. That can be done when the need arises. Same for Workman's Comp.
  5. T-MAN

    T-MAN PlowSite.com Addict
    Messages: 1,363

    Glen first and foremost pick your company name. Then you can register it with the county your in. They should send you your buisness liscense. A cool looking certicate that will cost you a few bucks. I know here in IL. I had to run an ad for 2 weeks in the classifieds, under public notice, cost me around 100 bucks. This just states if someone else allready has the name you have chosen they need to speak up now. Next step open up a checking account in your new company name. Keep your personal checking and buisness stuff seperate. As far as insurance go's good luck, I guess it boils down to what your profit margin will allow you. At the very least I would suggest a general liability policy.
    Hope this helps a bit.
  6. glenspot

    glenspot Senior Member
    Messages: 255

    Thanks everyone

    Thanks for your advice everyone, it helps.

  7. rainair

    rainair Senior Member
    Messages: 153

    state License, what states require? does yours

    I am looking for information on what states require a state License to plow snow. how the law is written and anything I can get as in info
    does your state or local government require one?

    this is my message and I approve it
  8. glenspot

    glenspot Senior Member
    Messages: 255


    A search of the Michigan.gov website says that you do not need a license for "Snow Removal".

    The only time this has come up, is recently when I bid a couple of group homes. The Mental Health Agency said that they wanted a "Licensed and Insured contractor".

    I had to explain to them that I am not a "contractor", but a "Snow Removal Company". They seemed to understand the difference. But, we'll see.