Legal Question in Business Law in New Jersey
Small business (mobile motorcycle detailing)
I am starting a mobile motorcycle detailing business from my home part time. I would like to know what business structure would best protect my business assets as well as my personal assets, Sole Proprietorship, S Corporation, or LLC? And what type of insurance would best suit that structure?
3 Answers from Attorneys
Re: Small business (mobile motorcycle detailing)
The Limited Liability Company would be your best business structure in New Jersey. It is treated as a "disregarded entity" for federal and state tax purposes yet you have liability protection similar to a corporation. I have more information on Choice of Business entity on my website at www.taxesq.com
I hope this helps!
Ron Cappuccio
Re: Small business (mobile motorcycle detailing)
An LLC is almost always the best choice for a small company where the owners intend to earn money through their own work (as opposed to putting their money to work). There are exceptions, but I don't think that your business would be one of them.
Insurance is a more complex issue and difficult to fully assess in a Q&A forum. You won't need workers comp if you don't have employees other than yourself. It probably will help for you to know that your homeowner's insurance will probably provide you with some coverage for limited business use of your home. Look at the risks that you have and see what insurance will protect you. Since you will be working with at least some amount of gasoline, be sure to have a spill kit available because no one will insure you against gasoline spills in any way that you can afford and the DEP will hammer you if you get any detectable amount of volatile organics in the ground.
My firm handles new business starts. If I can be of further help to you, call or email.
See also: http://info.corbettlaw.net/lawguru.htm
Re: Small business (mobile motorcycle detailing)
As the other attorneys have commented, an LLC may be a good choice, but there are several other considerations before selecting the LLC. For example, do you plan on having additional owners of your business in the future? Are you comfortable estimating and paying your taxes on a quarterly basis, or would you rather have your taxes withheld and paid every time you pay yourself a salary? (The LLC requires the former.) There are several other areas to consider, as well.
I would certainly consider commercial general liability insurance, but there may be others that make sense as well - you should talk to a commercial insurance broker.
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