Legal Question in Business Law in New York

Re: Required permits, licenses etc.

Most of your liability issues can be resolved in a contract with your customers. Referral services typically disclaim any responsibility for the work of the service providers but you would need to make that point clearly and effectively.

I am not aware of a need for a referral business such as the one you describe to be licensed or insured in NYS but you may want to check with NYS Governor's Office for Regulatory Reform website at http://www.gorr.state.ny.us and with NYC Department of Consumer Affairs' website at

www.nyc.gov/html/dca/home.html if you are located in the city.

You do want to have liability insurance in any event and should consider creating an entity, such as a corporation or limited liability company, for your own protection.

Finally, whether anyone needs a DBA or tax id depends on its legal form and its name.

Contact a business lawyer to get a proper contract drafted, to assist you with the creation of an appropriate business entity for you and to advise you on the conduct of your proposed business generally.

This reply is in the nature of general information, is not legal advice and should not be relied on as such.

Re: Required permits, licenses etc.

Mr. Frenkel's response is a good one. I would add that you want to be sure the workers you refer have their own insurance to cover themselves, and, if they have employees, make sure you see that they comply with the statutory insurances (worker's comp & statutory disability) and their I-9 forms are in order.

1. If someone does carpentry, maintenance or cleaning, do they legally need a DBA, Tax ID, license or any other permits or documentation?

Legally, one does not usually need to have a DBA or a tax ID to do business if one is doing business in one's own name. If a person were to do business as anything other than their own name, then yes, they need a DBA or other entity bearing that name.

On a practical level, it's a good idea to have an EIN (tax ID) for a business for a couple of reasons: first, it sets the business apart from the individual for tax purposes; second, the individual can give the EIN out freely to vendors and customers (this is unwise to do with a social security number for identity theft reasons).

Getting an EIN can be done online for a DBA or a corporation; LLCs have to make a short phone call to the IRS to get one, and the number is issued immediately.

2. If so, is it my responsibility as a referral service to make sure these people have the correct documentaion?

That depends on the type of referral service you run. You should certainly do your due diligence and run a fast background check on the workers you refer; I'd start with criminal records and a credit report on their business and on them personally.

3. Do I as a referral business need any to carry any particular insurance?

General business insurance should do it, but speak with your insurance carrie.

4. If I refer someone and there is a problem between the person I referred and the handyman, am I in any way legally responsible?

Depends on the problem and on the contract between you and the person to whom you are referring the worker. You can disclaim any responsibility in your contract, but do that in an obvious and clear way.

You should have a business attorney draft your contracts for you, and then just use them as forms. Please feel free to contact me if you wish to pursue this further.

The information given here is general in nature; it is not intended nor should it be construed as legal advice. For advice concerning your particular situation, consult your attorney.