The legality of setting up a catering business: comply with all legal requirements
Website design By BotEap.comChoose the type of business structure
Website design By BotEap.comAs you start catering, you may notice your income increase over time, especially when you cater to corporate functions. Of course, this is good news for your business, but all your efforts will be in vain when you are flagged by the government authority for operating an unregistered business. Therefore, it is very important to decide on the type of business structure and then proceed with registration. For example, in the US, the IRS will red flag a caterer who earns more than $600 without being incorporated.
Website design By BotEap.comThe business structure chosen will depend on how you want your business to be taxed and what liabilities you can risk. HAS Single owner company implies that you, as the owner, are responsible for any unfortunate incidents in your operation. This is more risky compared to limited liability catering and corporations. Remember that you will be serving food to the public, so it would be best to opt for a commercial organization that can protect your own personal assets against any lawsuits.
Website design By BotEap.comThe limited liability company releases the owners from personal liability for debts or any liability incurred by the business. This corporate structure is a combination of general partnership and corporation. Corporations are seen as the structure with the most advantages when starting a business because they have their own identity before the law. It exercises all the rights of a person transacting business and is governed by a board of directors.
Website design By BotEap.comSo what business structure will you choose?
- Single owner
- General Partnership
- Corporation
- limited liability company