I need to make my business legal, and I have a lot of questions...

Hi everyone,

I've been researching this for quite some time now, but I still have a lot of questions that need to be answered. I don't have a college education regarding owning and operating a business. I've been talking to a lot of different breeders, but I still can't get clarification, nor do I really understand everything that is needed to know. I've also been looking on the IRS website for answers. I guess I should also mention that I need information for New York and Arizona. I live in New York now, but am planning on moving back to Arizona in a few years.

Anyway, the best solution I could come up with is to hire a lawyer that is educated in businesses selling reptiles. I need to know everything from start to finish, how to file my business taxes, understanding receipts; everything... I want to make my business 100% legal, and live by that as long as it exists.

If anyone can help me, please do.

I recently saw an advertisement (on this website) for a lawyer educated in my type of business. If anyone knows who that was, please let me know.

You can contact me through this board (via post or email), or you can visit my website and fill out the contact form with all of the information you have for me.

http://www.diapsid.com/contact.php

Any and all information will be greatly appreciated.

Best regards,
Dustin J. Cox
Diapsid

P.S. I believe the business structure I should be using is a Sole Proprietorship. However, I was told by another business that if I sold a snake that then bit a person, they could sue me personally. I was told that a small corporation (he called it a "s corporation;" I'm assuming s equals small) prevents that from happening. Like I said, I need a lawyer... *sigh*

Hey Dustin...didn't realize you had already left!
Your local city/state gov't office has a great small business section...they send out everything you need in a pamphlet, and walk you through it...you don't need a lawyer to set up a small business !
You are also going to need to get your IRS # set up first...feds !!!

Call your local Small Business office...they are great!

greg

Someone please correct me if I'm wrong, but I think whoever told you that you could be sued for a snake biting someone after it is no longer in your ownership is full of hot air. The only POSSIBLE way I can see this scenario is if you sold someone a "guaranteed venomoid" (which is a whole other discussion ENTIRELY) that you guaranteed could never produce venom, and then it DID and bit someone and made them seriously ill or killed them....THEN I can see it. Snake bites can and do happen.....unless you are silly enough to guarantee the new owner it won't bite, I don't see it happening.

As for the other info you are looking for, I agree your local small business agencies, chamber of commerce, etc. are the best starting point.

Originally Posted by Cat_72

Someone please correct me if I'm wrong, but I think whoever told you that you could be sued for a snake biting someone after it is no longer in your ownership is full of hot air.

You'd be surprised... although I think what is more likely is for someone to be bitten while choosing an animal at the facility or at a show. Regardless, incorporating is always the better option in a high-risk business... your personal assets are protected in the event of any legal action against the corporation, whether it's a "something bit me" lawsuit or anything else.

Never ever own a business under a sole proprietorship, or a partnership. Always form a Corporation, eithern an LLC, or an S-Corp. They are cheap and easy to start, and they protect you personally as long as you follow the rules. All the education you need can be found on the web for free as well. Trust me on this one...form a corporation.

S~

I gotta second what Steve said. Operating as an S-corp or a LLC keeps your personal assets and liabilities separate from your company's. In the event a sole proprietorship is sued, the owner's assets are also considered to be fair game. Assuming it plays by the rules, the liabilities of a corp are limited to its assets only, and not that of the officer(s).

Additionally, it helps in terms of obtaining credit in your business' name. Creditors are more apt to offer a line to a corp or a llc than they are to a sole proprietorship. Incorporating, although it doesn't require much effort, sends a message that you're serious about your business and plan to be around long-term.

Building a business credit file isn't especially hard, but it does take some time. Most of us here are off to a good start, as Fed Ex, UPS, and DHL all report to either D&B or Experian. Having credit in your business' name can be worthwhile if it's used responsibly and not intermingled with your own.

Just a word of caution if you eventually want to get a DUNS number. D&B reps can put the worst of the BOI bad guys to shame. Contact me before you apply and I'll let you in on a quick and painless (but most importantly, free)way of getting a DUNS number and establishing a credit file while avoiding their high-pressure push to sell you a completely unnecessary $500 service.

Well, a LLC is certainly the best way to go, but the paperwork involved in SUCH an incredible hastle.
A sole proprietership leaves you without your rear covered, but it doesn't have so much interminable record keeping and reporting involved, either.
I think it really depends on what you're doing. I have a few pairs of leos...I'm a small hobby breeder. I may get a business license so I can get Fed Ex certified, but it is really worth it for me to go to the trouble of setting up a LLC?
At least, this year?
$25 has me a business--I can get my Fed Ex account set up, I can buy supplies for wholesale prices, and I'm all set.
Now, if you have thousands of dollars worth of animals, and you're planning to do thousands in sales each year, then a LLC makes sense.

Cassandra,

If I were to purchase one of your Leos, and my son got Salmonella, and I could prove to a jury that the disease came from the Leo (this isn't hard to do) I could take your business, but also come after your personal bank account, your husbands account (if you have one), your house, your car, your boat, all your stuff could be mine. With a reptile business, you are at MUCH higher risk than if you were selling velcro wallets. If you were selling wallets in your spare time, I would agree with you, but what you sell (reptiles) carries a stigma with alot of people in this country. You have a better chance of losing court battle because of it. Better to be safe and deal with the hassle, than have to deal with the destruction a litigious little pain in the ass person can cause you.

Shawn

Wow! I'm amazed with all of the responses. First I must apologize for not responding sooner. I hadn't setup the auto-subscription and I was not receiving any auto-notify emails.

Greg, thanks for the info on the small business stuff. I had already contacted the New York Small Business place and they sent me a packet in the mail. It has a lot of great information. I also looked on the IRS website and they have online classrooms that can help me too.

Mister Internet, Ken, 7x7trev (and others):
Thanks for all the great information. I'm glad I can get some clarity on the corporations. I really need to get started as soon as possible because I should make a nice income with my animals this upcoming season.

What is "DUNS?"

Also, here is a good question. If, in my terms, I state that I cannot be liable for salmonella, bites, etc., can I still be sued? Is getting a lawyer still a good option, or can I find everything I need to start my corporation online?

Once again, thanks for all the info.

Best regards,
Dustin J. Cox
Diapsid
http://www.diapsid.com/

If you own a business you will most likely be sued at some point, it's as simple as that. Protect yourself now by going with an LLC or S-corp. If you are sued and lose your business it sucks but its not as bad as loosing your house should your sole proprietorship be sued.