Start & Run a Home Cleaning Business. Susan Bewsey

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СКАЧАТЬ tax department, as well as pay any local and state/provincial business taxes. In the United States, businesses can register with the Internal Revenue Service (IRS). If you hire employees, you must also pay social security tax according to the Federal Insurance Contributions Act (FICA). Depending on where your business is located, there may be other state requirements such as workers’ compensation and disability insurance. Contact the irs for the most up-to-date requirements.

      In Canada, your business must comply with all applicable federal, provincial, and municipal laws. Businesses may apply to the Canada Revenue Agency (CRA) for a provincial or federal tax number which grants exemption from payment of tax on goods for resale. Businesses with gross revenues over $30,000 must charge 6 percent goods and services tax (GST) on the goods and services they provide. Every business must pay 6 percent GST on anything it buys. You can register with CRA for the GST, which allows you to recover any GST that you spend on business purchases.

      As an employer, you are also responsible for remitting Employment Insurance (EI) and Canada Pension Plan (CPP) or, in Quebec, Quebec Pension Plan (QPP). Some provinces also require that businesses pay all or a portion of their employees’ provincial health insurance premiums. Check with CRA and your provincial tax office for the latest information.

      4. Choosing A Business Name

      Naming your cleaning service is a very important step in setting up your business. It reflects what you do and what type of business you run, and it will be on your business cards, stationery, and advertising, and possibly online, so choose a good name.

      Write down every name you can think of. Then narrow your selection down to three favorites, with the name you like best at the top.

      There is a good reason to choose three names. Before you register your business, do a name search to make sure that no other business is using the same name. You can do this by scouting your local Yellow Pages, newspaper classified ads, trade journals, and special-interest publications. Check out all three of your company name choices. This way, if your first choice doesn’t work out, you already know if your second choice is available. Before you invest in stationery, advertising, and business cards, be absolutely sure that you can legally use the name.

      In the United States, county or city clerks can do a name search for you. In Canada, a name search can be done through the provincial ministry responsible for corporate affairs. For your own protection, it’s a good idea to register your business. Chapter 5 has more information on choosing a name appropriate to the image you may want for your business.

      5. Choosing A Business Structure

      There are three basic forms that you may choose to commence business under:

      (a) Sole proprietorship

      (b) Partnership

      (c) Corporation

      5.1 Sole proprietorship

      Under a sole proprietorship, a business is owned by one person. The owner may employ other people but has sole personal legal obligation for all the activities, or, “unlimited liability.”

      The advantage of being a sole proprietor is that such a business is simpler to set up than a corporation. A one-person operation also makes for speedier decision-making, and it is easier to keep financial and technical matters confidential. As well, it is easier to diversify or close the business.

      The disadvantages of having a sole proprietorship are that it may prove too limiting a structure as the business grows beyond the abilities of a sole owner or operator, there may be higher tax implications, and it may be difficult to obtain financing. Personal liability also makes such a business a greater risk.

      5.2 Partnership

      A partnership is a business jointly owned by two or more persons. In a general partnership, all partners are personally liable for all obligations of the company. A limited partnership, however, is liable only up to the amount of equity invested.

      For the home cleaning business, the advantage of having a partnership is that the energies of two people enhance the business, since partners can share strengths and counter weaknesses. There is also generally a better credit risk in the case of financing.

      The disadvantage of a partnership is that personality clashes may occur, causing disruptions. It may also be difficult to sell or transfer ownership in the business.

      5.3 Corporation

      A corporation is a business entity which acts as a separate and legal person, owing to legal setup. Generally, private investors (shareholders) have less exposure to liability since any risk is limited to what they have invested.

      For a home cleaning business, the advantage of this structure is that it has the ability to raise capital or bank support for large projects. There can also be tax advantages, and principals generally are exposed to the limit of their investment in the case of business failure.

      The disadvantage is that incorporation fees are expensive, and it is necessary to have professional tax planning advice to maximize any corporate tax breaks. As well, annual reports are required, and information is available to the general public, which is not always desirable.

      Your decision about which legal structure to adopt should be based on the following considerations:

      • How much and what kind of financing is required?

      • What is the degree of technical skill required to run the business?

      • Is there a need for outside expertise?

      • Is there a need to separate business and personal life?

      • Is there a need to protect business and personal assets?

      • Will there be a need to sell stock or shares in the company?

      • What structure feels best to you?

      6. Professional Services: Your Lawyer And Your Accountant

      The time will come when your business needs the advice of an accountant or a lawyer. A lawyer is invaluable if you are sued, need advice on business law, have to sign a contract, or want to enter into a partnership agreement. A good accountant will make sure your business can take advantage of favorable tax laws and comply with all other requirements for reporting income.

      Finding the right person is important; the best way to find a good lawyer or accountant is through referrals. Ask your friends who are in business who they use and if they are pleased with the services provided. Your banker is also a good person to ask for a recommendation.

      Once you have selected your lawyer, take steps to keep legal costs in line. Lawyers bill for their time, so write down your questions before you meet with your lawyer. Don’t call without a reason and don’t ramble on about the weather. It pays to be organized; always have the right documents at hand.

      Prepare a list of questions. For instance, you’ll want to know the following:

      (a) Do you have previous experience in advising a small business?

      (b) СКАЧАТЬ