Why Do Business With Registered Businesses?

Many of you have heard me talk about the benefits of doing business with local companies.  More of your money stays here in the local economy, instead of going to Texas or some other state.  That means that for each dollar you spend, you are supporting your own infrastructure – roads, parks, schools – just because you are helping keep more money here.


One thing to keep in mind, though, when seeking out local companies, is to make sure that they are actually registered to do business.  Why is that important? You might ask.  You know why it is important for you to be registered as a company – potential tax benefits, protection of personal assets, primed and positioned for growth.  But what about the companies you work with?  Why is it important that your independent contractor be a company and not just a person?

  1. Taxes.  I know. It all comes back to this.  If you hire an independent contractor in your business and that person is a person, the state may consider that person an employee – and hold you liable for additional taxes and withholdings.  If that person is a single member LLC or other defined entity, it is much clearer to the state that the person is in fact an independent contractor and not an employee. (And yes, use agreements with independent contractors!)
  2. Liability.  If the person is not registered to do business with the state, how are you going to find them if something goes wrong?  We’ve all heard about the contractor that walked off the job, leaving the homeowner or business owner with nothing but a disconnected cell phone.  If the person has registered with the secretary of state, they have given an address and other information that will allow you to find them in the event something happens.
  3. Commitment.  This is a generalization, a stereotype, if you will – but it is generally true.  People that are serious enough about their business to register it with the Secretary of State are committed to doing the work and building a customer base.  They are perceived as a more secure way to do business – especially if that transaction involves a large deposit on your part.

So, be serious not just about your own business, but also about the companies you do business with.  Both strategies protect your bottom line.  Oh, and while you’re at it – Buy Local!


(c) 2014 KJD Legal

By |2014-04-08T08:27:02+00:00April 8th, 2014|Uncategorized|0 Comments

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