Wednesday Dec 01, 2021

The legality of setting up a catering company: comply with all legal requirements

Choice of type of business structure

As you start offering catering services, you may find that your income increases over time, especially when you are engaged in corporate functions. Of course, this is good news for your business, but all your efforts will be in vain when you are singled out by the governing authority for operating an unregistered business. That is why it is very important to decide the type of business structure and then proceed with the registration. For example, in the US, the Internal Revenue Service (IRS) will alert a vendor who makes more than $ 600 unincorporated.

The business structure chosen will depend on how you want your business to be taxed and what liabilities you can risk. TO Single owner business implies that you, as the owner, are responsible for any unfortunate incidents in your operation. This is riskier 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 business organization that can protect your own personal asset against any lawsuits.

The limited liability company releases 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 considered the most advantageous structure when starting a business because they have their own identity before the law. It exercises all the rights of a person conducting business transactions and is directed by the board of directors.

So what business structure will you choose?

  • Single owner

  • General Society

  • Corporation

  • Limited liability company

Preparation of contracts and obligations

A business contract with a customer will include the main services to be offered, how these services will be offered, and how they will be paid for. This will provide you with some form of protection if something goes wrong. The contract must be well detailed. Agree who will hire the venue and take responsibility for the damages.

Prioritize licensing

Some states have different types of licenses, so select one that suits your business structure. Also, you should look for the food service license and the liquor license.

Understanding health codes

There are health rules about how food is prepared and handled. All of this is done to ensure that catering service providers provide customers with high-quality, risk-free services. Hire a consultant to make sure your equipment meets established standards and your employees are well trained to comply with health rules and regulations.

Asset protection

There are many risks associated with catering businesses: fire, food poisoning, and other hazards. Insurance will help you deal with these risks. Buy a policy that covers all of these incidents. Seek advice from experienced caterers on what type of policy best suits your needs.

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