always_learning
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Yes i am writing a paper for school and was wondering what some of the legal issues a person faces when starting a computer repair business.
Business Legalities
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always_learning
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Ok thanks are there local permits you would need when I google this stuff I get mostly repair shop or colleges.
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Hope you don't mind me asking, but as your at school, how old are you?
always_learning
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39? That is relevant how?
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We have a minimum age requirement of 16. Part of the forum rules.
Thanks for replying.
Thanks for replying.
always_learning
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Lol well I am age just lost in a business class. I have worked construction 20+ years and am looking to make a career change. So I enrolled in college for Information Technology. While I may know quite a bit about computers, I know very little about business, So here is my project in a nutshell. We are in a group and have been assigned to make a business plan. We divided it into 3 parts and my 3 are Size, legal, and benchmark. I can cover the size lol that is about it so any thoughts on benchmarks and legal issues would be appreciated.
always_learning
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Legal issues to include software licenses
Permits
Company name
Guarantee on services
are some I have thought of but I dont really know.
Permits
Company name
Guarantee on services
are some I have thought of but I dont really know.
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Permits (as I'm not from the US, I'm only hazarding a guess here), inc residential permits, if your working from home. Bus permits.
Insurance, public and professional indemnity.
Ensure your legal in terms of what your installing. I.e you don't supply and or install pirated software.
Guarantee of services, isn't really a requirement as such. Although warrantying products would be.
Services, as in, you do a virus removal, yes i suppose you can guarantee that the virus is removed. But you can't really guarantee that the client would not get infected again
.
Benchmark. Sorry I don't understand what you need on this one.
Insurance, public and professional indemnity.
Ensure your legal in terms of what your installing. I.e you don't supply and or install pirated software.
Guarantee of services, isn't really a requirement as such. Although warrantying products would be.
Services, as in, you do a virus removal, yes i suppose you can guarantee that the virus is removed. But you can't really guarantee that the client would not get infected again
.Benchmark. Sorry I don't understand what you need on this one.
altrenda
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emsbronco
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Liability Insurance
Errors & Omissions insurance
Employee Comp and unemployment
Employee Taxes
Benchmarks -
look at average ticket price, you could break it out for sales tickets and labor tickets.
recurring revenue if selling managed services or contract labor
profit per ticket
sales per hour, profit per hour per employee
Local laws - like California has the BEAR registration requirement.
If you're going to do wiring, do you need certified staff and permits for low voltage wiring in that area?
Licensing for security alarm and camera installations, if that will be part of your services.
Zoning, signage laws
Errors & Omissions insurance
Employee Comp and unemployment
Employee Taxes
Benchmarks -
look at average ticket price, you could break it out for sales tickets and labor tickets.
recurring revenue if selling managed services or contract labor
profit per ticket
sales per hour, profit per hour per employee
Local laws - like California has the BEAR registration requirement.
If you're going to do wiring, do you need certified staff and permits for low voltage wiring in that area?
Licensing for security alarm and camera installations, if that will be part of your services.
Zoning, signage laws
always_learning
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Hey thanks a lot guys this really helped
Markverhyden
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First one needs to define how the business will be organized. Sole proprietor, limited partnership, etc. That defines the necessary filings. I'd venture a guess that even a sole prop operating under their own name will still need to file a DBA pretty much everywhere.
Then licenses as needed. Luckily the computer repair business is nowhere near as regulated as construction. But there are still "gotchas". Some are well known like BEAR in California. Others are not as well known. Several years ago in a similar discussion several techs from Texas said that, officially to be legal, doing data recovery requires some type of private investigator license. And simple computer repair is not necessarily a viable stand alone business. So things like running network cables or IP cameras, which many engage in, may require separate licenses. And don't forget things like HIPAA.
One also needs to have the business practices defined. Things like return policies, warranties, abandoned equipment, etc. You might not be required to allow returns or provide a warranty. But you still have to provide that information to the customer in advance of a transacation. And disposal of abandoned equipment is another area to document. Many localities have laws concerning selling abandoned equipment to satisfy unpaid bills or to just get rid of the stuff.
While insurance is not usually required by law in this business not having it could be a killer. And make sure to understand all of the details based on the type of business organization you have. For example some states do not allow principles in a Corp, LLC, or LP to be covered by WC. These limitations can also apply to employees. A few years ago I was reviewing my insurance with my agent. She told me that if I did not have background checks and even drug tests done on employees I might be denied or have limited liability coverage. Basically if an employee's actions caused a claim to be filed, say theft, and those checks, which were not completed, would have revealed past theft convictions the underwriter might limit or deny coverage if that came up during the investigation. The same goes with auto insurance. If you are using your personal vehicle for business but did not include a rider for business use.
frederick
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Legal issues to include software licenses
We don't install trial software for the customer unless it is our own software. I.e. RMM stuff.
We don't work on pirated software. Period.
We charge hourly for troubleshooting any kind of share-ware, free-ware or open-source (i.e. thunderbird, etc.) as long as it isn't trial-ware.
We don't work on trial-ware.
We do this for licensing reasons (that EULA thing). If they say "my pirated version of Windows" or "my pirated anything", I won't even open a ticket or entertain them past "have you considered purchasing the software?" If there is pirated software on their computer, we inform them, and work around it. Work within the EULA.
Other legal things should be covered in your Terms of Service, i.e. what your liabilities and limitations are. This is very important.
Permits
State-to-state, county-to-county, city-to-city. They vary so widely. More than likely you'll need a Transaction Privileged Tax (Sales Tax) License at the bare minimum. Even if you don't sell anything other than services, but because you buy hardware/goods for your business online, your local area (city/county/state) my say you have to pay a useable tax.
Other permits might include low-voltage, or a general contractors depending on what all your business provides such as running Ethernet cable from one side of the building to the other. We aren't that regulated of an industry, but sometimes we cross other industries lines, and therefore need one of their permits or licenses.
Being bonded helps a lot. It doesn't matter if you get bonded for a project, or because you deal with multiple managed clients. Bonding helps protect you and your client. If you don't perform your job, and the client has losses and comes after, the bonding will ensure they are paid for said losses. It's kind of like insurance, but it is far from it. It also makes you more appeasing to their eyes, cause they know if you fail to do what you said you would do.
Company name
Varies on how this is handled. At a minimum, get a DBA if you use any name other than your own. Like us for example, we started out as a DBA to get the ball rolling, and while we waited for our LLC to go through the AZ Corporations Commission. The DBA locked in our name by tying it to mine. So when the AZCC went to make sure the name was available for LLC, it was easier to obtain. There is no guarantee you'll get it, but as long as no one else uses the name you are more than likely going to be okay.
Everything that's your businesses needs to have your businesses name on there. Very important for an LLC, Inc., etc. Insurance, banks, bonds, etc. Nothing is in my name when it comes to the business. It's all in the businesses, like it was its very own person.
Guarantee on services
90-days is typical. So is 30-days. Your call, but make sure the ToS covers them, or have a separate guarantee document. State what is and isn't covered. Many people don't read what's going on, and try to bring it back on you. If your warranty is pretty sound, and within the legal constraints of the local governments, you might make it out of a court room alive.
We don't install trial software for the customer unless it is our own software. I.e. RMM stuff.
We don't work on pirated software. Period.
We charge hourly for troubleshooting any kind of share-ware, free-ware or open-source (i.e. thunderbird, etc.) as long as it isn't trial-ware.
We don't work on trial-ware.
We do this for licensing reasons (that EULA thing). If they say "my pirated version of Windows" or "my pirated anything", I won't even open a ticket or entertain them past "have you considered purchasing the software?" If there is pirated software on their computer, we inform them, and work around it. Work within the EULA.
Other legal things should be covered in your Terms of Service, i.e. what your liabilities and limitations are. This is very important.
Permits
State-to-state, county-to-county, city-to-city. They vary so widely. More than likely you'll need a Transaction Privileged Tax (Sales Tax) License at the bare minimum. Even if you don't sell anything other than services, but because you buy hardware/goods for your business online, your local area (city/county/state) my say you have to pay a useable tax.
Other permits might include low-voltage, or a general contractors depending on what all your business provides such as running Ethernet cable from one side of the building to the other. We aren't that regulated of an industry, but sometimes we cross other industries lines, and therefore need one of their permits or licenses.
Being bonded helps a lot. It doesn't matter if you get bonded for a project, or because you deal with multiple managed clients. Bonding helps protect you and your client. If you don't perform your job, and the client has losses and comes after, the bonding will ensure they are paid for said losses. It's kind of like insurance, but it is far from it. It also makes you more appeasing to their eyes, cause they know if you fail to do what you said you would do.
Company name
Varies on how this is handled. At a minimum, get a DBA if you use any name other than your own. Like us for example, we started out as a DBA to get the ball rolling, and while we waited for our LLC to go through the AZ Corporations Commission. The DBA locked in our name by tying it to mine. So when the AZCC went to make sure the name was available for LLC, it was easier to obtain. There is no guarantee you'll get it, but as long as no one else uses the name you are more than likely going to be okay.
Everything that's your businesses needs to have your businesses name on there. Very important for an LLC, Inc., etc. Insurance, banks, bonds, etc. Nothing is in my name when it comes to the business. It's all in the businesses, like it was its very own person.
Guarantee on services
90-days is typical. So is 30-days. Your call, but make sure the ToS covers them, or have a separate guarantee document. State what is and isn't covered. Many people don't read what's going on, and try to bring it back on you. If your warranty is pretty sound, and within the legal constraints of the local governments, you might make it out of a court room alive.
