Description of Business
My company is an automobile repair shop where customers can buy auto parts and receive related services including automobile painting. It is a Limited Liability Company (LLC) that is registered in Oregon. The company is owned by two friends William Bench, and Oscar Janglers, each of them has 50%. The name of the company is “B&J LLC”. In this way, the names of the owners are mentioned as well as the note that the organization is LLC, which is obligatory in the state of Oregon. It is located on 760 Chambers Street and consists of a four-bay garage (one of the bays is separated and devoted to painting services), office and shop space as well as the storage where the products are kept. These facilities were bought by the owners, as they were previously used for the similar purposes by another company.
As it was mentioned, B&J LLC provides the clients with auto products and services. Such concept allows the owners to get the most profit. Having needed tools in their shop, they do not only sell them but also use to provide services. The services include automobile painting and repair. The products are the auto parts, paints, the tools needed for the described procedures, and other items related to this sphere (engine oil, car polish, etc.). Today the majority of drivers prefer that some workers repair their automobiles so that there is no necessity to spend extra time and effort.
Thus, the fact that the range of services and products in B&J LLC is wide allows them to gain more. To attract more customers, the company provides discounts. Depending on the sum of the previous service received by the customer, one can get from 5% till 30% discount on particular products. The company also encourages the clients to leave their comments. They can fill out the blank and evaluate the services they received. They can also leave recommendations and wishes. In this way, the clients feel that they are not neglected but valuable for the organization, and B&J LLC can measure the effectiveness of their performance and implement the changes that are likely to attract more clients.
The customers of the company are all people who have cars. There are no restrictions regarding the gender and nationality of the clients. Professional drivers (taxi drivers) and the representatives of general public receive the services under the same conditions.
Business Organization
As B&J is LLC its organizational structure differs from the others. The company has two owners who can be also considered as LLC managers. As they have equal parts of the organization, they are also equal in the rights to operate the organization. They share the responsibilities and duties regarding business activities such as hiring new employees. All major decisions are made only after coming to the consensus. Such operations are agreed beforehand when the owners define whether they want to rule the company themselves or want to hire a person who will be responsible for this. They set the boundaries that cannot be crossed and he steps that should be followed.
As B&J also has other employees, it is not limited to member management. The company has a flatter structure, which allows the owners to cooperate while making decisions and control the work performed by the staff. Still, the workers are responsible only for their direct duties (painting or repair). Such things as procurement and financial control are considered by the owners. Due to the involvement of the owners in the day-to-day operations the employees will be encouraged to enhance the performance of their duties.
Licensing and Regulatory Requirements
Needless to say that to form the LLC in the state of Oregon, the owners are to follow the Oregon laws in all procedures. Not to get confused, they can follow the guideline, which can be found on the Internet. It includes the numbered steps of the procedures and the references on the majority of official sites. If the owners want to apply for the license or permission online, they can also find an application form and send it instead of sending a mail or going to the organization. Still, it is not always available.
When starting to think about the creation of the new business, the owners usually start to think about the name of their future company. However, it is not possible just to call the organization as one wants. There is a special procedure that the owners are to follow. Moreover, there are requirements and prohibitions that are to be considered. In this way, the owners are to create the name for the company that includes “LCC” and to check whether it is available or not (the organization with such name might already exist, so it is necessary to refer to the online database not to waste time and effort later). The name is received after filling out the necessary application in 120 days. The owners will pay $100 for it.
The next step is the filling out of the Article of Organization. It includes the name of the company and its address, the term of existence, its type and the names of the owners or/and managers. All kind of services the company is providing are also to be mentioned. This article also costs $100.
Then a registered agent is to be chosen. One is to accept the legal papers of the organization in case of lawsuits. Needless to say that it is to be authorized and have a physical address in the state.
The organization can also create an operating agreement, which is required in some states. Even though it is not needed in Oregon, the advantage of the agreement cannot be denied, as it includes the limits and rules that control the powers and duties of the owners. As a result, they have a guideline for their actions, and fewer problems or misunderstandings will occur.
The creation of LLC in the state of Oregon does not require any publications. Thus, this step can be omitted but should be considered if the owners also want to locate the company in some other state.
Except for the obligatory licensing and permit that should be obtained to do business in Oregon, there are additional taxes and requirements. Whether they are needed or not depends on the type of organization, the services it provides or products sells, the number of employees and location. In the case of B&J LLC, the employer identification number (EIN) is needed, as it has two owners and several workers. To gain it, the Bench and Janglers can follow an online registration and apply by fax, mail and telephone. The Form SS-4 is needed for the application.
The business license is obligatory for any business that is located in Oregon. Still, it does not mean that the demands are the same. The licenses may differ depending not only on the state where the business is held but also on the city. All licenses needed to manage a particular business can be found online with the help of special directory. According to it, B&J LLC has to search for the licenses connected with the disposal of the products and the delivery of automobile repair services. As a result, Secondhand Dealers Permits are required for B&J LLC in the chosen city (Portland).
It allows the company to operate as a shop (buy and sell the goods). They should also remember that this license can be used only for a year and is to be gained again later. An additional license for automobile repair services is also required (Recreational Vehicle Repair Operation). The fee for it can differ depending on whether the company is taking it for the first time or not. In the case of B&J LLC, the business is just opening, and the fee will be $125 in total.
When the business consists not only of the owners but also includes the staff, additional taxes are to be considered. As B&J LLC has several employees, the owners are to consider the tax registration and refer to the Department of Revenue. Here the EIN will be needed.
The annual reports are to be filled out, and the fee ($100) is to be paid. The report can be made online and sent to the Secretary of State. B&J LLC has not operated long enough to be obligated to provide a report but when the year comes to the end, it is to be managed.
Of course, people who are working in a particular sphere are to have the document that can prove their ability to provide the clients with the services of high quality. Still, those who work in automobile repair shop do not have to have a license. The requirement is to have a document, which proves that the individual obtained needed education. Thus, the workers are to have their diplomas.
The owners of the business should also obtain local permits except for business license. B&J LLC does not need a building permit as the company is using an existing garage. Zoning permits are also not needed, in this case, as they are not making any alterations that do not create or alter any area critically. The owners found it advantageous to start their business in the place where the automobile shop already existed some time ago. In this way, they reduced the number of permits that are to be obtained, which allowed them to spend less money on fees. Still, Bench and Janglers gained alarm permit to be sure that their company is safe. The fee for it is to be paid each year ($125).
Taking everything mentioned into consideration, we can conclude that generally such things are to be obtained and followed by the automobile repair shop:
- The name accepted by the Oregon Secretary of State
- The articles of organization for LLC
- The registered agent for service of process
- The operating agreement (optional)
- The EIN
- The business licenses
- The registration with the Department of Revenue (tax registration for employees)
- The annual reports (for the Secretary of State)
- Building/zoning permits
- Alarm permit
Risk Management, Insurance, Employee and other Matters
People who start their own business realize that there are specific risks they might deal with. To prevent the occurrence of the adverse outcomes, they should consider what problems are likely to be faced and in what way they can be prevented or at least partially controlled.
Having an automobile repair shop, Bench and Janglers considered fire hazards first of all. There are lots of flammable things in the shop, including gas, fuel, paints and some car parts. That is why the garage was tested for being fire-resistant, having sufficient ventilation system and fire safety system. The inspection checks all such shops, as the problems they might have are likely to affect not only the employees but also the safety of their clients.
Being hired, the employees also received instructions regarding the usage of electrical devices. The workers gained the list of preventive measures they are to follow to prevent any health threatening situations. The owners also put this guidance on the wall. As there is power-driven machinery in the shop, the workers cannot be younger than 15 years old according to the law. Still, there are no guarantees that the injuries received in the workplace are will not occur. That is why the insurance is needed. The owners referred to the Commercial Liability Insurance available in their state. It helps the company to deal with the damages caused to other people by the staff and the owners. It means that if something happens to the property of the clients while it is under the B&J LLC’s responsibility, the insurance company will cover it. It includes physical and personal injuries, legal defense, etc.
The most crucial aspect is the property damage, as the customers leave their vehicles in the garage till they are repaired. The coverage for the small businesses is usually $500,000, but the sum can be twice larger also. The high-risks businesses also tend to increase this amount of money. It may also be advantageous to have an employee disability and commercial property insurance, as they protect the staff and things that belong to the company. A variety of unexpected events that caused damage is included in the last type of insurance, which makes it the most beneficial for B&J LLC owners. They may also consider medical insurance for the employees. Thus, the insurance allows escaping legal negligence.
To obtain the insurance, the owners are to follow several steps. They need to visit the agency they believe to be the best depending on the variety of options it offers. Then they are to have a conversation with a consultant. It is better to speak to several people before buying a policy to be sure that the obtained one is really needed, and the money are not wasted. The owners are to explain their activities for the consultant to find the best insurance opportunity. Thus, B&J need to gain coverage if something happens in the shop. The owners are also to consider whether they need a key person for insurance or not. Then the coverage levels are to be discussed, as there may be an opportunity to gather several services under one policy, which is advantageous. Finally, the owners select the package that meets all their requirements and perfectly fits their business. They pay the fee and receive the copy of the document.
Thus, it can be concluded that to do business in Oregon the owners are to follow numerous regulations and obtain all necessary licenses and permits. They should also consider possible risks and plan their prevention and coverage.