Is Your Lawn Care Business Legal?

Published on May 28, 2019

In order to start your business off on the right foot, it's important to take the proper steps into making your lawn care business legal.

When your law care business is legal, you have additional securities:

  • Personal assets are protected
  • Business assets are secured
  • Liabilities are minimized

Use this simple 4-step process to make your lawn care business legal now!

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1. Find the Perfect Name for Your Lawn Care Company

The first step into making your lawn care business official lies within giving your new business a name.

Choose a name which highlights the essence of your business and can be easily marketable.

As you're brainstorming potential business names, remember to pick something which is:

  • Easy to remember
  • Not already used in your state
  • Defines what services you offer
  • Reflects who you are as a business
  • Separates you from the competition

Then, search for a list of your favorite names in your state’s business name search database. Though, keep in mind, while most states offer online name searches, some ask for mail-in submissions or in-person visits.

Choose a name that is unique to your business, but also conveys the benefits of your lawn care services. For example: “Better Lawns by John.”

2. Get an EIN or SIN

In order to begin legally hiring lawn care employees, you'll need an EIN (i.e. Employee Identification Number) in the United States or an SIN (i.e. Social Insurance Number) in Canada.

Fortunately, the process for obtaining either of these is simple.

For an EIN in the United States, you'll fill out an online application on IRS.gov. For an SIN in Canada, there's a similar online application process on Canada.ca.

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3. Register Your Business and Obtain the Proper Credentials

As a registered LLC (i.e. Limited Liability Company) business, the business owner is legally considered a separate member of your business.

For this reason, many business owners choose to turn their sole proprietorships to LLC status to protect their personal assets from a lawsuits.

The Tax Issue — S Corporation or LLC?

The IRS, as well as your state and county tax collectors, are very good at getting the money you owe them.

Which means, it's important to make sure you incorporate your lawn care business under the right tax entity, so you know how much you need to pay the government.

Now, let's do a quick breakdown between S Corp (i.e. S Corporation) and LLC (i.e. Limited Liability Company):

S Corp vs. LLC

For tax reasons, the IRS classifies businesses as sole proprietorships, partnerships, C corporations, or S corporations.

Although, since there’s not an LLC classification, LLCs are taxed as another business type.

Due to this, if your lawn care business is a sole proprietorship LLC, you’ll need to pay self-employment taxes (e.g. social security and Medicaid).

In other words, your lawn care business' ENTIRE PROFIT for a particular year is taxed. Which means, to save money on taxes, you'll want to consider registering as an S Corp.

If you’re an LLC with an S Corp, you, as the owner, will be paid a salary.

Thus, your salary gets taxed for social security and Medicaid - rather than your business’ total profit being taxed.

AS ALWAYS, meet with a CPA (i.e. Certified Public Accountant) before making any final decisions. After all, a great CPA can address your business' specific needs to help you make the most informed decisions.

Remember, since any major financial decisions have the power to make or break the business, you can't afford to skip this vital step.

Licensing and Certifications

Depending on the services you plan to offer, it's essential to get the right applicator licenses, certifications, and business licenses.

For example, if you plan on offering weed and pest control services, you'll need to be certified or licensed by your state. Although, the rules in Canada are a bit different than those in the United States.

In the US, the EPA ensures your compliance to verify safe and effective applications are being rendered.

According to US federal law, anyone who applies or supervises the use of RUPs (i.e. Restricted Use Pesticides) must be certified with EPA regulations, state, territorial, and tribal laws.

Other Licenses and Certifications to Consider

Your local government may require you to have a business license as well as a contractor’s number.

Check with your county clerk’s office and the cities you’ll be serving. They’ll let you know whether you need a contractor and/or business license to work in those areas.

Also, keep in mind, NALP (i.e. National Association of Landscape Professionals) allows you and your team to expand your knowledge and service options.

They offer 7 different certifications, including these 3 lawn care courses:

  • Manager
  • Technician
  • Technician National

4. Get the Right Insurance for Your Lawn Service

Before you step out of your truck to service your client's lawn, you need to obtain the right insurance to mitigate legal risks.

There are 3 policies you should consider carrying for your lawn care business:

  • General Liability Insurance protects you and your employees in case an accident occurs on your client’s or their neighbor’s property, and you're at fault.
    • For example, it cover the business if your mower runs over an irrigation line and causes a flood in your client’s lawn.
  • Workers Compensation Insurance protects the business if one of your employees gets hurt while on the job.
    • For example, it covers the gamut from doctor’s visits, hospital stays, and other medical bills. It also helps cover the employee’s lost wages due to the injury or accident.

Remember, your equipment is an investment into your business. As a lawn care business owner, it's important to safeguard the heart of your business.

When an inevitable tragedy happens in your business, property insurance ensures your investment won’t be lost.

Also, take a look at a few other insurance policies to consider carrying:

  • Umbrella Insurance
  • Business Owner’s Policy
  • Commercial Auto Insurance

As always, meet with your trusted insurance agent to weigh your business' budget and needs to determine which policies and coverages to include in your account.

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Make Your Lawn Care Business Legal With These Easy Steps

Even with all of the proper steps and precautions taken, meeting with a CPA is an essential step in making your lawn care business legal.

Also, keep in mind, if you end up needing financial assistance, the SBA (i.e. Small Business Administration) can help you secure a loan. An excellent CPA can walk you through this process.

When you're first getting started, it's easy to get carried away and want to skip over some essential steps in building a legal lawn care business.

However, when you follow these easy steps, you can safeguard your personal and business assets while also ensuring the success and protection of your business.

Use these 4 simple steps today to make your lawn care business legal and official!


Relate: How to Start a Lawn Care Business With No Money


Originally publishedMay 28, 2019 7:00 AM, updated Dec 27, 2021 3:25 PM

Wendy Komancheck

Wendy Komancheck is the owner of The Landscape Writer. She writes for lawn care, landscape and other field services. You can email her at wendy@landscapewriter.com. When Wendy’s not working, she’s at the local high school cheering on her two sons' volleyball games, taking walks with her dog, Hope, or helping out at church.
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2 comments on “Is Your Lawn Care Business Legal?”

  1. There is a lot of stuff that needs to be done to have a legitimate landscaping business. I find it always important to get with an attorney any time starting a new business to make sure everything is done properly and we don't leave ourselves or the business liable for anything.

    1. Absolutely. Getting legal advice from a legal professional is always recommended. Especially in the Green Industry, where damage claims are so common.

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