If I’ve been tailoring my own clothes and the clothes of friends and family for a few years now, is anything I should consider legally?

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If I’ve been tailoring my own clothes and the clothes of friends and family for a few years now, is anything I should consider legally?

I’d like to try to turn this service into a source of income. I’m considering advertising my service on craigslist, in thrift stores, and perhaps I’ll make a few youtube videos or a website to get my name out. Payment would be accepted informally. For example, I’d just take cash, check, or paypal upon completion of a job, negotiating the price with each customer. I would do the actual tailoring at my home, which customers would never visit. Do I need some kind of permit? Perhaps some kind of contract?

Asked on December 14, 2014 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

You do not need a permit to tailor clothing what you need and should do is:

1) Check your town's rules/zoning about home based business, to make sure you legally can do this--you most llikely can, but it takes very little time to call the town clerk and check.

2) Set up a limited liability company (LLC) and run your business through it, to protect yourself from business related debts or liability. (You could also set up a corporation, like a subchapter-S corp., to do this, but small businesses generally find LLCs simpler, less formal, and involving less paperwork.)

3) Open a  business account after you set up the LLC and put all payments into or out of the business through it--this will help reinforce that the LLC is legitimate (and not just a sham to defraud creditors; comingling personal and business funds is one of the best ways to, in the event of litigation, lose the protection of the LLC). Doing this will also help you at tax time, since you'll be able to show which expenses are business expenses--that is, which expenses are deductions.

4) Let your home insurer know what you're doing and take out business insurance--your homeowner's will not cover you against a business claim if you never disclosed that you had a home-based business. Insurance provides a lot of protection--it's worth the fairly small extra expense for business insurance.


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