The Legal Side of Delivery Business

A delivery business is a good venture that brings good money to the table. Customers now seek third parties or other services for delivery services as they try to save time on other activities. A good example is the food delivery services which are becoming more popular in the US. The demand for vegan food delivery, aesthetic meals and fresh ingredients is on the rise. Before you get started on a delivery business, several legal factors are taken into consideration. Here are some of the legal factors:

1. Legal Decision

Before any start of a business, a proprietor(s) should decide on the legal structure of the business. The structure of the business can be of a sole proprietor, partnership or limited liability company.

In whichever structure you choose, you’ll be required by most states to keep documented bylaws that define your business structure, governance and individual’s role. Company bylaws help to solve disputes in case of disagreements within the company.

In any case, you’ll want to operate an LLC or a partnership company. It is important to have an operating agreement document that outlines financial and functional decisions.

The next step you will need to register your business with your state to obtain a license.

2. Tax

Afterward, you will need to get a federal tax identification number. Businesses have an obligation to pay taxes to the IRS based on the income received. Failure to remit taxes results in tax penalties.

If you’re a sole proprietor or in a partnership business, the firm income goes directly to your personal income tax returns. Therefore you are obliged to pay taxes based on business profit.

3. Insurance

A delivery business requires vehicles for work to be done especially on the delivery of goods to the customers. Ensure that you insure your business vehicles because some states need you to do so. Take an auto insurance package that will protect you if a lawsuit or claim is filed against you.

4. Memorandum of Understanding –MOU

An MOU governs the relationship between your company and another party. An agreement can be signed off by a simple handshake or contract. Besides, it documents important meetings with suppliers, contractors, future partners, etc. This way, if the other party breaches an agreement, the MOU can serve as evidence in the event of a lawsuit or claim.

5. Employment Agreement

It is a contract that protects the employer against the employee in the event of disputes. The document is useful if you want to protect confidential company information, limiting your employee to get hired by a competitor firm or leaving too soon.

6. Liabilities

A liability is a legal obligation or financial responsibility that an individual faces. Every business is prone to legal liabilities such as:

• Food quality- When your company is being involved in food preparation or food delivery you can face legal claims in the event of food poisoning. Customers can sue the provider either by class action or an individual lawsuit.

• Employee actions- The delivery company can be liable for employee's’ actions if they are involved in illegal actions.

• Employees’ injuries- The delivery company could be liable for employees’ injuries and illness if it occurred during work. Companies should have a workers’ compensation insurance that compensates employees. In other cases, the employees’ can sue the employer if he/she does not meet the compensation claims.

Learn more about the legal documents here and here.Do not let the legal formalities and documents scare you away. These legal documents are to help you stay compliant with the laws of your state and to avoid lawsuits and claims.

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