Gaston County has more than 1,300 restaurants and food service establishments. Statewide, the restaurant and foodservice industry alone provides 11% of jobs, and is expected to double by 2028. From health inspections and sanitation grades to the permits needed to start your business, budding restaurants and food trucks have a lot on their plates. Below are a few things to consider when opening your new business, and how an experienced corporate attorney can help get your business off the ground (or in a truck!).
Partnership or Operating Agreement
Before you begin applying for permits and crafting your menus, you should think about how to resolve issues that may arise between business partners, friends, and even crowdsourcing fund donors as to your ideas. One of the best ways to plan for issues that may affect your business down the road is an operating agreement, if you have started an LLC, or some sort of formal partnership agreement. These agreements will help guide your relationship with investors and business partners, while avoiding potentially messy situations if things go sour or crop up unexpectedly. You want to make sure that everyone involved in your business knows what happens if a partner quits unexpectedly or can’t contribute money as needed. A corporate attorney can help ensure documents are in place before any issues come up.
Permits and Regulations
Gaston County and the State of North Carolina require certain forms and permits before you can make your foodie dreams into reality. For example, did you know that food trucks need a brick-and-mortar commissary partner where they can service and clean the food truck? There are also applications that must be submitted to the County before you can begin serving food to the public. To make sure any new food business has complied with all state and local regulations, it may be helpful to consult a local attorney for guidance.
Another issue facing small businesses is what insurance policies may be required. There is no substitute for discussion of your insurance needs with a trusted insurance agent, but the formation of your business and your corporate operating agreement may have ramifications as to the selection of policies necessary to protect your business and employees.
For example, the decision of whether to structure your company as a corporation or an LLC may affect whether workers’ compensation insurance is legally required. The North Carolina Industrial Commission has recently increased enforcement of mandatory workers’ compensation insurance, along with fines and penalties in the event of non-compliance. An attorney with knowledge of the workers’ compensation laws, including the new 2018 statutory changes relating to penalties and enforcement, is a good additional resource while reviewing your insurance needs.
Taxes must inevitably be discussed when starting any new business. While your accountant will cover the basics, you still must comply with federal and state income withholding tax laws. In North Carolina, the Department of Revenue might potentially prevent you from conducting business if you receive a violation. These issues can be confusing- and a local attorney can help you ensure compliance with the law before it becomes an issue.
Additionally, restaurants must charge sales and use tax to their customers based on the county or town where they are located. Food trucks experience an even more complicated situation, where a truck may have to charge one sales tax to the lunch crowd in Belmont, and another to evening concert goers in Gastonia. An accountant can help you navigate the ins and outs of what to charge and where. An attorney can be a great resource to help you navigate applying for sales tax permits for your business.
While you and your business partners may be concerned about start-up costs in seeking advice of trusted professionals, this investment in your business will yield greater returns by getting your business off to the right start. Engaging knowledgeable accountants, insurance agents, and attorneys on the front end may help avoid costly issues in the future. Our firm stands ready to help.
MHC Law’s Corporate and Non-Profit Section consists of Nancy Borders Paschall, William Sain, and Amelia Lowe. For further assistance or questions, please contact our office for your specific corporate legal needs.