The Legal Side of Your Vending Business

By candypreneur

In All Articles
Nov 11th, 2015

It is of no surprise to hear that the United States Government over regulates small businesses. If you want to be a business owner then you have to be willing to put up with the local, state and federal government’s BS. Government regulation is not all bad though, some are trying to prevent greedy business owners from poisoning customers with toxic or expired food.

If you are serious about starting and operating a vending machine business than it is in your best interest to follow the legal requirements of such a business and avoid problems down the road. It may seem like a hassle to file for a LLC and get all the correct permits and licenses for your local and state government.You are correct it is a hassle but it is needed as a safety precaution. Operating a business without a license and proper permits will result in local and state fines that can easily eat up all your profits.

In this day and age absurdly stupid lawsuits are constantly being filed purely in the pursuit of monetary gain by the plaintiff. The truth is if someone chokes on a gumball or manages to swallow a toy that gets stuck in the small intestine you can be found liable if it came from your machine, furthermore the business that you operate the machine out of can be named in a lawsuit as well. Although it somewhat defies all logic and makes no sense it is the hard truth, and if you are not prepared it can be a devastating blow to your business and personal life.

The first step is separating your business and personal life, setting up an Limited LIability Company will legally separate your business and personal finances as long as certain rules are followed. Be prepared to pay at least a couple hundred dollars in applications for various licenses and permits. If you are the sole proprietor and employee of your recently formed LLC then considering whether to use your personal Social Security number (SSN) or obtaining a Employer Identification Number (EIN). A EIN will help to further separate personal and business finances, as well as meet the legal requirements in order to hire employees. It’s like a social security number but for a business.

If you choose to set up a LLC and EIN it is very important to be aware of your actions in regards to signing any documents and spending money. If you have a EIN, then a business bank account can be set up separate from personal accounts, it is important that they remain separate and do not commingle, the same goes for signing documentation. If your personal information is used in any legal documentation pertaining to business matters then the protective measures of your LLC and EIN can very well prove useless in preventing you from being personally liable. The most common is to take out a loan in your name rather then your business’s name. Once such entities are created, lots of small business owners fail to keep up with the requirements by failing to submit annual reports, renew licenses and permits and operate outside of their defined limits.

Furthermore, you can appear unprofessional and organized to business owners if certain steps are not taken in establishing your business. It is of increasing likelihood that business owners will want to see your licenses and permits before allowing you to place machines. Malls require one million dollars in liability insurance for your business before they will allow you to place a machine. This is done again to prevent them from having any legal obligation in your business matters, and will require you to have an EIN.

All of this legal work is just to protect you from being personally responsible for any problems down the road. If you are passionate about starting and growing your own bulk candy vending business, then you must be willing to take the leap and get over any fears you may have. Remember it is a learning experience, what may seem scary and hard the first time around will be much simpler and familiar once you’ve been through it once or twice.