Starting a new roofing company is an exciting venture, but before you can get to work, it’s important to ensure your business is legally registered and able to operate. Proper registration not only legitimizes your company but also protects your personal assets, secures your brand, and lays the foundation for future growth.

In this blog, we’ll cover:

1. The step-by-step process to register a roofing company
2. Setting up your business operations
3. Tax considerations for your roofing company
4. Managing your roofing business with AccuLynx

The step-by-step process to register a roofing company

Choosing the right structure when starting a new roofing company depends on your business goals, the level of personal liability you’re comfortable with, and your financial situation. Consulting with a legal or financial advisor can help you evaluate these options and select the structure that best fits your needs. Here’s a breakdown of all the requirements you’ll need to register a roofing company:

Step 1: Choose your business structure

Selecting the right structure for your roofing company depends on your goals, personal liability, comfort level, and financial situation. Consulting a legal or financial advisor can help you make an informed decision. Often, roofing companies that are starting out will set up one of the follow structures:

Limited Liability Company (LLC)

An LLC is a popular choice for many small to medium-sized businesses. It provides flexibility in management and tax treatment while protecting your personal assets.

Pros Personal liability protection: Owners are generally not personally liable for business debts. Tax flexibility: LLCs can choose how they want to be taxed, either as a sole proprietor, partnership, or corporation, which can offer tax advantages. Management flexibility: Members can manage the business themselves or appoint managers.

Cons Self-employment taxes: Members must pay self-employment taxes on their share of the profits. State fees: Formation and ongoing maintenance fees can vary by state and may be higher than other structures.

Partnership

A partnership involves two or more people who share ownership and responsibilities for the business. It can be a general partnership or a limited partnership, each with different implications.

Pros Ease of formation: Partnerships are relatively easy and inexpensive to set up. Tax benefits: Profits and losses can be filed through personal tax returns, potentially avoiding double taxation.

Cons Personal liability: General partners are personally liable for business debts, which can be risky. Potential for disputes: Roofing lawsuits between partners can impact business operations and relationships.

Corporation

A corporation is a more complex structure that provides strong liability protection but involves more regulations. Corporations can be either C-Corps or S-Corps, each with different tax implications.

Pros Limited liability protection: Owners (shareholders) are not personally liable for corporate debts. Attracting investment: Corporations can issue shares of stock, which may be attractive to investors and easier to raise capital.

Cons Complexity and cost: Incorporating involves more paperwork, compliance, and higher costs. Double taxation (for C-Corps): Corporate profits may be taxed at the corporate level and again when distributed to shareholders.

Private equity backed

Private equity involves investments from private investors or private equity firms that provide capital in exchange for ownership stakes or influence in the business.

Pros Access to capital: Investors can provide significant funding for business expansion or operations. Expertise and guidance: Investors often bring valuable business experience and strategic advice.

Cons Loss of control: Investors may want to be involved in business decisions or management. Profit sharing: You may need to share profits or equity with investors.

Step 2: Register your business

To legally operate, you must file formation documents with your state. This could be Articles of Incorporation for a corporation or a Certificate of Formation for an LLC. Include essential details like:

• Your business name
• Address
• Ownership structure
• Type of roofing services you’ll offer

Additionally, appoint a registered agent who will receive legal documents on behalf of your company.

Step 3: Obtain necessary licenses and permits

Most states require a business license or permit to operate legally. Depending on your location, this may involve passing a background check, providing proof of insurance, and possibly taking a licensing exam. Some states also have specific licensing requirements for roofing contractors to ensure you meet local building codes and safety standards. However, there are a few states that do not require a specific license for roofing contractors, including:

• Georgia
• Indiana
• Kentucky
• Maine
• New Hampshire
• New York
• South Dakota
• Texas
• Vermont
• Wyoming

 

Exam Tip: Roofing licenses may need to be renewed periodically, with some states requiring roofing contractors to complete continuing education courses. These courses can often be completed at roofing events like the International Roofing Expo.

Step 4: Get an Employer Identification Number (EIN)

An EIN is a unique nine-digit number issued by the IRS for tax purposes, and it’s essential if you plan to hire employees or operate as a corporation or partnership. You can easily apply for an EIN online through the IRS website.

Step 5: Comply with local regulations

Local regulations may require additional licenses, permits, or bonds. Research your state and municipality’s specific requirements to ensure full compliance. State government websites are a good resource for finding this information.

Step 6: Choose a business name

Choose a unique and memorable name for your roofing company. Make sure it complies with your state’s naming requirements and isn’t already in use by another business. You can check name availability through your state’s business registration website.

Setting up your business operations

Once you’ve secured the necessary licenses and permits, the next step to register a roofing company is to establish solid business operations. This involves setting up financial systems and securing insurance to protect your business and employees.

Open a business bank account

Set up a dedicated business bank account to separate your personal and business finances. This makes managing your money easier and helps keep your financial records organized and clear. Consider using accounting software, like QuickBooks or Sage Intacct, or hiring a bookkeeper to handle invoices, payroll, and taxes efficiently.

Get the right insurance

Protect your business by securing essential insurance policies. General liability insurance, workers’ compensation, and other additional insurances are key to covering potential risks and complying with legal requirements. These policies ensure you’re protected from accidents and liabilities, providing peace of mind for you and your team.

Tax considerations for your roofing company

Understanding and managing your tax obligations will help you avoid costly penalties. Your business structure will significantly impact these obligations.

• LLCs (Limited Liability Companies): LLCs offer flexible tax options. By default, single-member LLCs are taxed like sole proprietorships, and multi-member LLCs are taxed like partnerships. However, LLCs can choose to be taxed as a corporation if it’s more beneficial. This flexibility allows LLCs to select the tax structure that best fits their financial needs.
• Partnerships: In a partnership, the business itself doesn’t pay taxes. Instead, profits and losses are passed directly to the partners, who report them on their personal tax returns. Each partner must include their share of the business’s income, deductions, and credits on their individual tax returns.
• Corporations: Corporations are taxed as separate entities from their owners. They must file a corporate tax return and pay taxes on their profits. If dividends are distributed to shareholders, those dividends are also taxed on the shareholders’ personal returns, potentially resulting in double taxation.

How to file and pay business taxes

Regardless of your business structure, you must file the appropriate tax forms and pay taxes on time.

• For LLCs and partnerships: You will need to file a partnership return (Form 1065) and ensure that each member or partner files their individual tax returns with their share of the business income.
• For corporations: You’ll need to file a corporate tax return (Form 1120) and pay any taxes due. It’s also important to make estimated quarterly tax payments to avoid underpayment penalties.

Working with a tax professional can help you navigate these requirements and make the most of available deductions, ensuring your roofing company stays on track financially.

Managing your roofing business with AccuLynx

Once your roofing company is up and running, managing it effectively becomes crucial. Many contractors invest in software like AccuLynx to streamline their operations. AccuLynx simplifies day-to-day tasks by centralizing project management, scheduling, and customer interactions in one user-friendly platform.

AccuLynx roofing software benefits contractors by helping them:

• Manage projects and operations: Easily track job progress, manage tasks, and collaborate with your team effectively.
• Track compliance and legal documents: Organize and store essential digital documents to ensure regulatory compliance and quick access.
• Handle financials: Seamlessly manage invoicing, payments, financial records, and insurance documentation.

Registering a roofing company involves more than just having the skills to do the work; it requires careful planning and legal compliance. In this blog, we’ve walked you through the key steps to legally register your roofing business, whether you’re setting up an LLC, partnership, or corporation. Once your company is legally established, AccuLynx can help you manage every aspect of your business, from project tracking to staying compliant with legal requirements.

Ready to take your business to the next level? Get a demo of AccuLynx today and see how it can streamline your operations and drive your success.