What to do if a friend and I are considering starting a home-based preschool?

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What to do if a friend and I are considering starting a home-based preschool?

There will be 2 owners, so I was considering a general partnership. However, because the home which the preschool is run out of is mine, is it better to choose an LLC structure? Also, if a release of liability form is drafted and signed by the consumer, does that protect us (and our home) from anyone suing us for any injuries that may occur on site during preschool hours?

Asked on August 15, 2013 under Business Law, Washington

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

First, bear in mind that schools, pre-schools, and child care centers must typically be licensed by the state and therefore, you will have to comply with rules in regard to facilities, staff credentials, number of staff compared to number of children, etc.

Assuming you comply with rules and so can go into this business, then also bear in mind that you CANNOT protect yourself from liability for your own wrongdoing (e.g. your carelessness; or if anyone who works for you deliberately harms a child) by a release; if you or anyone who works for you is at fault in injuring a child, you will face liability.

Having adequate (typically $500k to $1mm or more) insurance is vital for any endeavor like this. It would also be advantageous to structure the business as a an LLC, as you suspect, to provide some additional protection from liability.


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