The Experts’ Manual on Building a Rockstar Cell Phone Repair Shop – Part III

by Komayal Hassan
Cell Phone Repair Shop - Legal Frameworks

So now that the funding concern’s out of the way, it’s time to get down to business formalization. The important step where you decide what your company/cell phone repair shop structure is going to be. An issue that has both long-term legal and operational implications.

Big words.

We’re only using them to drive home the importance of this stage.

Also, you might want to take notes. Commit to reading the fine print before you go.

Ok. Let’s get to it. 🛴

Cell Phone Repair Shop Business Types: An Overview

When considering business structure, you need to make do with 4 broad types:

1. Sole Proprietorships

2. Partnerships

3. Corporations

4. Limited Liability Companies (LLCs)

We’re going to save you the research time by telling straight up about the type worth going for.


Which, as the name suggests, ‘limit’ the business liability faced by the owner. 

As we explain each type, we’ll go into detail about what exactly this means.

Also, as a rule, you should register your shop in the state where you reside. This might seem obvious, but you’d be surprised to learn just how many people file for states like Wyoming. Hoping, following on the advice of one internet legal ‘guru’ after another, to cut back somehow on taxes. 🤷‍♀️

Sole Proprietorships 

The simplest business arrangement. 

Here, the owner, who is often a daring bootstrapper, is literally one with their company. Legally speaking. Meaning that the owner’s personal capital and assets, other than those of the company, are liable. Retrievable through a court in case of any lawsuits on the firm.

On the flip side, the owner gets to take all company profits and assets in their name. No dealing with pesky partners asking for their share of the revenue. 

Sole proprietorships are the default business orientation for companies that don’t register otherwise. The kinds of service providers – in the cell phone repair industry – that make for one-person shops. Also found as ‘techies’ who provide mobile repairs.


The next step to proprietorships. Partnerships carry the same, unincorporated, structure. But here, the company ownership comes shared. Split, as the name suggests, between individuals in a profit-sharing ratio. Based on the size and scope of their business investment.

Partnerships typically boast more startup capital and assets than your run-of-the-mill solos. But they come with more of the same risk – though now divided. Assets distributed, per the arrangement mentioned, between partners. Along with all of the liabilities accrued.


Corporations, of which there are 2 major types in America, are formal and incorporated. Types C (the default incorporated) and S (which requires further documentation)

Suited to larger business setups, their main advantage is that they’re legally separate from their owners. This means that in the event of lawsuits, the owners’ personal assets remain protected. 

S-type corporations can host a total of 100 shareholders. These can only be U.S citizens. C-types, however, are more favored by larger setups. Many of these go on for listing on public exchanges. Ideal for business arrangements where larger pools of capital are expected to flow. Revenue streams in excess of $80,000 per annum. Think your Apples and Microsofts.

Limited Liability Companies (LLCs)

A type of corporation, LLCs are the preferred business arrangements for cell phone repair shops. They combine the personal asset protection of corporations with the operational fluidity of proprietorships. Further, their taxation structures allow for lesser tax deductions than the others – reaping benefit from what is called ‘Pass-Through Taxation’.

Opening an LLC

The steps for opening an LLC are simple and straightforward. 

Go with the following rubric: 

  1. Select a State.
  2. Choose a Name for your Company.
  3. Pick a Registered Agent.
  4. File your Company with the State Office.
  5. Submit an LLC Operating Agreement.
  6. Get an EIN.

And that’s pretty much it. 

Once you’re done with these formalities, you’ll be on your way doing service repairs in no time! 💃

There’s Still Some Work in the Offing

Opening a cell phone repair shop is just the beginning, however. Once you’re done with all the legalities of the trade, you need to work on a good marketing and sales strategy. Figure out the field – as it were – that you’ve plunged into (if you didn’t do this already; in the beginning).

We cover all these issues – and more – in Part IV of this series; so stay tuned!

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