Ok so since this is my second year online, and I have been relatively successful, it has been a year of FULL TIME online. Now, I need to get legit, but I have to admit on this end of business I am clueless! I own several websites, do I need DBA's for all of them? I would hope not, as I sell websites pretty frequently... Do I need to set up an LLC? And opporate each of my websites as an entity of the LLC? If I open an LLC...Do I have to open a seperate bank account, or can say a paypal account work? What is the cheapest way to go about doing all of this? I've visited LegalZoom.com, and they seem to have lots of info, but I'm not too sure where I fit in all of it...so I came to DP for advice from you other experienced IMers who have been in the same boat. After I establish an LLC (or whatever I really need), open up a new bank account, etc....Do I need to hire an accountant? Do you know any reliable cheap ones? Also, depending on the answer to the last question, How in the world do I get ready for taxes? What can I write off? All Advertising fees, product creation fees, listing fees, internet access bill, etc??? I think I've learned the vast majority of IM genres/issues....but when it comes to the offline legalities of becoming legit, being able to prove your income so that you can buy a home or car, or being able to pay taxes and get loans...I'm as lost as ball in high weeds. Someone please help!
I have a professional relationship with LegalZoom.com with respect to their intellectual property offerings, so you can take what I say with that in mind. I have known the company since it was only 5 employees and I have always known LegalZoom to be excellent at what they do. They offer quality and at a great price. Next, you should incorporate into some kind of entity. An LLC is a good entity to run because there are few formalities and you get a corporate shield, which will protect you from personal liability. This used to be my business entity of choice. I have since learned from my accountant that you pay more taxes as an LLC. When you are an S Corp you get some type of benefit from not having to pay self employment tax. I am a patent attorney and willing to accept that I just don't understand taxes so I am willing to accept that. My own research confirmed what the accountant said, although I don't understand why it is that way. So if you are making money I would consider an S Corp. I would not necessarily incorporate each website separately. That would seem to me to be overkill and create paperwork nightmares when it comes to filing taxes and yearly reports. You probably don't need an attorney to set up the corporation, LegalZoom would be fine for that, but I would recommend talking to an accountant to learn what you can do and should do and what you can get away with. Now, a word of caution... I had one accountant one time that was more interested in doing an audit of me and my company than she was worried about trying to help me pay less tax. I want to pay what I owe, but if there are ways to structure things and laws that let me pay less than that is what I want to do. Now I have an accountant that is willing to help me, tell me what I can and should do, and is willing to be aggressive (within the law of course) at writing things off. You want an accountant to be on your side, so don't just jump at one in the phone book. Ask around and talk to them first. Good luck. -Gene
Brianowens, I'm in the same situation as you. I was planing to setup a LLC, but just 10 min ago my accountant cousin called and I asked him bout it. He recommended a S corp also. I am going to have to look into it. He also recommended that I just do the paperwork my self, he said it isn't hard.
The government has been cracking down on single-member LLCs as these people are likely to be using the "company" just to pay less income taxes. Hence the reason S-corps are becoming more popular these days.
I personally went for a LLC. The only reason i stayed clear of the S-corp and went with the LLC, is if some reason someone wants to sue me they can only take whats in my business account and cant take my house or car or anything else. Though I am interested in paying less tax so i will look into that.
I really like this thread. Great info. Anyone got an answer on the multiple DBA's for each website? How's this work? Not that i plan on doing the same, but would like to know to avoid becoming suspect as my business income is very low at the moment.
As far as DBA's are you accepting payment on each site? If the answer is no, than dont worry about it. I would do it because its like $7 per name and keeps you covered and keeps people from being underhanded by trying to take business name, clients, etc... If you are just running an adsense network or affiliates just have them pay the company name and than no worries.
From what I've seen, they use a "blanket" approach. That means that they'll audit every single member LLC in a certain region or group and hope that some of them are cheaters. It's a scare tactic, and all you can do is keep good records and have a good accountant so it's easier to deal with their requests.
Visual Realm- If you have an S corp you will still get the benefit of having a corporate shield, which means your personal assets will be untouchable. There is one thing to remember though... you absolutely need to run your business, whether an LLC or a corporation of some kind, as a business. If you mingle assets and funds then you would not be treating the business as its own entity and you could lose the corporate shield. The moral of the story is you need to treat whatever business you set up as its own entity. Have a separate bank account, separate credit cards and never pay personal bills with company funds. If the company owes you money for a reimbursement make a reimbursement voucher and submit it for payment just like you would if you worked for someone else. Good luck. -Gene