I am setting up a directory based website. I have a partner and both of us will sell the ads in our area. My question is, Do i need to have an LLC for a website like this? If so or if not, is there anything else i need legally? I want to make sure we are protected. Thanks!
I would definitely form some type of entity, whether an LLC or S-Corp or C-Corp. LLC is the easiest to do and most user friendly, it also allows you to decide how to split the profits instead of just doing shares like a corp. For instance if you do a majority of the work one year you guys can decide that you get a majority of the profits and then if next year he does a majority of the work he could get a majority of the profits. An LLC is very flexible and they are super easy to setup. In most states you can do it right online for $100. This gives you a certain level of protection since business is being done under a separate entity, plus it gives you more of a professional look.
An LLC is always a good idea. But I personally didn't "get legal" until I was making a significant income.
Totally agree, it's always a good idea...and a one time fee. Sucks to pay some $600 to get it done, but it's not like LLCs have an annual fee to upkeep. You might need to hire an accountant at some point though.
You didn't say where you are located, but in California and LLC is not always a good idea. An LLC is taxed a minimum of $800 per year, even if it isn't making any money. I would check with some experts before you jump into an LLC.