Hello, My main question revolves around the decision of whether or not i want to incorporate my web related activities. I've looked into incorporating in CA and it seems that after the first year I'll have to start paying a 800$ minimum franchise tax... Now 800$ is a lot of money if this is a hobby... So my questions are: Is it important to incorporate your web business to protect your assets? If I do incorporate what stops me from (seeing how there is no physical location for web related activities) incorporating in Delaware? Do you guys feel it's important to incorporate or is it not necessary because the internet is such a difficult place to prove copyright, etc. And of course any other advice would be greatly appreciated. Thanks, Dastuff.
California is going to charge you the $800 even if you incorporate in another state - unless you can prove you don't work out of a California location, do banking in California, etc. You might also look at an LLC. I don't know what you are trying to protect, but copyrights are enforced and proven all the time. If you didn't create it, or have express permission to use it, it's copyright infringement.
I live in California and I don't usually recommend that new businesses incorporate. First there is the $800 tax after the first year. (LLC's are also charged a MINIMUM $800 tax) Then there is the paperwork. If you incorporate and don't do your annual meetings and minutes and keep all your paperwork you can lose your liability protection from your corporation. This is why LLC's are popular because they don't require as much paperwork. Mjewel is correct. If you have any sort of "business presence" in California you have to pay the tax, even if you are incorporated in another state. For most small, hobby level businesses, working as a sole proprietor is probably best. If you feel you need protection for your personal assets then look at getting some insurance. Liability insurance or errors and omissions insurance will probably give you enough protection and cost less.