need to form LLC for internet business?

by mguy
12 replies
I'm currently just marketing articles and still trying to get that first elusive sale.

Maybe I'll branch out to product development or online store. Either way, my business is evolving and that is my strategy.

Do I need to form an LLC so that in the long run I do not have to worry about it?

Also to complicate things. I am planning to move abroad and so it might be hard to obtain a US llc after that.

Thoughts?
#business #form #internet #llc
  • Profile picture of the author Willie Crawford
    The LLC, and other business entity structures is mainly to separate
    your business accounts from your personal accounts, and to
    separate business liabilities from personal liabilities. At least
    that's the reason that I set them up

    You probably want to discuss your needs with an accountant,
    and/or an attorney who specializes in this topic. I've actually
    gone through several 2-3 day workshops on this stuff, which means
    I'm even more confused

    Willie
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  • Profile picture of the author RockNRolla
    I'm from the UK so not sure if the systems are the same or not, but I had been earning money online for 18 months before I formed my limited company. My accountant was able to also back date my expenses for quite a bit as well to incorporate that in to my first year's books. Probably best to speak to an accountant and find out your best option.
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  • Profile picture of the author CyberAlien
    Forming businesses is honestly one of those things you need to discuss with any account and/or attorney. Reasons for doing it vary too much depending on your country, state, etc. as well as why exactly you're wanting to register a business. I wasn't nearly as worried about taxes when forming an LLC as I was about making sure I was protected legally.
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  • Profile picture of the author Farish
    Originally Posted by mguy View Post

    I'm currently just marketing articles and still trying to get that first elusive sale.

    Maybe I'll branch out to product development or online store. Either way, my business is evolving and that is my strategy.

    Do I need to form an LLC so that in the long run I do not have to worry about it?

    Also to complicate things. I am planning to move abroad and so it might be hard to obtain a US llc after that.

    Thoughts?
    Short term, you don't need a LLC to start a business. You may want a LLC for certain protections it offers. Talk to a cpa about why you should and shouldn't form a LLC.
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  • Profile picture of the author rodsav
    You can file an application at you Secretary of States office for a TRADE NAME, therefore later if things go well you can change it to an LLC, or a Corporation. You will be a Sole Proprietor but have a TRADE NAME (DBA). After you get your TRADE NAME go online and file for an EIN (Employer Identification Number) by filing an application online (SS-4), or you can do it over the phone. When you go to the bank to open a Business Account, you will have your Secretary of State's TRADE NAME and have an EIN number. Now you will everything in motion for down the road if you should decide to change to an LLC or Corporation and you can operate under a business TRADE NAME.
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    • Profile picture of the author mguy
      Originally Posted by rodsav View Post

      You can file an application at you Secretary of States office for a TRADE NAME, therefore later if things go well you can change it to an LLC, or a Corporation. You will be a Sole Proprietor but have a TRADE NAME (DBA). After you get your TRADE NAME go online and file for an EIN (Employer Identification Number) by filing an application online (SS-4), or you can do it over the phone. When you go to the bank to open a Business Account, you will have your Secretary of State's TRADE NAME and have an EIN number. Now you will everything in motion for down the road if you should decide to change to an LLC or Corporation and you can operate under a business TRADE NAME.
      I like this trade name idea. I think this is the route I am going to go.

      When I derive income (hopefully soon) then I will go about the business of forming LLC.
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  • Profile picture of the author GforceSage
    An LLC gives you legal protection by separating your personal assets from your business assets and puts all liability on the business. In California, an LLC has an $800 a year tax just to have it.
    I would go with rodsav's advice and start out with a DBA and move it to an LLC in the future if you start to make decent money.

    Good Luck!
    GfS
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    • Profile picture of the author Tom Reed
      Originally Posted by GforceSage View Post

      An LLC gives you legal protection by separating your personal assets from your business assets and puts all liability on the business. In California, an LLC has an $800 a year tax just to have it.
      I would go with rodsav's advice and start out with a DBA and move it to an LLC in the future if you start to make decent money.

      Good Luck!
      GfS
      There may be some good reasons to form an LLC but anyone that thinks they are "protecting" anything is living in a fantasy world. You're better off spending that money on a good insurance policy if you're looking for protection.

      If your LLC strays into an area where the lawsuits start flying, your LLC will be served at the same time you're personally served. Don't think for a second you're actually "shielded" from anything by getting an LLC.
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  • Profile picture of the author J R Salem
    I am a firm believer in properly setting your business structure from the start.

    It also forces you to be professional and get to work.
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  • Profile picture of the author abdoue
    all I can add to the discussion is that if you decide to do it

    don't be fooled by the internet providers who offer this kind of services

    you can do it on your own for almost free
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  • Profile picture of the author kindsvater
    Originally Posted by mguy View Post

    I'm currently just marketing articles and still trying to get that first elusive sale.
    For most people in this type of activity, incorporating or creating a LLC at this juncture is a waste of money.

    Personal liability protection? Zippo. Crawford may set something up if he is relying on other people to do services for him. Then a separate business entity can provide some personal protection from acts done by others. But when it is all you there is no liability benefit.

    Taxes? This is the one place where a business entity could be a benefit and get you more write-offs. But you actually need to be in business, not have an entity, and you're still trying to make your first dollar.

    If you are unsure if you can make money doing this, it can be a good idea to make money first, and then from your profits consider the reasons for having or not having a separate business entity.

    And then you will have another decision: corp, s-corp, or LLC. I would not jump to a conclusion that a LLC is best. Often, they are not, and in some states can be much more expensive than a corporation.

    .
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  • Profile picture of the author Joe Mobley
    It is very possible that a foreign business structure will offer better protection with similar tax benefits. (You mentioned that you were moving.)

    Do NOT talk with a lawyer, accountant, tax professional, etc. who does not have International experience. They will be very afraid and are in no position to give you sound advice in this area.

    Please let us know what decisions you make.

    Joe Mobley



    Originally Posted by mguy View Post

    Also to complicate things. I am planning to move abroad and so it might be hard to obtain a US llc after that.

    Thoughts?
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