Legal Matters When Starting an Internet Marketing Business

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I know you have to have a EIN number or some kind of business license depending on your state. Here is what i think: in affiliate marketing you don't need a tax id if you are selling someone else product, but if you have your own product you do need one. This is just my opinion, i don't really know for sure, that's why i want to hear from other people on what they know, and other legal stuff you should know if you are starting a business online or offline. Anybodys knowledge from personal experience with legal stuff or anything will be appreciated by me and by other people who are wondering this who may come across this.
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    Originally Posted by dgaubatz View Post

    I know you have to have a EIN number or some kind of business license depending on your state. Here is what i think: in affiliate marketing you don't need a tax id if you are selling someone else product, but if you have your own product you do need one. This is just my opinion, i don't really know for sure, that's why i want to hear from other people on what they know, and other legal stuff you should know if you are starting a business online or offline. Anybodys knowledge from personal experience with legal stuff or anything will be appreciated by me and by other people who are wondering this who may come across this.

    There's what you think...

    There's what you know...

    There's your opinion...

    Then there's reality.

    Regarding affiliate marketing (or even IM in general) you don't need an EIN or "business license" if you're selling your own product or even selling a product that's not yours.

    Depending on what it is you're doing, you have a lot of freedom in the United States. You can do business as an individual -- you can do "business" as a business!

    Answering your question specifically is difficult because what you're talking about is so broad.

    Let's take an "typical" internet marketer: whether you're selling eBooks, doing Adsense, flipping websites, selling services, doing CPA there's no requirement or law that says you "must" get a license or become any kind of "business" entity.

    NOTE: Yes, some towns and cities require that you get a "permit" to conduct business from home -- this has to do with zoning regulations put into place by literally thousands of municipalities. Even then, they're rarely if ever enforced; when they are, it's because the business that's being conducted at home is actually drawing too many visitors to the house and/or causing parking problem, disturbances in the neighborhood and so on. For the IM working at home and doing his/her thing, even this requirement just doesn't apply.

    How you conduct business, and in what form, is based upon YOUR NEEDS. Your needs are based upon how "official" you want or need to be, what kind of tax situation you have, do you have employees (or are you hiring "contractors"), does becoming an official business entity help with your sales? Is there any potential liability with what you're involved in? If so, you might want to conduct business an a corporation, or s-corporation, or LLC. It goes on and on!

    If a person is working a "regular" job and making money online the usual thing is that person collects a paycheck and collects whatever income they're getting from their online ventures. Settle with Uncle Sam at the end of calendar year. Period.

    Others may chose to consolidate their online activities and conduct their business as a "sole proprietor". Some go even further and become a sole proprietor by getting a d.b.a certificate, EIN, and a business checking account -- keeping a personal checking account on the side.

    The rule of thumb is

    1. Figure out what you're doing online.

    2. Decide if conducting this business (products, services, promoting, whatever!) is best conducted as plain 'ol you or as you "doing business as..."

    Focus on making money first.

    The infrastructure that you build around that process will become more clear to you as need necessitates.

    As always...

    Seek out the advice of a licensed attorney or certified tax accountant if you have any doubts about what you're doing or need to be doing!
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