Business License For Online Business Question

by PayForWords Banned
17 replies
So,




As some of you may already know, I'm in the process of launching an online business that will offer content type services (see my name for details).



Anyways,



Do I need a business license? It is me and one other person but we are in different states but regularly meet up. Do we both need one?



One for each state? One together? Just file taxes separately?




Can anyone walk me through this or point me to a good resource?






Thanks!
#business #license #online #question
  • Profile picture of the author Steve B
    Yes, you do need a business license if you're going to make a profit online.

    No, you both don't need a license for the business - the business only needs one. However, your local cities may require, if you work out of your home, that you have a license or permit to operate from home in a residential area.

    Who files taxes for the business income depends upon how your business is structured for tax purposes. One of you, for example, might file as an independent contractor working for the business -- in that case, the contractor would file his taxes separately from the business.

    Here is one resource to help you: SBA

    Good luck on your new business.

    Steve
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    • Profile picture of the author Sergio Zekanovic
      Originally Posted by Steve B View Post

      Yes, you do need a business license if you're going to make a profit online.

      No, you both don't need a license for the business - the business only needs one. However, your local cities may require, if you work out of your home, that you have a license or permit to operate from home in a residential area.

      Who files taxes for the business income depends upon how your business is structured for tax purposes. One of you, for example, might file as an independent contractor working for the business -- in that case, the contractor would file his taxes separately from the business.

      Here is one resource to help you: SBA

      Good luck on your new business.

      Steve
      Is this permission required for any country in the world?

      Thank you in advance

      Sergio
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    • Profile picture of the author Curtis2011
      Originally Posted by Steve B View Post

      Yes, you do need a business license if you're going to make a profit online.
      Not necessarily. Any income he makes is most likely just treated like normal personal income, if he operates as an individual and not a business.

      If he wants to deduct expenses for tax purposes... then he probably needs to be a business.
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      • Profile picture of the author Steve B
        The OP said he was launching on online business.

        If that's the case, and he's in the U.S. (I'm not familiar with laws in other countries), he is going to have to register and declare a business structure. It could be a sole proprietorship, a partnership, S Corp, regular Corporation, etc.

        The main reason to set up a business is to protect your personal assets and to be able to claim business expenses.

        Those who claim you don't need a business license to operate a business in the U.S. are giving you bad and potentially dangerous information.

        Here's the thing: rather than take a chance on getting in hot water, why not contact the Business Development arm of State Government where you live and ask them to help guide you?

        I don't pretend to know all the laws - they will vary by state. But to ignore the fact that the law requires your business to be registered and licensed is like burying your head in the sand.

        Please get some legal advice or at least some state government assistance. Just Google your state's name + business registration and you should be able to find some help.

        The best to all of you,

        Steve
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        • Profile picture of the author PayForWords
          Banned
          Originally Posted by Steve B View Post

          The OP said he was launching on online business.

          If that's the case, and he's in the U.S. (I'm not familiar with laws in other countries), he is going to have to register and declare a business structure. It could be a sole proprietorship, a partnership, S Corp, regular Corporation, etc.

          The main reason to set up a business is to protect your personal assets and to be able to claim business expenses.

          Those who claim you don't need a business license to operate a business in the U.S. are giving you bad and potentially dangerous information.

          Here's the thing: rather than take a chance on getting in hot water, why not contact the Business Development arm of State Government where you live and ask them to help guide you?

          I don't pretend to know all the laws - they will vary by state. But to ignore the fact that the law requires your business to be registered and licensed is like burying your head in the sand.

          Please get some legal advice or at least some state government assistance. Just Google your state's name + business registration and you should be able to find some help.

          The best to all of you,

          Steve
          Doing that now, thanks man!
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          • Profile picture of the author RobinInTexas
            Until you have significant income, you probably don't need to do anything, as long as neither of the individuals in the informal partnership cheats on the other.

            One of you will have to register a business somewhere in order to open a "business" bank account, unless you don't get paper checks, or if you have paper checks made out in the name of one of the partners.

            I live in Texas, where there is no state income tax, and I have an EIN that I use to keep from giving out my social security #, and I can live under the radar, don't know exactly how legal it is, but it has worked for several years.

            I am not a lawyer, in fact have no legal training whatsoever. I don't even play a lawyer on tv.
            In no event will I be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of my opinion. Taking legal advice from anyone via the internet is a bad idea, you should do your own research and consult proper legal counsel before embarking on anything after breakfast.
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  • Profile picture of the author Victor Edson
    In Indiana, you don't need anything at all to offer services. If you've got a social security number.. you can offer services. But if you're serious about setting up a business, I recommend getting a business name registered and incorporating it anyway.

    It'll protect you from liabilities and make your business a lot more professional.

    Get an accountant too! They can handle all the tax issues and do their thing with taxes & bookkeeping while you focus on creating content and finding new clients.
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    • Profile picture of the author PayForWords
      Banned
      Originally Posted by Steve B View Post

      Yes, you do need a business license if you're going to make a profit online.

      No, you both don't need a license for the business - the business only needs one. However, your local cities may require, if you work out of your home, that you have a license or permit to operate from home in a residential area.

      Who files taxes for the business income depends upon how your business is structured for tax purposes. One of you, for example, might file as an independent contractor working for the business -- in that case, the contractor would file his taxes separately from the business.

      Here is one resource to help you: SBA

      Good luck on your new business.

      Steve

      Thanks! One of us is in TN and one is in WV. Would you recommend one of us just gets a business license and have the other one fill out a W9 and report their earnings every year? Could we even do it like that? Any benefit to doing a LLC instead?

      Originally Posted by Victor Edson View Post

      In Indiana, you don't need anything at all to offer services. If you've got a social security number.. you can offer services. But if you're serious about setting up a business, I recommend getting a business name registered and incorporating it anyway.

      It'll protect you from liabilities and make your business a lot more professional.

      Get an accountant too! They can handle all the tax issues and do their thing with taxes & bookkeeping while you focus on creating content and finding new clients.
      I wonder if that applies to TN or WV. Pretty confusing stuff.
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  • Profile picture of the author TolyZ
    You don't need a business license ...
    However, you can register a business as a corporation where both of you will own a percentage of a it (shareholders).


    Not a lawyer, so don't hold it against me
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  • Profile picture of the author marc@clickbitz
    I don't know about your area and don't consider this legal advice but you can probably register as a sole proprietor and claim your income in your personal tax return.

    The bottom line is that if you are making income, some legal entity has to declare it and get taxed on it!
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  • Profile picture of the author Istvan Horvath
    A while ago the owner of this forum said it was dumb to ask legal questions in a public and international forum... knowing that the regulations are all different for different jurisdictions.

    I guess his post is still valid
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    • Profile picture of the author PayForWords
      Banned
      Originally Posted by Istvan Horvath View Post

      A while ago the owner of this forum said it was dumb to ask legal questions in a public and international forum... knowing that the regulations are all different for different jurisdictions.

      I guess his post is still valid

      Thanks for replying
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    • Profile picture of the author keyon
      I agree that people shouldn't be asking for legal advice in a forum like this, but geesh.....some of the responses I've been reading here are making the whole thing more complicated and scary than it really is.

      I can legally make money online with little more than a SS#, a debit card, and a Paypal account -- especially if we're talking about the kind of business the original poster is talking about (digital-based products and services). I've been doing this for years, and the only legal obligation I have is to report my earnings to the IRS -- along with the W2s I send them from my day job.

      Sure, there are tons of things you'll want to do later on if your business really takes off -- like renting office space, setting up an LLC, hiring an accountant, maybe even bringing on employees -- all of which certainly require a more sophisticated business model than a debit card and a PayPal account. But I wouldn't worry about any of these so early in the game. First see if you can actually make some money with your idea.
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      • Profile picture of the author PayForWords
        Banned
        Originally Posted by keyon View Post

        I agree that people shouldn't be asking for legal advice in a forum like this, but geesh.....some of the responses I've been reading here are making the whole thing more complicated and scary than it really is.

        I can legally make money online with little more than a SS#, a debit card, and a Paypal account -- especially if we're talking about the kind of business the original poster is talking about (digital-based products and services). I've been doing this for years, and the only legal obligation I have is to report my earnings to the IRS -- along with the W2s I send them from my day job.

        Sure, there are tons of things you'll want to do later on if your business really takes off -- like renting office space, setting up an LLC, hiring an accountant, maybe even bringing on employees -- all of which certainly require a more sophisticated business model than a debit card and a PayPal account. But I wouldn't worry about any of these so early in the game. First see if you can actually make some money with your idea.

        Thanks! That sounds pretty universal regardless of where you're located.
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  • Profile picture of the author GlobalTrader
    Quoting from the Davinci Institute's website, here is the reason there is NO ONE definitive source to answer your original questions:

    "The total number of governmental bodies in the U.S. is approaching a staggering number – 90,000. During normal economic times there is plenty of money to go around, but now every city, state, county, parish, township, and special taxing district is competing for the same tax dollars that the federal government is.

    Governmental entities are living, breathing organisms, each fighting for survival. With tax shortfalls cropping up in nearly every corner of the U.S. economy, most are struggling to preserve their own piece of the pie. With money declining, many are compensating with unusual policy decisions that they hope will shore up their balance sheets.

    But it’s not just about money issues. Along with taxing authority, each one of these governments has its own ability to create and enforce new laws, rules, and regulations. Working with a limited set of tools in their toolbox, governments have resorted to using laws and regulations to solve virtually every conceivable problem. The sheer volume of laws emerging from these 90,000 rule-making bodies is truly stunning."
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    • Profile picture of the author PayForWords
      Banned
      Originally Posted by GlobalTrader View Post

      Quoting from the Davinci Institute's website, here is the reason there is NO ONE definitive source to answer your original questions:

      "The total number of governmental bodies in the U.S. is approaching a staggering number – 90,000. During normal economic times there is plenty of money to go around, but now every city, state, county, parish, township, and special taxing district is competing for the same tax dollars that the federal government is.

      Governmental entities are living, breathing organisms, each fighting for survival. With tax shortfalls cropping up in nearly every corner of the U.S. economy, most are struggling to preserve their own piece of the pie. With money declining, many are compensating with unusual policy decisions that they hope will shore up their balance sheets.

      But it’s not just about money issues. Along with taxing authority, each one of these governments has its own ability to create and enforce new laws, rules, and regulations. Working with a limited set of tools in their toolbox, governments have resorted to using laws and regulations to solve virtually every conceivable problem. The sheer volume of laws emerging from these 90,000 rule-making bodies is truly stunning."
      I didn't just ask for an answer, I also asked for a resource.

      BUT...

      You kind of gave me that and I found an answer to my question yesterday.

      Thanks for the input though!
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  • Profile picture of the author owais211
    Banned
    Definitely you need to acquire one if you going to make profit online and also if you will be required to file tax for online business.
    But it all depend on where you are,in some counties you don't need to have one.
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