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Dividing web activities in separate legal entities
Any experience to share?

 2:13 pm on Jul 7, 2010 (gmt 0)

Until now most of my on-line activities have been structured as self-employment activities. But work and revenue are increasing, and the time has come to separate some parts of the activities. There are mainly two options I am thinking of now.

The simplest option is to create a Limited Liability Company and put most of my on-line activities in that company. It would separate the web development part and the financial streams it generates from my other activities.

The other option which I have been thinking of is creating one Limited which contains the management type of activities like development and hosting, and create one or more separate Limiteds for each of the mayor websites. Of course not a separate company for every parked domain I own, but only for sites with potential and significant income streams. The reason I am thinking about the second option is that it would make it easier to sell a website including its concept etc as one package.

To be honest, with the current size of the activities combining everything in one legal entity would be sufficient, but I like to be prepared for the future and don't want to do things twice.

Has anyone some advice or experience to share about moving from the self-employed to the company stage and doing it in one company or divide separate activities?



 5:21 pm on Jul 7, 2010 (gmt 0)

Your accountant is the best person to discuss this with.


 6:17 am on Jul 8, 2010 (gmt 0)

My experiences with accountants is that they are good in counting money, not in business strategies. I am not primarily looking for the best short term financial solution but for a solution which allows flexibility in moving, splitting or selling activities. The concept of websites and on-line appearance is something not understood by the majority of the accountants I have spoken to anyway.

That's why I am hoping from some experiences from people who have been in a comparable situation and the hurdles they had to overcome with either of the options mentioned.


 6:35 am on Jul 8, 2010 (gmt 0)

I think you shouldn't care for what could happen in the long term.
If sometime you sell a live website (domain, contents, licenses...) you'll have time enough to do what you're thinking on, some weeks or even months from the first contact till the last money transfer.
By the way, you should create the LLC to run your business and set up your income from the company (ie: a salary, a fixed lease for the domains...)


 1:18 pm on Jul 8, 2010 (gmt 0)

Keep it simple, the business admin effort should be tiny compared to the value adding services effort.

Having a single LLC doesnt stop you entering into project partnerships or sharing revnues, all can be handled contractually

I wouldnt even separate the webdev, theres better tax breaks putting it all into the LLC and its more evidence to fight IR35 claims.

The only exception I'd have is with property, separate company


 2:38 pm on Jul 8, 2010 (gmt 0)

Just for clarity, I am not in the US, therefore no IR35 claims to fight and no special tax rules for web development.

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