Forum Moderators: skibum
Should it be Corp? SCorp? LLC? Which state is best to incorporate in or should I start an offshore corp?
I will do legit business, I just want to be as safe and protected as I can be. I currently live in Florida and I am married.
Any help would be appreciated.
u4ea
Remember, not only do you have the costs of setting it up, you will be required to file tax returns for the corporation or LLC. Early on, until there's a healthy income stream, it will be more trouble than its worth. So, I would recommend waiting.
There are some advantages tax-wise which I won't mention here, but they won't have an impact unless there's a substantial amount of profit in the venture.
If you really need answers, I would suggest that you do some online research about it or consult an attorney or CPA who does tax work.
u4ea
Disclaimer: These are strictly my own opinions. I take absolutely no responsibility for consequences which may result from your actions. You should consult with an attorney and / or accountant to determine the best choice for your personal situation.
Ted
Any idea which is best to setup though for this type of venture?
u4ea
There's no "best" without getting into a lot of personal details with someone who really knows what they're talking about and is interested in your own interests.
Something to think about is that with affiliate marketing you can become profitable quickly. Most people who start companies do so with significant losses in mind for more than one year. That's the angle many books take on the subjet and doesn't fit quite right.
The best advice you're going to get here is to ask a pro for help.
With some merchants sending emails with usernames and passwords, how can you be sure that they will carefully guard your social security number? IMO, repairing identity theft problems is much more of a hassle than establishing a legal entity to protect yourself.
Note: I did not post the original question to Google. It is someone else.
Ted
My answer would depend mostly on net worth. If someone is judgment-proof, then they might proceed without a care. OTOH, if they have managed to accumulate a little equity (somewhere, anywhere) then they need to consider managing their risks just as they do their assets and a corporate shell fits the bill.
When I questioned my accountant on setting up an LLC, he told me that the protecting your personal assets is only valid if the company has some type of income/assets. He said if the company does not own anything of value, that a judge will still hold me personally responsible, which would put my assets at risk. My accountant said you can't just set up an LLC, etc and say, ok, now no one can touch me. The company must have some assets to seize (and a reasonable amount, not a stapler and some pens, LOL), or, according to my accountant, the juge can rule that you are personally responsible. He called it some type of ruling by name, but of course, I can't remember what it was called.
Yeah, but there's a good defense for corporations that are bootstrapped on sweat equity (which fits the description of many, many small start-ups). All-in-all, courts respect the corporate separation far more than they allow it to be broached. If it's proven that you set it up to defraud creditors that's another story.
Which state is best to incorporate in or should I start an offshore corp?
Keep in mind the legal (you may have to use the courts in jurisdictions that require you to travel) and tax implications (you may have to file dual tax returns) of incorporating elsewhere. Larger companies have traditionally incorporated in Delaware. In recent years, Nevada has been a strong runner-up choice. If necessary, you can always change your state of incorporation down the road.
Disclaimer: As mentioned previously, I take absolutely no resposibility for the accuracy of this information or for your actions. Please consult with an attorney and / or accountant to determine the best course of action for your specific needs.
Ted
As said before, I veered away from this. Between the different type of corporations; C-type, S-type and LLC; the tax, cost and overhead was not soemthing I was financially ready to take on.
I needed to be able to open a mercahnt acct and accept CCs over the web so instead, I filed for a DBA as a Ficticious Name. (For florida it can be done at www.sunbiz.org) I used that to open my business acct at my bank and then filed for my merchant acct against my business acct. The Ficticious Name allows for you to legally do business as another name without the problem (and unfortunately w/o the protection) of a Corp. When my business is bigger, I might consider incorporating at that point. But whether I go with LLC or S-type, I would consult a legal advisor. The LLC legal structure is VERY new and there is a lot of grey area as far as how the tax and what can and can't be done.
Best thing I can say is do your homework and get professional opinions. I hope I answered at least a few of your questions. :(
