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  1. #1
    Full Member SpikeDo's Avatar
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    Having made a small bit of money from affiliate sites, I am now looking into forming a business entity of some type. Need some input though from the veterans on this issue. What type of legal entitye did you form (e.g., corporation, LLC, sole prop.) and why? The info will help prepare me for my chat with my accountant. Thanks.

  2. #2
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    We formed a corporation - the lawyer told us it was better because any liability cannot affect us. The corporation could go out of business, but it would not affect us negatively (i.e. no creditor can take our house away).
    There is no other advantage about it, but you are in the US, so it's better for someone from there with experience to give you details...

  3. #3
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    Back in 97 when I was more focused to be a web design firm I formed a sole propriety.

    This was on the advice of my PHD accountant brother-in-law.

    There are pluses/minuses to each such as taxation, liability etc. Overall it was just better to go as sole propriety for me. Had I reached the point of having employees maybe things would be different. I think as a corporation you need to elect officers and prepare annual reports.

    I like to keep things simple.

  4. #4
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    If you do this all by yourself like me then sole proprietorship is the way to go. There are some good sites out there with the pluses and minuses of each. Heres one i found, might be better ones out there:
    http://www.myownbusiness.org/s4/index.html

    "The successful man is the average man, focused."

  5. #5
    Full Member SpikeDo's Avatar
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    SP seems to be the best way to go to keep things simple. My only issue is liability. I have a medications site and if someone sued me, the SP wouldn't protect my home and other assets. I hoping more veterans would weigh in on this issue.

  6. #6
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    You can create an LLC which would offer you some level of protection, in almost all ways it is a sole sp, except you are offered the "corporate shield" for liability.

    But if you make over $50,000 or so from your business, it is well worth the hassle of going with an S or C corp. The reason being, you can take X a month as pay, and then X a month or quarter as a dividend - which is taxed as a capital gain which just recently got cut in half. The pain is payroll tax, argh, ugh, gnashing of teeth, the amount of paper work involved in payroll tax is ugly, make sure you have somone to help you with it.

    Talk with an accountant, but if he doesn't bring up the idea of taking out some of your money as capital gains, ask him.

    I have both LLCs and S corps, the LLCs are just to separate some functions which I worry over liability or I partner with someone etc.

    Chet

  7. #7
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    I went LLC, because my accountant and attorney told me to!

    Pay an attorney his $75 bucks and an accountant there $250 to go over your books and do what they suggest!

  8. #8
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    I'm not in US, but sounds like similar choices from the posts above.
    I've used LLC's for 14 years running various computer businesses and works ok for me.
    If you want a really nice tax regime, move to Dubai Internet City, 365 days sunshine and no tax for 15 years.

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