View Poll Results: What type of business are you?

Voters
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  • Sole Proprietor

    17 53.13%
  • Sub Chapter S Corp

    1 3.13%
  • Chapter C Corp

    4 12.50%
  • Limited Liability Partner (LLC)

    8 25.00%
  • General Partnership

    1 3.13%
  • Other

    1 3.13%
Results 1 to 11 of 11
  1. #1
    Believe knight01's Avatar
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    August 14th, 2006
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    What type of business are you?
    Without getting into great detail that you wouldn't care about. I'm kicking around the different types of legal entities. I'd like to hear your feedback on the type you are or are going to become.

    I've always operated as a sole proprietor and never really looked at other options that closely. I'm vaguely familiar with 'sub chapter s' and 'llc' types of business structure. I think going all the way to a 'chapter c' is overkill.

    If you're a sub s or an llc, what drove you to what you chose? Are there other options for a one person show?

    I've heard about the benefits of incorporating in Delaware or Nevada, but again is it really worth it for an affiliate?

    Do you operate different websites / ventures under the same legal entity or do you setup a different entity for each site?

    Not looking for legal advice, when the time comes I'll contact the appropriate professionals. Just some feedback on what you did and why.
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  2. #2
    Full Member
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    March 13th, 2008
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    1-person shop - lonely owl.

  3. #3
    ABW Ambassador
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    LLC is great for health insurance...

  4. #4
    Beachy Bill's Avatar
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    November 20th, 2005
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    My business is currently an LLC. But incorporating is on the near horizon. My CPA is beginning to work on it now.
    Bill / Marketing Blog @ 12PM - Current project: Resurrecting my "baby" at South Baltimore..
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  5. #5
    Affiliate Manager Alan Hamilton's Avatar
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    March 13th, 2006
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    There are several reasons to incorporate. One that may be of interest is that incorporation affords you protection from personal liability in the event of litigation that could involve any number of things. That you are an affiliate, and not the merchant or manufaturer of goods does not exempt or exclude you (as a sole proprietor) from being enjoined as a defendant in a damage claim. I would never have any kind of business that was not a corporation as I value my personal property and assets too much to risk being a sole proprietor. My best advice to you is to check with a CPA and s/he can give you all the details. It will cost you a little, but that little cost can return great benefit.
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  6. #6
    Believe knight01's Avatar
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    Quote Originally Posted by Alan Hamilton
    I would never have any kind of business that was not a corporation as I value my personal property and assets too much to risk being a sole proprietor.
    Alan,

    Do you run each business under it's own corporate umbrella or just one corp with multiple businesses under that corporation?

    Quote Originally Posted by Beachy
    My business is currently an LLC. But incorporating is on the near horizon. My CPA is beginning to work on it now.
    Beachy, why are you moving away from being an LLC? If you don't mind me getting too personal.

    Quote Originally Posted by Merchant Consultant Team
    LLC is great for health insurance...
    How does being an LLC help with health insurance? Would a sub chapter s also be of help in purchasing insurance?
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  7. #7
    Visual Artist & ABW Ambassador lostdeviant's Avatar
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    My company is a Sociedad Civil.

  8. #8
    Affiliate Manager Alan Hamilton's Avatar
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    Quote Originally Posted by knight01
    Alan, Do you run each business under it's own corporate umbrella or just one corp with multiple businesses under that corporation?
    Knight, as some of of our businesses are online marketing related and some are offline investment type, each is a separate corp. We have a parked corp on deck that will eventually become the umbrella corp for our online subsidiary operations.
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  9. #9
    ABW Ambassador ladidah's Avatar
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    I am a sole proprietor for 5 years but I am planning to become an LLC in a few weeks whenever I get all my paperwork sorted.

    As Alan has stated one benefit is the liability issue and that is mainly why I am changing. My previous stint as a sole proprietor in the offline world was not as risky but going full force into AM I would like to cover my bases and protect my a$$-ets!

    I was suprised to see that some companies like Fidelity are LLCs.

    I didn't vote because I am in the interim

  10. #10
    Member
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    June 22nd, 2008
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    Check This Alan ...
    Become A Business Development Corporation and then have all the other corporations stand alone but be the BDC clients with the BDC owning some stock in them. A BDC as far as I can find out pays NO INCOME tax, they must pay out 90% of their net cash flow to shareholders though.

    My legal beagle is looking into setting one up for me. You might want to check it out. A company called Apollo Investment (AINV) is set up this way.
    They have a real high yield pay out. They HELP various business get started, with financing and such.

    From what I can figure out, all the payouts to shareholders (YOU) are booked as dividends which have a 15% tax rate.

    I don't know if they have a shareholder number requirement like a REIT which has to have a 100 shareholders to be able to pass thru the income to shareholders but I will soon find out.

    I think this trick is killer if we can do it, since you can structure ALL new websites and such as separate business with separate domains and all.
    They pay the BDC 'consulting fees' and interest on loans and such. Since these new enterprises are corporations, they can offer you stock for your services. You can build up these various online businesses into profitable enterprises and sell them. The BDC then books a profit on their portion of the stock sale. And you on the stock you own ... both entities get long term gains if you don't sell the Website until it qualifies for long term gain treatment. Plus, you can take the first batch of dividends and buy low income housing credits and shelter 10% to 15% of your investment for 10 years ... these are tax credits which reduce your taxes dollar for dollar. And you own a share in an income producing property.

    Money for nothing, but a ton of paper work.

  11. #11
    Newbie
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    July 22nd, 2008
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    Austin Texas
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    I have operated as a sole proprietor, LLC, C and S corps over the last 20 years. C corps are really only good if you are raising cash, planning on selling your stock, and/or desire to experience double taxation. S corps are the easiest to manage and give you the liability protection with the best tax advantages.

    Incorporation states are really based on managing your identity, liability and/or tax status. I always use Texas as I understand their laws the best – know your state and get a local attorney. I keep all affiliate marketing activities under on s corp umbrellas and put other assets in different entities.

    LLCs are good for having partners when you need to act like a partnership with the protection of a corporation. If you operate solo, go S corp as it is easier.

    Good luck!

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