Hey if you want to start hosting, you need a liscense or no? I am not sure totally and I am really confused. I hope to hear from some of you.

Yes you do. If you make money selling stuff online, its a business and you do require a license

macdonaldp, not very true, i do not beleive you need a license or there would be lot of problems for people signing up for a server or reseller account planning on starting a hosting company, and not having licenses. I doubt more than 75% of the companies in the hosting industry have licenses or are registered corporations.

than again we are incorporated and registered and pay taxes.

I have a business license I don't see why so many don't(cough kids). Maybe they are trying to cheat on their taxes or something. The forms are quite easy to fill out.

Of course you need a license. its a business.
I know of all us states that require any business (including online businesses) to have a license.

This also includes Canadian cities as most cities in Canada handle business licenses rather then provinces.


An online business is no different then a land location in a mall or something.

so are you saying a business can be fined or even closed if found not having a license. there has to be some guidelines you have to meet for being required a license.

There are usually either state laws or in my case a city bylaw.
http://www.city.saskatoon.sk.ca/org/development/services/business_licenses/

It varies place to place.

I see.. still though if a 14 yr old kid started up his reseller account was banking 100k/mo. (just using it as a crazy example) and i reported him to his local goverment, his business can be seized..

that sucks, heh.

But how many times do you hear that happening on the net in a day? none?

Originally posted by SIS-Network
But how many times do you hear that happening on the net in a day? none?
Yeah thats totally true. It rarely happens.

Depending on where you are, there may be a license required or there may not be.

License for what? Is webhosting a regulated business that requires a webhosting license? I'm not aware of one (doesn't mean there isn't, I'm just not aware of it). Yes, you need to report your income & pay taxes. There may be permits required for some of what you are doing (business zoning, etc). Webhosting license? I'm in midwest USA.

I doubt it would be classified as a webhosting license. Probably under electronic commerce (ecommerce) or internet revenue or something.

Then broaden this question to include terms like electronic commerce or internet revenue. By whatever name, can anyone point to a federal license required to conduct business as a web host? Or even a state license? You need a license to practice medicine or raise & sell minnows or drive a truck. I don't believe you need a license to be a web host.

As i said it wouldnt be classified as a webhost, but webhosting probably falls under that category, im still looking if there is a license required for it in florida, i doubt that, our lawyers would not have over looked this when we had our incorporation documents and registration of our name done.

Sorry if I'm sounding beligerent. I'm multitasking and something else has me wound up :-(

I'm in Nebraska and am looking through what I can find online. I'm certain that webhosting falls in a catagory that may include things that may require a license. I'll take my example from earlier in this thread... I get a reseller account and make 100K per month as a web host. Did I need to get a license to do this? I looked at a link earlier in this tread and it looks like I would if I were in Saskatoon but that's not a license to web host. That's a local (regional? don't remember) license to conduct _any_ business. I'm not familiar with Canadian law but there isn't a broad US law that requires you to have a license just to conduct business. Yes, some businesses do have licensing requirements but I don't believe web hosting is one of them. Again, if someone can point one out, please do.

I don't think it's critical to get a business license as long as you pay taxes on your income. As long as you're reporting it as income, the IRS doesn't have much to complain about.

Home-based business licenses, from what I understand, are used basically to ensure that you're not going to be receiving large deliveries, posting huge signs in your front yard, or generally annoying your neighbors when you conduct business. That doesn't mean, however, that I would skip out on getting one -- but if you're not making that much money and you have a regular job on the side, it probably isn't worth it to get a business license.

what if you are a 16 year old boy that doesnt pay for income tax?

I just posted this exact same thing in another thread, here it is again:

It depends on your county/city laws.

In the city here, you need a business license for anything, the basic license in Huntsville is like $28 and then the renewals are based on revenue (no clue as to amounts). In Athens (AL) where I lived when I started this, it would have cost around $400 to get a license because I'd have needed special permission to run a business in a residential zoned area, etc etc etc (buncha bureaucratic crap mainly) so I used an address I own in the county for the business mailing address. In the county (Limestone and most other AL counties) you don't need a license for a "service based" business so I didn't even bother with the license just got a DBA at the bank and went with it. Later on I went with an LLC registration and that's where I am now.

What will work in your neck of the woods you'll just have to find out, call the county clerk and see what they say.

Addendum: as for your business being closed for no license? Depends on where you are, most places would fine you a bit and then make you get a license to continue operating.

Not paying income tax or other taxes is a whole other ball of wax, business or not, licensed or not, you are supposed to pay your proper taxes and if you don't you're risking some major bad mojo. Heck I paid over $600 in penalties last year (state and federal) because I paid my taxes late and underpaid my estimated tax. The fact that at the time I had no business license (county based business, no license required) was irrelevant.

A lot of the confusion in threads like this one is that people use the term "business license" inaccurately.

In the US in general, a webhost wouldn't need any kind of license. In some localities, however, you need a license to operate a business out of your home, for example, and that might accept some people regardless of what type of business they're in. Some localities require a license no matter what your location -- but those are exceptions in the US. As Gary said above, you'll have to contact your county clerk or city hall to find out if there are those kinds of local requirements.

On the other hand, if you're using a name other than your own to conduct business you probably need to register that name as an assumed name or "dba." That requirement exists in all states, though it's usually done at the county level. So, there's a requirement to register, but it's not correctly called a "business license."

Same thing if you incorporate. Obviously you have to file forms and pay fees -- but it's not a "business license."

edit: nevermind

Ok guys this is a hosting I am starting on the new I am talking about. At my age I have to pay these taxes ahd stuff as I am only 16? Most of your posts are confusing me totally.

Contact your county clerk and ask them. The least you may have to do is file a DBA (Doing Business As) and file a Schedule C on your taxes at the end of the year, that is what I did the last few years until I incorporated this year.

Even at the age of 16 I have to do taxes?

Originally posted by Dzelil
Even at the age of 16 I have to do taxes?

Yup, you bring in $$$, you have to pay taxes

If the IRS exempted minors from taxes then people would put their businesses in their childrens names. :D

If I pay the taxes would I need to get the license for the hosting on the net I will be doing? What if I dont make much money of this hosting? Like 100$ a year?

Well I have just called my City Clerk and they have told me I do not need a city buisness lisence, I would only need one if I was opening a buisness like a store downtown or something on these lines.

Dzelil: You're probably going to operate as a sole propietor. In this case, your business profit/loss would be on your Schedule C and included on yoru 1040 when you file your taxes each year. You will have to pay Self Employment tax, as technically, you're self employed. If you estimate your income to be less than a certain amount (can't remember what it is off hand), then you might be able to get away with not paying the quarterly estimated taxes. If you make more than the breaking point, then you'll have to pay SE tax (I think it's 15% of income) and pay/file quarterly SE tax.

Doesn't stop there, depending on your state, you may be required to pay taxes there. If you need a business checking account, you'll need to get an FEIN(Federal Employer Identification Number to identify your business, and a DBA (also known as a ficticious name certificate); unless you can find a bank that'll allow you to operate wihtout these.

And even that's just the beginning for JUST a sole propietorship. If any of this sounds confusing and you're serious about startinga business (any business), consult a lawer and an accountant; don't rely solely on forum information and information on the net.

Well I have talked it over with the city clerk. They told me I dont need the license but would I be able to pay my taxes through my mom or my parents?

Originally posted by JayC
A lot of the confusion in threads like this one is that people use the term "business license" inaccurately.

In the US in general, a webhost wouldn't need any kind of license. In some localities, however, you need a license to operate a business out of your home, for example, and that might accept some people regardless of what type of business they're in. Some localities require a license no matter what your location -- but those are exceptions in the US. As Gary said above, you'll have to contact your county clerk or city hall to find out if there are those kinds of local requirements.

On the other hand, if you're using a name other than your own to conduct business you probably need to register that name as an assumed name or "dba." That requirement exists in all states, though it's usually done at the county level. So, there's a requirement to register, but it's not correctly called a "business license."

Same thing if you incorporate. Obviously you have to file forms and pay fees -- but it's not a "business license."

READ THIS ONE CAREFULLY--

Good Post JayC--there is a differenc between an entity, registration, and a liscence. Your entity is what your business operates as: sole-prop, partnership, corp., etc. A liscence is typically only required for companies selling certain kinds of physical goods, but again THIS DEPENDS ON WHERE YOU LIVE. Simply call your Secretary of State's office and they will be glad to inform you. And last, you may need to register your business with your state and county and village but that depends on where you live as well.

Originally posted by Dzelil
would I be able to pay my taxes through my mom or my parents?

I doubt you could do that. Plus, There is no reason why you can't file your own taxes...

Originally posted by macdonaldp
Of course you need a license. its a business.
I know of all us states that require any business (including online businesses) to have a license.

Your information is completely incorrect.

In the county that I live in, there is no formal business license required to operate a web hosting, web design, computer repair, marketing or ISP from your home unless you require special zoning for equipment. If the business can be run with no specialized hardware or such, the only thing you need here is a DBA and that is only if you are going to operate under a vanity name.

So, it is not required in all states or jurisdictions.


Originally posted by Dzelil
what if you are a 16 year old boy that doesnt pay for income tax?

If you are 16, you simply do not need to be operating a hosting business. There are too many legal problems that arise.

This I believe to be true in all states (someone correct me if I am wrong) but you have to be 18 or older to be able to enter into any form of legal contract. You have to be able to enter into legal contracts to be a hosting provider. If you can't enter into legal contracts, your TOS would be useless.

There are MANY other legal ramifications to starting a hosting service if you are under 18. I strongly recommend you do some serious research before you try. Many of them could quickly cause legal problems for your parents/legal guardians simply because they are legally responsible for your actions, you are not.

In short, while I admire your entrepreneurial spirit, do not do it. There are many other business ventures you can try that would have much better results and much fewer legal problems for someone under 18.

Good luck.

Originally posted by Two_A_T
This I believe to be true in all states (someone correct me if I am wrong) but you have to be 18 or older to be able to enter into any form of legal contract. OK. You are wrong. :)

You do not have to be 18 in order to enter into a legal contract. A 16 year old can sign a contract legally. So can a 12 year old, or a 2 year old (OK, actually signing might be a problem ;)), with no legal worries. It's the other party who would have something to worry about, because that minor can not be legally compelled to abide by that contract.

So there's no reason for a 16 year old to be cautious about entering into a contract, but an adult or legit business entity should be cautious about entering into a contract with a 16 year old.

And actually in Saskatoon you can get a business licence at any age. There is no law preventing you from getting one because of your age.

Originally posted by JayC
... because that minor can not be legally compelled to abide by that contract.

So there's no reason for a 16 year old to be cautious about entering into a contract, but an adult or legit business entity should be cautious about entering into a contract with a 16 year old.

Exactly my point. If it's not legally enforceable, it's not a contract... it's a waste of time!

Plain and simple, a minor/juvenile should NOT be running a company that is responsible for taking people's money and providing a long term service! I have seen (here on WHT) situations where a KID ran a hosting business, there was a problem with all of the clients accounts on the server and no one could contact the kid to get support. Why? The kid got grounded for a month and was not allowed to use the computer! All of the customers were left hanging in the breeze.

Personally, I think there should be legislation making it a crime for anyone under the age of 18 to start, own, or run a hosting business. It happens way to often and too many people get hurt!

In California, web hosting is considered a "service" with no tangible goods involved, and is therefore not subject to tax. That's just California.

Just an FYI from someone who listened to others and didn't get a license...

We got busted by the county for not having one ;-). I don't care where you are, the minimum fees will not be nearly as high as the fine for not have one.

FWIW.

When i started working at 15 for internet services companies, most of the owners wanted me to file for income taxes, my first job, the accountant showed me how to do it and all, everytime they noted, its better to file them and get it over with than get the fines for not doing it.. much better.

XCore, i totally agree with you :).