After browsing through a few hosts I noticed a lot of hosts are now, Inc. or an L.L.C., or so it seems.

After doing a bit of research through federal, state records, more then half the companies that advertise that they are indeed a Inc, or L.L.C. aren't even registered at all.

I could understand that it is a big shortcut if your a small company as you dont have to pay any state fees and such, but still. You have to understand your putting yourself at a high risk. If someone decided to sue you and actually won for some reason, you will lose your personal assets.

Plus, you can even be sued for impersonating a corporation or l.l.c. and can be considered business fraud.

I am just going by what ive heard from lawyers and friends. If your cant afford to go Corp or L.L.C., at least get it registered with your state as a Sole Proprioter or Partnership. =P

I legally incorporated my company as an S Corporation, anyone could check it with the Secretary of State.

Before I was an S Corp, I was sole proprietor. And it wasn't even expensive. Only cost $6 to register my business at the county courthouse. I've talked to a few people who are making $4000+ per month and they haven't even filed taxes for it and not even registered or incorporated. I wonder whats going to happen to them. :stickout:

Are there really non-incorporated companies advertising with "Inc." in their name?

Originally posted by vizhost.com
After doing a bit of research through federal, state records, more then half the companies that advertise that they are indeed a Inc, or L.L.C. aren't even registered at all.

how did you do your research? is there any website one can use to verify the existence of an inc or llc?

Greetings,

Probably something like http://www.choicepoint.com

even through www.bbb.org by searching for them

I'm also incorporated in the state of Wisconsin, incorporated October 18, 2000. It's not that difficult and not that expensive.

The BBB database is far from complete. We're not listed, as far as I can tell, but are still a completely legitimate corporation. We have simply not had enough "activity" to get a report.

Is it better or cheaper or any advantage incorporating in Delaware?

Inc. here. C Corp.

Taxes in Delaware are quite low. 15%

that is 15% also from your bank account for the earnings you make?

Well I could pay them cash but the IRS might start to wonder why I have that amount of cash available and where it came from :)

Just 15% of my earnings. I'ld say that's a bargain.

Ofcourse when I take money out of the company and pay myself a salary then I have to pay an additional 52% income taxes.

That kinda... sucks. So that is why I leave it all in the company for now and invest it in growth instead of giving myself a salary.

Locating your bank account in another country or transfering your accounts via bank transfer to another country, reduce the taxes you have to pay? No salary, damn how do you spend money then:D

You must be using your credit card alot instead of withdrawing cash.

LLC for us.

My lawyer recommended that I use strict legal documents before incorporating. I run as a sole proprietor and pay taxes.

He recommended that until I take on clients that are grossing more than my company in a month period, just use strict legal documents.

I primarily host local businesses and my development/design clients, and therefore have less anonymity than other hosts.

Originally posted by Yaser
Is it better or cheaper or any advantage incorporating in Delaware? There are advantages and disadvantages. Try this search; the topic has been discussed a lot (and doesn't really belong in this thread):

http://www.webhostingtalk.com/search.php?action=showresults&searchid=2419941&sortby=lastpost&sortorder=descending

Originally posted by vizhost.com
After doing a bit of research through federal, state records, more then half the companies that advertise that they are indeed a Inc, or L.L.C. aren't even registered at all. I'd be very surprised to find that to be true. Primarily I see companies that make no claims at all to be incorporated.

There are no reliable federal records of this, since incorporation in the US is done at the state level. Most states do make the records available online, but they're often far behind in doing so... if you check on a corporation that was formed in the past six months, I wouldn't be surprised for it not to be listed yet. And of course you'd have to know in which state they're incorporated, which might not be mentioned on their site. Also, some could be incorporated under a different name their hosting brand (granted, though, in that case they shouldn't be using "Inc." after that brand name -- but if they don't do that but mention somewhere on the site that they are a corporation you might jump to an incorrect conclusion).

The BBB, which was mentioned above, isn't a reliable source of this information. They have records only of member companies or those for which complaints have been filed.

Well for UK companies you can do a check on companies house for free.

With basic info, so you can see my company here for instance, even though we are not an actual hsoting company:

http://ws2info.companieshouse.gov.uk/info/info.cgi?cname=WOTR%20LIMITED&cnumb=SC242631&status=%20&id=9374bc92366ee441b9645be2948be6e8

But is there no US central register?

I have a question for all this INC or LLC conversations. I live in wyoming, i went down to the local courthouse to aply for a business license. They said that in our county there is no need for a business license. I then asked them do i have to apply with the state for a business license, they said the same thing again. Aslong as my business is located in my county and run from this county i do not need a license.
Any ideals on how to pursue this?

Originally posted by Digicreation
I have a question for all this INC or LLC conversations.
[...]
Aslong as my business is located in my county and run from this county i do not need a license.
Any ideals on how to pursue this? Two different things. When you go into business, you have a few choices as to which type of business entity you will operate as. You can choose to be a sole proprietor, which is just you being "in business." Or, you can create a separate legal entity, like a corporation or LLC, meaning you own that entity (or part of it), and that entity is in business. There are liability, tax, and financial advantages and disadvantages to each choice.

A "business license" is simply a local govenment's permit to do business -- pretty much like a drivers license is a government's permit to drive a car. In most jurisdictions in the US, for most businesses and industries, there are no license requirements (while some professions -- like lawyers, doctors, plumbers, contractors -- have to licensed almost everywhere). Apparently that's the case where you live; you don't need a license. People who live elsewhere should do just what you did and check with local authorities.

Greetings:

If my memory from when I took "Business Law" in college is correct, I believe it is illegal to use a legal entity name such as Inc., Incorporation, LLC, and the like without actually being legally formed as one.

Thank you.

P.S. Dynamic Net, Inc., our parent company is a registered PA C Corp; and even We Manage Servers is a registered DBA (doing business as).

Originally posted by dynamicnet
If my memory from when I took "Business Law" in college is correct, I believe it is illegal to use a legal entity name such as Inc., Incorporation, LLC, and the like without actually being legally formed as one. Yes it is. That certainly doesn't mean it never happens. I'm just skeptical of the "more than half" statement -- I'd guess there are a few hosts here that do it, but not more than that.

Greetings JayC:

While I believe you in that it happens, I guess I don't understand chancing to lose everything (including personal assets) over $300 or so to do it legally.

Thank you.

Originally posted by vizhost.com
After browsing through a few hosts I noticed a lot of hosts are now, Inc. or an L.L.C., or so it seems.

After doing a bit of research through federal, state records, more then half the companies that advertise that they are indeed a Inc, or L.L.C. aren't even registered at all.

I could understand that it is a big shortcut if your a small company as you dont have to pay any state fees and such, but still. You have to understand your putting yourself at a high risk. If someone decided to sue you and actually won for some reason, you will lose your personal assets.

Plus, you can even be sued for impersonating a corporation or l.l.c. and can be considered business fraud.

I am just going by what ive heard from lawyers and friends. If your cant afford to go Corp or L.L.C., at least get it registered with your state as a Sole Proprioter or Partnership. =P In order to check whether a host is actually incorporated, you'd have to do a search of every state's corporation records, and many of them require you to pay money to do so. You can incorporate in ANY state, not just the state your business is in. Many businesses incorporate in Delaware and Nevada due to tax and other reasons.

-Josh

Keep in mind that corporations can own/have different divisions underneath the main corporation.

You can be: Main Corp, Inc.

Then have Fictitious Names/DBA for each division or web site.

We can be Main Corp, Inc. and file Fictitious Names with the state for:

website1.com
website2.com
website3.com

Basically this allows us to open merchant accounts, bank accounts under, and do business as website1.com, website2.com, website3.com etc.

website1.com, website2.com, website3.com do not have to be a seperate corporation and can simply be a part of Main Corp, Inc.

Exactly what eric said. If you search abchosting4u.net, you wont find anything under corporation records. Usually there would be a parent company which is INc or LLC. Other operations are underneath it.

In our case, we have armia systems, INc as the parent company. incorporated in illinois. Our hosting business hoststation.net is a subsidiary and a DBA. Most of the operations are like that.

Yep, unless someone is coming out and saying something on their site like "XYZ, Inc., a New York corporation," you'll have a hard time really being sure what to look for and where.

were registered locally here

I don't see why someone would want to INC his hosting business... I think a simple registration would be enough.

Just a quick question related to this, my company is currently registered as "Amdac Systems". Upon incorporating it (in Canada), can the name be changed at the same time to "Amdac Corporation", or am I forced to keep Systems in the name?

In response to the initial post, I don't really see the point in lying about a company being incorporated if it isn't. I wouldn't expect it to happen too often.

Originally posted by Nimbia
I don't see why someone would want to INC his hosting business... I think a simple registration would be enough. Obviously, you've never dealt with business law before. :D Incorporating a company limits your liability to what you've invested in your business. If you don't incorporate your business and you get sued, you could lose everything, while if it's incorporated, all you risk losing is whatever you've put into the company. However, corporations are taxed at a higher rate than non-incorporated companies.

-Josh

Originally posted by Joshua
However, corporations are taxed at a higher rate than non-incorporated companies. I was all in agreement with you until that sentence. :)

The federal corporate tax rate in the US starts at 15% for the first $50,000 of taxable income. There actually is no tax rate for "non-incorporated companies" -- I assume that what you mean by that term would be companies operated as sole proprietorships. Company net income in that case would be passed through to the taxpayer as Schedule C income. For single taxpayers, the 15% rate is only for the first $28,400; after that the rate increases to 25%.

Of course, the single taxpayer rate starts out lower -- 10% for the first $7000 of taxable income. So if you have no other income and your business makes less than that, a corporation with the same income would be paying a higher tax rate. But say you're working another job where you make $30,000 and running a business on the side, making an additional $10,000... your effective base tax rate on that business income is 25%. A corporation making the same $10,000 would be taxed at 15%

The comparison gets a little complicated as income increases, because while the individual rate (and the married rate, but lets keep this simple) increases along with income, the corporate rate goes up to 39% after $100,000 and then back down after $335,000 to 34%, and then back up again... hitting 38% after fifteen million in income, then back down to 35%. The individual taxpayer hits 35% at $311,950 in income and stays there.

But the point is that while there a lot of other factors to look at when weighing the pros and cons of incorporation, it's usually an advantage when taking the narrow view of only comparing federal tax rates, unless you're talking about corporate income in the hundreds of thousands and beyond.

Someone's done a lot of research :D

Originally posted by Amdac
Someone's done a lot of research Heh... well, I always do before I post. :)

Seriously, I knew the basics having researched it even several years ago when I set up a corporation for the first time. One of the pluses was to take advantage of that 15% corporate tax rate. So then it's just a matter of grabbing the current tax tables to have the accurate numbers on hand.

Well, when I went to get my company inc, i stopped by to check a few names that were supposed to be incorporated.

they were not. xP

At any rate, we filed for S-Corp as well as we are not really large enough to pay double taxes. =)

Well, I would rather prefer to pay just my income, then my income and corp tax. =)

This might be a good poll question, eh?

What's your Business Form for your hosting company...

1) Incorporated (c-corp)
2) S-Corp
3) Limited Liability Corp (LLC)
4) Sole proprietorship
5) Other - please specify
6) What's a "Business Form"? ;-)
7) I'm only 14.... lol

I don' t know how polls work. Do moderators have to do that? Or admins or something?

Daniel

Originally posted by JayC

. Most states do make the records available online, but they're often far behind in doing so...

Actually most states now have it posted within 48-72 hours after they file the paperwork.

Only a few states are left behind anymore.

Greetings!

For the Philippines, corporate status is handled by our Securities and Exchange Commission (SEC). To search for registered companies, please look here:

http://www.sec.gov.ph/search/

Try searching for Castlemelody. :)


Take care everyone!

We are incorporated in Delaware.

DanPhx,

you just need to go to new topic on top of the main page where all the threads of a particular area are, and in the end you can select the option of Yes post a poll

http://www.webhostingtalk.com/newthread.php?s=&action=newthread&forumid=6

thanks :)

Oh cool. Thanks Yaser.
Silly me, I never noticed that before.

thanks :-)

We been "LTD'ed" in Canada :D