Ok heres what I am going to do:

I am 15 and am trying to start a hosting business

I have rented a dedicated server from servermatrix, so far they have been wonderful

I am getting an internet bank account from my parents.

Is there any legal issues with this?

My ultimate goal is to make exactly $200/month off of shared, reseller, and semidedicated servers (vps). This will pay for the server and any billing/support software that I purchase. Is posting offers and requests in forums going to get me to my goal in 2 months?

Any good tips anyone can give me?

Thanks

I'm not sure of the legal implications of a minor starting a business, but there is sure to be some restrictions. If your parents are helpfull enough you can probally legally get something going. I would talk to a lawyer if possible to find out all the exact details.

But I just thought I would comment on your plan, $200/month is a very small profit. You should reconsider and make your plan more profitable, you should make at least 3 or 4 times the server costs if you hope to be able to stay afloat.

Also, because of your age you need to consider the costs. Chances are the 3 or 4 months will come directly out of your pocket, make sure you have enough money to backup your business. You should also consider how much you have to invest in advertising expense as this will be a big part of starting a business.

Yes, there are many legal issues dealing with this. First and foremost, you are not of a legal age to own a business. If you want to do this legally, you need to have your parents legally register the business and then pay you as an employee.

If you operate a web host without that legal business entity, you open your parents up to lawsuits if someone believes they did not receive proper service from you and decide to sue. Running a web host is not like mowing lawns. You are dealing with people's livelihood in a lot of cases. When someone's web site is down and they are unable to process orders for their business they will be quite mad that you are in school and unable to assist them.

I wanted to offer my web development, print design, and marketing clients a hosting option so I can handle all part of their websites.

As for being underage, yeah I will have to start a business under my parents. Thanks for pointing that out.

Are there tax issues with a parent being a sole proprietor?

Thanks
Samson

well i suggest start from something small and then grow bigger and bigger i have just started, a web design service and also a hosting service just back im also the same age as you. I am just starting out with a reseller until the members increase. Then as i make money i will probably increase too a Dedicated Server

As far as tax is concerned just keep track of all revenue and expenses. Make sure you keep documentation of it all. Then fill out the proper tax returns at the end of the year and pay what you owe. Once you grow to a point you make more then $30,000 a year you shold see an accountant as their will be many more tax complications at this point. You should talk to someone who knows a little more when you have the time, there are many little tips you can use to get out of paying to much tax.

In canada if you wish to run a sole proprietorship in a name other then the owners personal name you must register with your province for a small yearly fee. Or it can be in the owners name and no registration is required. You can register at a local registry company, its very easy and doesn't cost to much.

You should however look into an Incorperated business, say you hosted a company processing thousands of dollars of sales, then their website was destroyed. If they can prove you caused them a certain amount of finacial loss your parents could lose everything and end up making payments the rest of thier lives. When Incorperated only business assets can be touched. Just a thought ;)

Originally posted by samsonh
Ok heres what I am going to do:

I am 15 and am trying to start a hosting business

I have rented a dedicated server from servermatrix, so far they have been wonderful

I am getting an internet bank account from my parents.

Is there any legal issues with this?

My ultimate goal is to make exactly $200/month off of shared, reseller, and semidedicated servers (vps). This will pay for the server and any billing/support software that I purchase. Is posting offers and requests in forums going to get me to my goal in 2 months?

Any good tips anyone can give me?

Thanks

2 months? sorry, dude... it ain't going to happened. some people didn't even make a dime for a year!

like someone else already said...be prepare to pay out of your own pocket for at least few month.

I see that you have a link to a web design business. Your first few months, you may want to try and keep that going, advertising your services on WHT, as well as your new hosting service. Try to get your clients to host with you, and find new clients, design a site for them, and offer to host them as well. That's what I do, and it works well for me.

Now, as long as you get your parents to essentially "sign off" for you that you are allowed to use their household to conduct business, it is legally "okay" for you to operate a business under a ficticious name. I would advise you to visit your local city call on oridnances that would otherwise limit your business venture from proceeding.

On the subject of tax, I don't know exactly where you live, but in the state of Florida there is a self-employment tax, and that's about it. You just file like you would file at the end of the year with regular income tax. Consult a CPA or accountant about this.

Good luck! I started at 16, wasn't too hard :)

Maybe this will help you:

In the US, the law states you can't start your own business untill you're 18+ old. Simply, because you have to submit a W9, get a TIN, and file small business taxes. You could talk to you parents about doing this for you. Another, you are not even garunteed you will even make one sell. Good luck

Roman

Your TIN is your social security number if you are a sole-proprietor. You can sumbit a W9 at any age, and as long as your local district will give you a home occupational license with your parents "co-signing" so to speak, you are of legal age to start a business.

you can start business in the name of your dad or elder brother.

It all depends where you are. If you're in the UK, you are fine to start a business - no legal age. In the U.S, you gotta be 18+...

Originally posted by jt2377
2 months? sorry, dude... it ain't going to happened. some people didn't even make a dime for a year!

like someone else already said...be prepare to pay out of your own pocket for at least few month.

It varies on your marketing stragegy and how effective you are. Though, this is more unpredictable than many other things. When I started my first company, everything paid for itself in the first month of business. Earlier last year, I sold the business and was happy in the way that I managed things. This can be accomplished, but one has to work hard at it. In general, most companies still pay out of their pockets for months to come.

I really wish you guys would stop telling the kid 18+. To start the company by yourself, and to start a corporation, you have to be 18. But to start a sole proprietorship, and getting a ficticious name statement, you can be any age as long as your parents sign off for you on the form to get the home occupational license.

And yes, $200/month is possible soon if you market the right companies.

Oh right. As I've said, I am unsure of U.S laws...

S'ok! :) Just making sure he understands that under the right circumstances, he can get a occupational license and start a business easily.

Yeah thanks

I just wanted to see if there was any liabilities that I would have, I don't think that I will be incorporating.

Today I am going to see my boss who is a lawyer and ask him for advice.

Really, the only thing is that you cant really sign into contracts with anyone, which could be a pitfall unless you aren't worried about it. Of course, you could ask your boss to draw you up what's called a "Memorandum of Understanding", which is sort of like a contact, except it's just a "promise" so to speak. I'm not exactly sure of the details, since I'm not a lawyer (:-D)

But, good luck anyways! Hope you're successful!

Actually, I have that under control :p

I cosign the contract with a parent.

Also remember that a web hosting account is a contract between you and the client. In the US and Canada you cannot enter a legal contract until you are 18+. Just note that if you sell web hosting, and you screw up, your parents will be taking the blame.

Very true. So, if you aren't concerned about the legalities just yet, or you aren't making that much money, you don't need to enter a contract with your hosting clients. Just make the agree to the TOS and AUP of your service.

I think that starting a company when you're under 18 or still in school is a pretty big risk. You have other things to worry about like studying and tests. Sure the company brings in money, but it isn't your primary concern at that age. Maybe after college or school you'll want to consider starting the business, but you won't impress anyone as a professional if you haven't even gotten through high school or college. :P Hosting should be either for learning purposes only at your age (hobby) and it should be done after you do your homework or study for tests. Just my 2 cents. :)

What do you think a TOS and AUP are? They are contracts.

No, they are regulations that the user agrees to follow upon signing up for the service, if you aren't signing anything, it isn't a contract. Just an agreement.

Originally posted by samsonh
Ok heres what I am going to do:

I am 15 and am trying to start a hosting business

I have rented a dedicated server from servermatrix, so far they have been wonderful

I am getting an internet bank account from my parents.

Is there any legal issues with this?

My ultimate goal is to make exactly $200/month off of shared, reseller, and semidedicated servers (vps). This will pay for the server and any billing/support software that I purchase. Is posting offers and requests in forums going to get me to my goal in 2 months?

Any good tips anyone can give me?

Thanks

I am 12 and starting a GSP, everything is going fine and I will be up by Summer next year.

No one should bash anyone because of their age, I've had my photo taken by the Government in Britain for Business Link because I am the youngest person ever who has been to one of their workshops. They have a 'special' course for 16 year olds, imagine their surprise when a 12 year old turned up for a major course. ;)

I wish you all the luck for your business, the main thing to do is to research the industry ALOT. Also, Marcia Layton Turner's "Unofficial Guide to Starting a Small Business" is a really good book, you can buy it on Amazon for £11.

I wouldn't advise posting alot in forums, go for more mainstream advertising like in magazines, I am going to be advertising in alot of gaming magazines soon. Posting in forums alot can also be seen as spamming and you could get a bad business image.

Originally posted by R Echo
I wouldn't advise posting alot in forums, go for more mainstream advertising like in magazines, I am going to be advertising in alot of gaming magazines soon. Posting in forums alot can also be seen as spamming and you could get a bad business image.

That is definitely not true. I have been advertising in these forums for three days and I have made a total of $750. And my company is looking better and better from the portfolio work I am getting. And, people talk. So, the people I have designed for will refer me, and they will refer, and so on.

Just make sure you don't abuse your forum rights, and you'll be just fine.

Originally posted by VoxxitDesigns
That is definitely not true. I have been advertising in these forums for three days and I have made a total of $750. And my company is looking better and better from the portfolio work I am getting. And, people talk. So, the people I have designed for will refer me, and they will refer, and so on.

Just make sure you don't abuse your forum rights, and you'll be just fine.

In WHT? Yeah, but on most forums people do start calling you a spammer, just make sure that you only post like one thread, not a million. :emlaugh:

I don't post threads, I reply to them. But if I were to advertise, I would get banners, etc. through here. You reach a bigger audience.

Originally posted by VoxxitDesigns
No, they are regulations that the user agrees to follow upon signing up for the service, if you aren't signing anything, it isn't a contract. Just an agreement.

Contract:

An agreement between two or more parties, especially one that is written and enforceable by law.

The branch of law dealing with formal agreements between parties.

The courts of continuously upheld that verbal contracts are valid in a court of law as well as unsigned agreements made online (IE the "I Agree" button). And a business, when taking money for a good or service is contractually obligated to fullfill that good or service unless the customer fails to fullfill their end of the obligation.

Therefore, any time he violates the contractual agreement between the company and the customers, his parents become financially and legally liable for any actions as a result. Great position to put your parents in.

True, hmm.. well I guess he could take that risk if he so desired.

Like someone already stated in the US you have to be 18+ to incorporate but to have a business the only requirment is to have a government issued identification with a photograph. You can start a sole proprietorship and all you have to do is get a DBA certificate from your county recorder costs around $10 depending on were you live. To open a bank account and a merchant account you need parental conscent but they are secondary signers and you are the primary participating party in the agreement. You can have a TOS, AUP, Privacy policy because they are policies. promises you make to your clients and your clients make to you. They are not contracts unless you require them to agree. If you never ask them to press a button or put a checkmark on the terms and merely state that by braking the following (post links to TOS, AUP, etc.) you risk having your site deactivated. That way you are warning them of consiquences but never stating a mutual contract agreement. Also using a DBA your clients never have to know that your company actually belongs to your parents because if they inquire about it it actually belongs to you. They merely co-sign on merchant agreement and bank agreements. You can be completely transparent.

Also on your site you can say that the members of [your company] are knowledgeable in all new technologies and have loads of experiance. They are all educated in their proper fields of study.

This might seem like a lie but it isent as long as you know what you are doing. And your customers think you have a degree from a technical institute.

PErsonally, the only reason I'm able to have a hosting business, is because I'm homeschooled, and do *all* of my school on the computer.

I know that I can't legally enter into a contract for another year, but I have built many things into my tos to protect myself, and my clients for that matter.

Oh, well I guess that's an exception. :P

Sure wish I was homeschooled. Be way better than my school!

Anyway, obviosuly the basic rules for businesses are the same as the UK then. You gotta be 18 to Inc. over here as well.

Yeah, you could just put a TOS, AUP etc, but not make them legally binding. Can't see any problem with that...

Its better if you go to school and enjoy your teenage life.

He just got himself a server from servermatrix. hehe. that's $100 a month. forget teenage life; booze and hedonism. samson will be the next Jeffry Citron who bought and sold two firms with his own money, and now ceo of vonage.com at 33.

Originally posted by jt2377
2 months? sorry, dude... it ain't going to happened. some people didn't even make a dime for a year!

like someone else already said...be prepare to pay out of your own pocket for at least few month.

I can't quote this enough.

I haven't been able to break even for a year. I came into this industry thinking, "Hey, I want to learn this stuff, I should be able to break even in 3 months". I was wrong.

But, now 1 year and a few months in, I'm proud to say, I've broke even, and is finally making some money (although little).

I'm still a reseller, but I'm planning to co-lo in the next couple of months.

Issue 23 of x:

Getting a dedicated server was the wrong way to start. And I can tell you from experience. You should have started by buying an inexpensive reseller account someplace. It would have been < 50 a month and somebody else would be in charge of server in case in has problems during your english class.

How are you planning on handling server issues while at school?

Yeah, I don't get why *anyone* would start out with a dedicated server. It's just not worth paying for space and bandwidth you don't use.
I don't intend on getting dedicated. I'm going to go right to co-locating at a data center once I have enough cashflow coming in. Seems better then renting.. I don't like the concept of renting :\

Also, being homeschooled kinda sucks ;) Only reason I started this business was because I was bored to tears ;) Heh, It is cool being able to say I give 15+ hours a day of email-support and messanger support XD
I do take college classes though, so I don't have *unlimited* free time. home-work sucks (o)_(o)

I forgot to say, I still haven't broken even. Monthly, I'm still in the hole, and I've invested about $650 in the 6 months I've been in business. T_T I'm still on my parents computer... which is a real hinderence...

samsonh yeh I am same with you I want to do the same, I was going to buy a ded server but seeing this changes a alot and is even remaking me think

I just made $200 today. So, it's possible.

Originally posted by Slava Hosting
Also on your site you can say that the members of [your company] are knowledgeable in all new technologies and have loads of experiance. They are all educated in their proper fields of study.

This might seem like a lie but it isent as long as you know what you are doing. And your customers think you have a degree from a technical institute.

That sounds like intentional deception to me.

Yeah, wouldn't that be false advertising?

Originally posted by samsonh
I wanted to offer my web development, print design, and marketing clients a hosting option so I can handle all part of their websites.

As for being underage, yeah I will have to start a business under my parents. Thanks for pointing that out.

Are there tax issues with a parent being a sole proprietor?

Thanks
Samson I cannot speak for the Canadian tax system, but in the United States, there would be no difference in taxes as long as your parent pays you 100% of the income, and you file taxes as an employee of your parent. However, you parent would also have to file tax returns, adding some more paperwork - I assume there are similar regulations in Canada. Be sure to talk to an accountant before jumping into any business venture where you're unsure about the tax situations. Also, if you work for somebody who is a lawyer, you have a tremendous resource at your hand in terms of getting advice about a minor starting a business. You might even be able to get him to help you on writing a terms of service. Good luck with your venture, but be sure to realize that hosting is a 24/7 business - You'll need people to answer support tickets even while you're in school or sleeping. That can get expensive, even with outsourcing.

Originally posted by revise
That sounds like intentional deception to me.

It ise not intentional deception it is a statement that is interprative.

Also on your site you can say that the members of [your company] are knowledgeable in all new technologies and have loads of experiance. They are all educated in their proper fields of study.

members of [your company] are knowledgeable in all new technologies
-------------------------------------------------------------------------------
Read a magazine on some new server specs and software out there
============================================
and have loads of experiance
-------------------------------------------------------------------------------
it all depends on how long a "load" is. Some people might say that if you read about something for 5 hours thats a load. While some people will say you need to research something for months.
============================================
They are all educated in their proper fields of study
-------------------------------------------------------------------------------
Educated doesent necessarily mean a degree. If I explain something to you I am educating you. So if you are a sales rep and you read an article about curtesy in the marketing business you are educated and informed.


All of what I said in that paragraph is true for the above reasons. I would only recommend this for new hosts. Advertising that we are new and unexperianced wont get you many clients. Even if your prices are as low as any one elses in the industry.

If your prose makes "customers think you have a degree from a technical institute" when in fact you don't, you are deciving them. That is, inducing an erroneous belief through careful manipulation of the words. Whatever verbiage you use to represent your company is your prerogative. However, it's your customers who ultimately will evaluate whether you're being candid or deceptive.

Every company has to start somewhere. It would be stupid to advertise that your company has no experience or track record. As such a company, you should rather highlight positive features of your business and its staff (innovative? motivated? etc.)

samrt people don't care if their business is motivated. They want proof that you are a good company. For example we have been in business since 1993! or our licensed technical support staff is available to answer your questions 24x7.
But most people do not have technical support staff with degrees or have a business that has been open a decade so using common words like loads of experiance can be beneficial to your company.

I'm not saying go lie and say you have 7 years of business when you had 1 but if you use a vague term it will be better for the company.

If you are a highly morall person and see this as false advertisement than go ahead, but when I started I used this routine and it got me a ton of clients and affiliates.

I guarantee that motivated and innovative won't hert your business but it won't help it all that much either.

just my 2 cents.

Sorry if there was any confusion regarding my post - I wasn't referring to you or your business specifically. Rather, I was speaking in general towards starting from scratch. Most businesses will have some collective experience in the industry beforehand - this is the most valuable asset to bring to the table. Lacking that, you have to demonstrate other attributes like innovation and motivation (I didn't mean, literally write, "we are innovative and enthusiastic"). People want results, and a innovative service with a dedicated staff can most definately produce.

At any rate, my intention was just provide another perspective. I've always built my business relationships upon candor and service, and it's served me well.

To each his (or her) own.

Originally posted by Slava Hosting
samrt people don't care if their business is motivated. They want proof that you are a good company. For example we have been in business since 1993! or our licensed technical support staff is available to answer your questions 24x7.
But most people do not have technical support staff with degrees or have a business that has been open a decade so using common words like loads of experiance can be beneficial to your company.

I'm not saying go lie and say you have 7 years of business when you had 1 but if you use a vague term it will be better for the company.

If you are a highly morall person and see this as false advertisement than go ahead, but when I started I used this routine and it got me a ton of clients and affiliates.

I guarantee that motivated and innovative won't hert your business but it won't help it all that much either.

just my 2 cents.

I know when I said:

For example we have been in business since 1993! or our licensed technical support staff is available to answer your questions 24x7.

I was referring to a random advertising slogan and not referring to my host.

lol

So, color discriptions in your favor by omitting the lack of experience, and capitallizing on your selling point?
Good Plan ;)

So its a white lie. At least part of it is true.

My point of my last post in this topic was that it seemed like something common sense should have brought to light.

Don't lie, but don't tell the full truth.

Microsoft for an example, They say Windows is a great OS, true, but they don't say that it's full of bugs even after 10+ years of business. They make people think it's the only option availible. They don't say that, but they're not telling people that Linux is perfectly acceptable too.

exactly what axe said.

P.S. Linux is free. lol

Originally posted by axe9
My point of my last post in this topic was that it seemed like something common sense should have brought to light.

Don't lie, but don't tell the full truth.

Microsoft for an example, They say Windows is a great OS, true, but they don't say that it's full of bugs even after 10+ years of business. They make people think it's the only option availible. They don't say that, but they're not telling people that Linux is perfectly acceptable too.

it's hard to get every piece of hardware and software to work under Windows and without any bugs.

for example...Do Mac user have to worry about drivers when Mac is based on one platform with limited hardware suppliers vs Windows have to support both x86 platform (AMD and Intel, i don't care what people said but starting with Athlon, AMD and Intel cpu are not the same anymore both still support x86 but they do it in very different way, just try to support two and more different type of cpu) with million different hardware vendors and some of them write crappy drivers to begin with and users blame Microsoft and not hardware vendors. you get my point.

how much secure can Windows be if software vendors own bug cause the problem and software vendors won't say it's their own fault for not following Microsoft Win API or best pratice.

basically Microsoft get blame for a lot of thing that i do not believe its their fault but you know what people use Microsoft Windows and when they see that blue screen of death and bunch binary error code puke out by Windows. they think it's windows fault and not hardware or software vendors.

Microsoft also have the best backward competilable platform. you can run Win95 apps with WinXP and this both have its blessing and curse. Microsoft's own software also have blessing and curse like their office software. they give you power with Macro and VBA script but at the same time open itself up for easy script kiddies attack. so how do you balance between the two? a lot of time OpenSource have great software but at the expense of poor GUI (interface) or great interface but limited function (security reason).

it's not entirely Microsoft's fault for a lot of blue screen of death but people just going to blame on Microsoft anyway. it's kinda become of norm that Microsoft's software = buggy, unreliable and unsecure but some of Microsoft's technology and software are very good but you'll never see any praise for that.

Well, If you can provide what you offer (24x 7 Support for example) I think there is no problem.

wow... ever have one of those nights where you lay in bed staring at the ceiling, trying to sleep for two hours, then give up and decide to go back to working on your website... yeah, one of those...

Anyhow, lets not derail the topic by opening up the MAC vs Win vs Linux debate XD

Personally, the only thing I boast about on my site is fast response times. I say I will get to any after-hours email within 9 hours. This allows for sleep of course.and I say I'll get to any email durring business horus within the hour. I say this, because my biggest pet-peeve is when you email someone, and it takes a day for them to reply..... or if they don't know, they just forget about it and let it hang... I hate people who don't check their email more then once a week... and my mom yells at me for checking my email accounts [3] at least once/hour...........rambling rambling...

woa this topic changed its path so many times that when I looked at the topic name, underage starting web host business I though their was an error in the forum.

I think we all answered the question about starting a business in the US while being a minor. Lets not shift to other topics. If someone wants to debate linux/windows/mac it diserves its own thread.

im in the UK and i had my company running for 8 months now. Im only 15 and already own 4 of my own servers in rb2 mer. I also got a server in the US for us hosting customers. Im in the middle of switching my name so its getting a lil confusing but its all good. The main thing is to have some people online while your at school to answer any support questions. I dont think there is any elgal stuff ya need to do till you been in business for a while. If your unsure contact ur mum or dads lawyer.

Originally posted by JamieHF
I dont think there is any elgal stuff ya need to do till you been in business for a while. If your unsure contact ur mum or dads lawyer.

uh? am i missing something or is U.K. law is different? when you started a business and taking people's money. you already doing legal stuff...unless you're scaming your customers...otherwise as soon as you take your customers money. both you and your customers are deep in "legal" stuff of the business side.

you're a minior so i don't know if U.K. allow minor to get sued or not but it's a legal contract/service agreement between you and your customers.

Yeah, UK laws are different. I think he means legal stuff like tax forms etc. He won't have to fill in tax coz he's only 15 and in the UK, we don't pay tax till we're 16 and out of full-time education (so if you go to college or something, you still dont pay tax).

Also, he is probly a Sole Proprietorship, for which, there is no age limit and you can wake up in the morning and just start trading, there and then. You don't HAVE to get business names registered or anything, but they advise you to. The same as they advise you to not start a business till you're 16 coz you might not know what you're on about - but they are just advisions.

Also, he cannot incorporate until he's 18 - same rule as the U.S there. But he'd be fine for starting a Sole Proprietorship. Except, he still can't enter into legally binding contracts, but can sign contracts by means of agreement, but they won't mean anything in court.

Think I filled everything in there...

Originally posted by will7
He won't have to fill in tax coz he's only 15 and in the UK, we don't pay tax till we're 16 and out of full-time education (so if you go to college or something, you still dont pay tax).

That seems rather odd. Can you point me to a good link to read up on that?

http://www.debatabase.org/details.asp?topicID=77

Under the pros column, second box down, "At 16 you can get a job and pay taxes"

That should mean that you don't pay taxes until you're 16!

Originally posted by will7

Also, he cannot incorporate until he's 18 - same rule as the U.S there. But he'd be fine for starting a Sole Proprietorship. Except, he still can't enter into legally binding contracts, but can sign contracts by means of agreement, but they won't mean anything in court.

Think I filled everything in there...

so...that mean his customers can't sue him if thing go wrong? humm...isn't that kind of disadvantage to "adult" business who can get sued if service agreement is breach or something.

No, it means his customers can always sue. Whether they win or not is a different story. If there is not a legally binding contact in place, it just means the customer has a better chance of winning because of there is nothing to protect the hosting company.

It doesn't mean they can't sue him. In actual fact, they have a better chance of winning because he has no legal proof of a contract between them and they are going by word.

Originally posted by will7
http://www.debatabase.org/details.asp?topicID=77

Under the pros column, second box down, "At 16 you can get a job and pay taxes"

That should mean that you don't pay taxes until you're 16!

Flawed logic: it doesn't necessarily follow that they DON'T have pay taxes if they're under 16. I don't know my UK tax law, but I find it highly unlikely that under-16's wouldn't have to pay [income] tax if they were in fact generating income. That just illustrates why it's important to research legalities BEFORE starting a business and from an AUTHORITATIVE source.

They do not have to pay income tax if they work for someone. However there are other taxes if you run your own business. (Self-employment taxes). This is how I interpreted this. I am not sure and have no experiance with British law, however this is what I think of the issue.

Indeed revise, believe me, I did find this information from a government site and wish I had kept the link. I'll try and get some more research for you but my mom & dad both say that you don't until you're 16, and so does my brother's friend.

I would go and see a lawyer, but am afraid of looking like an idiot and him not taking me seriously. Maybe I should...

Ok I cancelled the order because of recommendations here (I realized it was extremely stupid of me to order one)

I am incorporating, 99,999 shares for me, 1 share for my mom :p

I have decided to go with hostingzoom's reseller packages since they offer to support my customers and offer WHM Autopilot.

It will be at least 6 months until all my startup tasks are done (learn basic accounting, incorporate, get business acount with bank, finish my site, create corporate id package for myself, write business plan, print all stationary)

Thanks for all the helpful advice

Samson

anytime, thats why we are all here. And if you have any more questions just post here, or PM me. I'll be glad to help you out.

Originally posted by will7
Yeah, UK laws are different. I think he means legal stuff like tax forms etc. He won't have to fill in tax coz he's only 15 and in the UK, we don't pay tax till we're 16 and out of full-time education (so if you go to college or something, you still dont pay tax).

Also, he is probly a Sole Proprietorship, for which, there is no age limit and you can wake up in the morning and just start trading, there and then. You don't HAVE to get business names registered or anything, but they advise you to. The same as they advise you to not start a business till you're 16 coz you might not know what you're on about - but they are just advisions.

Also, he cannot incorporate until he's 18 - same rule as the U.S there. But he'd be fine for starting a Sole Proprietorship. Except, he still can't enter into legally binding contracts, but can sign contracts by means of agreement, but they won't mean anything in court.

Think I filled everything in there...

1) You do pay tax on earnings at ages under 16, what you don't pay is P.A.Y.E or N.I.. Don't want to declare it? - OK - Inland revenue can go back 7 years, personal and corporation tax and a few others as well including capital gains tax.

2) A sole proprietor does not need to register a name but he/she will be "trading as" T/A which carries legal implications as well, not being incorporated means that full liability for any debts, law suits, tax and insurance issues lies personally with the proprietor and being under 16 does not limit that liability. There is other major issues involved such as banks will not offer a business account ( normally) to anyone under 18 and exceptionally between 16 and 18, signing of contracts is not legal in the UK until you are 18 ( 16 in Scotland) and parents or guardians will be ultimately responsible.

3) You CAN be a director of a Limited company under 18 although it is discouraged it is perfectly legal 9however the points above will hold you back). Your point of contracts being legal is unfounded, if a minor enters into a contract for say hosting, the parents can be held responsible as they knew ( or should know what he was doing) he/she has to produce paperwork, has to pay bills and has to lodge funds somewhere. Legal age of responsibility is 10. Whether any case would be successful in court would be for the legal system to decide not you.

4) Lastly and most importantly under 16/18's will not be able to obtain prefessional idemnity insurance of any kind - one mistake and you could be paying for the rest of your natural life.

OK, So I'm wrong about the tax thing then. I'm sure I found it somewhere on some government sole proprietor site, I'll have another look around.

And you CAN sign contracts under 18, but they are not legal. They are merely an agreement, so, I spose they should be called "agreements" not "contracts".

And I knew about all the rest. Thanks for clearing things up Goldwing.

And you CAN sign contracts under 18, but they are not legal. They are merely an agreement, so, I spose they should be called "agreements" not "contracts".

OK pedantic point, 16 in Scotland, the legal status of the contract would be determined by the courts, never assume they cant, however overall the parents could be held responsible financially

I am an old git now and believe me under 18's go out and enjoy yourself, hell under 25's go out and forget business your only young once.

Just for the record I started my first business when I was 13, got nabbed by the tax man when I was 17 ( cost me a fortune) left things alone til I was 25 (1982) and been in business since :)

The following is an extract from companies house FAQ, while directors can be any age all of the above restrictions would become a hinderance.


=======================
Is there a minimum age under which an individual is barred from acting as a company director?

The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director. There will be exceptions to this general rule and we are open to persuasion. If an applicant insists we would have to accept an underage appointment but applicants should bear in mind that such an appointment may damage the credibility of their company for people who examine its public record.

First of all, who would seek legal advice in a forum? Don't. Second - You don't pay taxes until your parents report you as being independent. This is my .02.

Ah, I see. OK, I'm getting mixed opinions...think it's time I arranged an appointment with an accountant, lol.

Originally posted by Deval
First of all, who would seek legal advice in a forum? Don't. Second - You don't pay taxes until your parents report you as being independent. This is my .02.

Are you quoting UK tax laws, US tax laws or Outer Mongolia tax laws ??
You are right though direction from this forum not information but generalised statements like " - You don't pay taxes until your parents report you as being independent. " is just simply wrong!!!
If that was the case every crook and conman in the world would have the business registered in the son/daughters/neice/nephew/nexdoor kids name.

If in doubt seek professional advice as tax laws in any country are a minefield.

If in doubt seek professional advice as tax laws in any country are a minefield.

And those mines go off with a BIG explosion!

So if that's wrong... tell me how I'm paying taxes if none of my money is coming out of my pockets to pay anything for the government. I had a lawyer tell me that. I'm quoting what she said (even though the quotes did not appear around the words).

Originally posted by Deval
So if that's wrong... tell me how I'm paying taxes if none of my money is coming out of my pockets to pay anything for the government. I had a lawyer tell me that. I'm quoting what she said (even though the quotes did not appear around the words).

Again!! what country, where and under what circumstances. The generalised statement you made cannot possibly fit all circumstances.

In the UK if a company makes profit then it pays tax, not quite as simple as that but thats why accountants get paid as much as they do. If individuals take money then it is income or capital gains tax

Incidently I would never consult a lawyer about tax returns, lawyers are the biggest crooks going. always consult an accountant for financial matters. Your pockets may become a lot emptier soon.

Deval, et al - this is not a place to ask for legal advice; nor does asserting your own understanding of tax laws make your version valid.

Let me repeat: this is not the place to seek legal and tax advice, and given the divergence of tax laws for every locality, city, state, region, country, etc, no one but a trained (and preferably local) lawyer and accountant can help you.

Sorry for the misunderstanding. But I live in the United States, and I was told be it truth or false, that in general, you don't pay taxes until your parents declare you independent. Don't have to take it seriously though.

Originally posted by Deval
Sorry for the misunderstanding. But I live in the United States, and I was told be it truth or false, that in general, you don't pay taxes until your parents declare you independent. Don't have to take it seriously though.

Minors in the US do have to pay taxes (or their parents do) in certain circumstances. It depends on the amount of money they make. As everyone else said, consult an accountant for factual information.

http://www.turbotax.com/articles/HowtoPayTaxesonYourChildrensIncome.html

Originally posted by Deval
Sorry for the misunderstanding. But I live in the United States, and I was told be it truth or false, that in general, you don't pay taxes until your parents declare you independent. Don't have to take it seriously though.

You're not doing anyone a favor by continuing to post misinformation to a public forum. Taxes are inherently specific to each person, so posting "general" information that you've "heard" is a bad idea.

I wonder how many people are going to read this and decide they don't need to pay their taxes ;).

Good luck in your venture, there are really no legal implications as long as you have your parents co-sign on things.

Originally posted by talkwebhosts
Good luck in your venture, there are really no legal implications as long as you have your parents co-sign on things.

Of course there are legal implications.

Talk to an accountant!

I agree rondo.

Originally posted by Deval
Sorry for the misunderstanding. But I live in the United States, and I was told be it truth or false, that in general, you don't pay taxes until your parents declare you independent. Don't have to take it seriously though.

As an individual you may not need to pay tax, but your company will if it makes a profit.

Like many have said above me, find a lawyer or an accountant to help you.

There are legal issues but they depend on where you are in the world

Originally posted by samsonh
Ok heres what I am going to do:

I am 15 and am trying to start a hosting business

I have rented a dedicated server from servermatrix, so far they have been wonderful

I am getting an internet bank account from my parents.

Is there any legal issues with this?

My ultimate goal is to make exactly $200/month off of shared, reseller, and semidedicated servers (vps). This will pay for the server and any billing/support software that I purchase. Is posting offers and requests in forums going to get me to my goal in 2 months?

Any good tips anyone can give me?

Thanks


Sure, I will give you some good tips: Don't do it. If you are taking people's money you owe them more than what you can possibly give them. What if somebody needs help at 10 a.m. and you are in school?
Also the fact that you are asking all kinds of questions here that you already should have researched before you even thought of starting your business shows you have not done your home work and that you don't even know you have not done your homework. You lack the experience and maturity to run a hosting business. Sorry.

If his site clearly states that he only offers live support during x-y hours, e.g. after he gets home from school until.. 10? Then there's no liability.

Originally posted by will7
Yeah, UK laws are different. I think he means legal stuff like tax forms etc. He won't have to fill in tax coz he's only 15 and in the UK, we don't pay tax till we're 16 and out of full-time education (so if you go to college or something, you still dont pay tax).

Also, he is probly a Sole Proprietorship, for which, there is no age limit and you can wake up in the morning and just start trading, there and then. You don't HAVE to get business names registered or anything, but they advise you to. The same as they advise you to not start a business till you're 16 coz you might not know what you're on about - but they are just advisions.

Also, he cannot incorporate until he's 18 - same rule as the U.S there. But he'd be fine for starting a Sole Proprietorship. Except, he still can't enter into legally binding contracts, but can sign contracts by means of agreement, but they won't mean anything in court.

Think I filled everything in there...


This is like the blind leading the blind. In the US it does not matter how old a person is when it comes to self-employment income. If this 15 year old genius wannabe starts a hosting business and has paying customers he will be liable for self-employment taxes. No way around that.
If any of you care about getting the correct answers to your questions then contact a professional and if you are too cheap to pay for advice then contact your local SBA for help, but please don't subject the innocent public to your incompetence in running your own business.

SydneyJen, to me, you seem to be a very arrogant person. You are going around flaming people, telling them that they cannot run a business, but don't tell them how to improve their skills.

I am thinking about employment tax laws there, they don't pay till they're 16, but when you earn your own income (self-employed), then they have to. As I said, UK LAWS!

Oh, and what is it that gives you the right to go around saying he's too young to run a business (when if he just said, support during x to y hours, it'd be fine)? Do you run your own business? Is it a multi-billion dollar company?

I'm not trying to flame you, but I just want to know. You could say it in a much nicer and improved way:

"At this time, I do not think you are suitable for running a business. But improving on this, this and this and doing this might help etc"

Originally posted by will7
SydneyJen, to me, you seem to be a very arrogant person. You are going around flaming people, telling them that they cannot run a business, but don't tell them how to improve their skills.

I am thinking about employment tax laws there, they don't pay till they're 16, but when you earn your own income (self-employed), then they have to. As I said, UK LAWS!

Oh, and what is it that gives you the right to go around saying he's too young to run a business (when if he just said, support during x to y hours, it'd be fine)? Do you run your own business? Is it a multi-billion dollar company?

I'm not trying to flame you, but I just want to know. You could say it in a much nicer and improved way:

"At this time, I do not think you are suitable for running a business. But improving on this, this and this and doing this might help etc"

Tax and legal issues have very real and serious implications; it is not appropriate for anyone on this forum to offer up suggestions to "improve" in these areas. The only place to get tax and legal advise are official and authoritative sources, namely the government and those persons licensed to practice, such as CPAs and lawyers. The suggestion for improvement IS to go get proper tax and legal advise. There's no alternative.

What gave SydneyJen the right to criticize is that this individual has not shown good common sense or business acumen. You don't have to have a complete understanding of accounting, economics, IT, law, etc to run a business, but you do need to know when to get help in these areas. Actually, it has nothing to do with age at all, mostly maturity and good sense. Asking for tax advise and posting misinformation does not demostrate either.

I'm all for young entrepreneurship, but that doesn't mean that rules somehow don't apply. You still have to do research, plan the business, pay taxes, deal with legal issues, and more.

Yes, I agree. My point was, what gives him the right to go around blatently insulting others and telling them they cannot run a business (he didn't say for what reason). For example:

" 15 year old genius wannabe "

" You lack the experience and maturity to run a hosting business. " (He should have gone into detail on the reasons why, and, like I said, explained how to improve).

" if you are too cheap to pay for advice "

" your incompetence in running your own business "

There's a few examples, but I don't want to get into a flame war, so, I'll be quiet now!

Originally posted by will7
Yes, I agree. My point was, what gives him the right to go around blatently insulting others and telling them they cannot run a business (he didn't say for what reason). For example:

" 15 year old genius wannabe "

" You lack the experience and maturity to run a hosting business. " (He should have gone into detail on the reasons why, and, like I said, explained how to improve).

" if you are too cheap to pay for advice "

" your incompetence in running your own business "

There's a few examples, but I don't want to get into a flame war, so, I'll be quiet now!

I am well known for my tact and diplomacy :rolleyes:

So I wil kick in here and say i agree with the statements.

15 is WAY too young to be running a professional business immaterial of how mature that person is, lack of legal accountability the the major concern along with time constraints on education.

No 15 year old can match experience of age, that doesn't mean they do not have the right ideas or indeed could make it work, the problem is that most 15 year old business owners will give up ( sad fact of life) leaving a trail of trouble behind them. See how often you see a "business" for sale here that consists of a reseller account, a domain name and a template!! cause he has went back to school.


I see often on this forum, young "business people" trying to do things on the cheap or for free, that in itself is a level of incompetence in that there is not sufficient funding to ensure stability, I wonder how many 15 year old have business that are properly insured angainst public liability and professional liability ( 0) would be a good guess. So there is another point to query incompetence.
If you called out a plumber and he flooded your house, then informed you he was not insured would the plumber be incompetent?

Sorry but you will never convince me that a minor running a hosting business is good for the customers.

Some of you really need to talk to a lawyer, and I expect that you shoud also see one if you know one that is a family friend, they can usually refer you to someone and most lawyers would have trouble trying to charge a 15 year old at least at first, I will see if i can talk to you via instant message soon

this is your playing and learning age, so i will recommend you not to open business at this age.

Just a suggestion.

why not though? it might even be considered play for him, trying to bring in customers in

Originally posted by will7
SydneyJen, to me, you seem to be a very arrogant person. You are going around flaming people, telling them that they cannot run a business, but don't tell them how to improve their skills.

>>>>>>>>>>I am not flaming him; and there is not enough space on this forum to tell him how to improve his skills.



Oh, and what is it that gives you the right to go around saying he's too young to run a business (when if he just said, support during x to y hours, it'd be fine)? Do you run your own business? Is it a multi-billion dollar company?


>>>>>What gives me the right to say he is too young to run his own business? It is the truth that is what gives me the right. Yes, I run my own business and no it is not a multi-billion dollar company, does that matter? If I did run a multi-million dollar company would that then give me the right to say he is too young to run his own business? BTW - I do not think he is too young to run his own business; I think he is too young to run a hosting business as he has demonstrated by the nature of the questions he has asked here.


I'm not trying to flame you, but I just want to know. You could say it in a much nicer and improved way:


>>>>>If you're looking for politenss rather than advice, then seek advice from a Christian forum.


"At this time, I do not think you are suitable for running a business. But improving on this, this and this and doing this might help etc"

Originally posted by mattwade
Yes, there are many legal issues dealing with this. First and foremost, you are not of a legal age to own a business. If you want to do this legally, you need to have your parents legally register the business and then pay you as an employee.

I didnt read the whole thread but that statement (where i live at least, ontario canada) is false there is no age to start a business (solely under your name).

- Eddy

Originally posted by sirgamesalot
I didnt read the whole thread but that statement (where i live at least, ontario canada) is false there is no age to start a business (solely under your name).

- Eddy

I agree that things vary from country to country and (within the US) state to state. I apologize for the generalization.

Here is an interesting artlcle (however US centric):

http://www.entrepreneur.com/article/0,4621,302956,00.html

I started when I was 15 in Aus, now we are turning a few mil a yr and in over 200 countries, don't listen to all this 18+ nonsense... if you want to run a business then get out there and get the legal advice you need and make your business happen.

It won't happen if your talking about it, go out there and do it..

Mate, wait until you are 16, and then go for it ;)

Originally posted by andrew_echo
I started when I was 15 in Aus, now we are turning a few mil a yr and in over 200 countries,

i highly doubt your statement.

Me two. Unless he's saying he started when he was 15 and he's now like 20 or something...in 5 years it might be possible.

Richard Branson started Virgin with a magazine when he was 15-16 I believe...

Of course, you have to be a talented individual to pull it off, but it's possible...

Originally posted by Laws
Richard Branson started Virgin with a magazine when he was 15-16 I believe...

Of course, you have to be a talented individual to pull it off, but it's possible...

it's very rare and if he did what he said espeically in IT. his name will be all over the place like Bill Gates did when he started Microsoft.

media love teen "Titian" who start young and make million.

i havn't heard or read anything about a 15yrs old webhost turn couple mil per year and all over 200 countries. unless he can prove it. i really doubt his statement.

Originally posted by Laws
Richard Branson started Virgin with a magazine when he was 15-16 I believe...

Of course, you have to be a talented individual to pull it off, but it's possible...





Starting magazine at 15 is not the same as a hosting business where you take somebody's money and provide them a service.
I think its admirable for a 15 year old to start a business, BUT the right kind of business that s/he has the knowledge and maturity as well as time to devote to it.

I have goten legal and accounting advice, I will be offering 24/7 support on my new treo 600 (very nice phone with fax), and will hope to serve my customers to the best of my ability. I will also be getting liability insurance.

Incorporate your business, or, if in the Unites States, stay away from incorporation and do a limited liability company instead. The costs are lower and you are not as restricted in terms of how you are able to run your company.

Also, you cannot be the sole owner. Ask a parent to own a part of the company, and draw up an agreement that automatically transfers all ownership to you on your 18th birthday.

If your parents are behind you, you should not have a problem and can simply use 2CO for credit card payments, to make things simple. Even simpler is Paypal. I'm thinking that a merchant account may make your parents think twice about it, and will have the company in a three-year contract for merchant services, whether you succeed or fail. This will have your parents credit on the line.

Bottom line - Do an LLC, own a part of it with your parents owning the rest. I'm not sure about the laws of your state with regard to LLC's, but you can probably call yourself whatever you want (CEO, President, etc.), and, if not, make a parent the CEO and call yourself something else. It really doesn't matter much unless it's an ego thing we're talking about, so long as your parents agree to let you run it and to turn it over to you (if you want) when you turn 18.

Good luck, and if anyone on this board tells you that you are too young, take that into consideration, but never let it stop you. There are more than a few minors who have started their own companies in the past and been successful. If you have what it takes, age is only a small issue.

Im not sure if this was said yet, but in Canada you do not need to register for your GST/PST# until you are making 30,000$ a year in sales.

i havn't heard or read anything about a 15yrs old webhost turn couple mil per year and all over 200 countries. unless he can prove it. i really doubt his statement.

Personally, I think andrew_echo turns over $54000 per year, which is pretty good IMHO.

http://www.webhostingtalk.com/showthread.php?s=&postid=2802678#post2802678

Founded in 2002 apparently, and registered as a proprietary company in feb 2004.

http://www.abr.business.gov.au/ - enter their ABN - 96 108 149 819

Well, I am 15. I run a few businesses within the Internet and they are running 100%. No customers are complaining and i have made it 100% legal.

Good on yah man. Start a webhosting business :)

Originally posted by gbjbaanb
Personally, I think andrew_echo turns over $54000 per year, which is pretty good IMHO.

http://www.webhostingtalk.com/showthread.php?s=&postid=2802678#post2802678

Founded in 2002 apparently, and registered as a proprietary company in feb 2004.

http://www.abr.business.gov.au/ - enter their ABN - 96 108 149 819
Slight difference to his claims though:-
........now we are turning a few mil a yr.......

Slight difference to his claims though:-

He doesnt mention what currency - could be Italian Lira :stickout:

Samsonh
I have goten legal and accounting advice, I will be offering 24/7 support on my new treo 600 (very nice phone with fax), and will hope to serve my customers to the best of my ability. I will also be getting liability insurance.

OK when do you go to school? when do you sleep - if you do any of these then you are not offering true 24/7 support - access maybe but support no.

I would be interested to know what country you operate in and how you get liability insurance if you are a minor.

He could be outsourcing the support and getting 24x7 that way...

Originally posted by gbjbaanb
Personally, I think andrew_echo turns over $54000 per year, which is pretty good IMHO.

http://www.webhostingtalk.com/showthread.php?s=&postid=2802678#post2802678

Founded in 2002 apparently, and registered as a proprietary company in feb 2004.

http://www.abr.business.gov.au/ - enter their ABN - 96 108 149 819

he stated few mil...if he is turning over few mils a year...why does he want to sell? the ABN mean the company register with AU govrt. nothing more on how much he really make.

unless there are more solid thing support what he said...i doubt "few mils per year" statement.

I am curious to know his hosting website.. :eek:
Maybe we can prove anything!

I will run the company but will not the the only person owning it. I have screwed the 24/7 idea and am outsourcing support.

Originally posted by S-Comm
I am curious to know his hosting website.. :eek:
Maybe we can prove anything!

http://echocorporate.com/corporate/index.php

Sounds professional. but can't give any prediction of what he's making in fact. I just presume it's hard to achieve a few mil per year since it's only a few years old company.

Originally posted by S-Comm
Sounds professional. but can't give any prediction of what he's making in fact. I just presume it's hard to achieve a few mil per year since it's only a few years old company.

that's why i doubt it. he can't turn a few mils in just a few years. webhosting is so crowed...i don't think he make that much of money and want to sell his business.

It's possible to make a few mil a year...even a few mil per month. But, his company is new and he wants to sell...so surely he can't be making that much!

Originally posted by will7
He could be outsourcing the support and getting 24x7 that way...

Ah!! so a Treo 600 is a 24/7 outsourcing company - now I get it :stickout:

If a young host does do it properly and can operate legally and properly support their customers with sufficient financial backup then good luck to them.

However many end up screwing their customers ( not intentionally) because they do not have the experience or the money to support the business and for many priorities change faster than their hormones.

Originally posted by Goldwing
Ah!! so a Treo 600 is a 24/7 outsourcing company - now I get it :stickout:

If a young host does do it properly and can operate legally and properly support their customers with sufficient financial backup then good luck to them.

However many end up screwing their customers ( not intentionally) because they do not have the experience or the money to support the business and for many priorities change faster than their hormones.
Most simply change their mind when they find out is actually REAl and HARD work. ;)

Goldwing, I never said that would class as 24x7 support - but he could be outsourcing and telling his clients that he offers 24x7.

I agree about the child comment. MOST can't, but every now and then, one comes along who can. They're the kind of people we need to run a hosting business, not a kid who wants to make a quick buck. Agree completely with that!

Originally posted by will7
Goldwing, I never said that would class as 24x7 support - but he could be outsourcing and telling his clients that he offers 24x7.

I agree about the child comment. MOST can't, but every now and then, one comes along who can. They're the kind of people we need to run a hosting business, not a kid who wants to make a quick buck. Agree completely with that!

Will7

My "tongue in cheek" comment was in response your comment about "maybe" outsourcing when his position at the time was to provide 24/7 on his Treo 600 - that to me gave off a level of immaturity.

You are correct though, every once in a while a true young entreprenuer will come along however the laws of most countries make this difficult until they reach an attainable age - there is usually a good reason for that.

Sadly the hosting industry is full of "make quick buck" people ( not all of them kids) it is so easy to buy a reseller account, set up a paypal account and call yourself a host - some will graduate to dedicated servers and then come to forums and ask questions like "what is ssh"

I certainly would not like to me in the market most hosts are in this forum competing in that market would drive me nuts ;)

I am partnered with person down in texas, whom I knew when he attended my school. He does all the financial and advertising work, and has the licensce.
I fix things, buy new servers, adjust olds ones, monitor customer usage, and do all tech work, and find good prices (with reliability) on new servers.
Within 1.5 months of starting (it is 7 weeks since starting), we have over 26 game server customers, and 23 web hosting customers. We colo 2 dual xeons and one p4 2.8ghz, making a net profit of ~400$ per month. We just broke even, and now plan to expand to the North-East.
Brand the game servers, and have 10% referral benefits, and people advertise your servers for substantially less than adsense or words.