Which are you using, or prefer to use when starting a hosting company. Please explain why. Is there any hosting company that is a corperation?

LLC because of the limited liability.
Corporations are taxed higher than LLCs. Don't quote me on that.
Here's an article: http://www.incorporatetime.com/FaqCorp.htm

Yes, stockholders are subject to double taxation, or paying taxes twice on corporate profits. Corporation pays taxes on its profits. Then when the profits are distributed to stock holders, stockholders pay income tax on those earnings. Sole proprietors and partners also must pay taxes on the profits they earn. However, proprietorships and partnerships do not pay a seperate profit tax.

I knew that Civics and Economics class would come in handy somewhere. :)

Go it alone, and do it LTD (LLC).
I'm not a big fan of partnerships...

Go it alone, and do it LTD (LLC).
I'm not a big fan of partnerships...
Yeah, although partnerships have their advantages, they also have their disadvantages too. I nearly went into a partnership in the early days of httpme, but pulled out at the last minute. It just wasn't for me, and I'm not the greatest team player out there. :o

That is a very difficult question. There isn't a legal entity that is "better" than any other. Instead you need to determine your needs and find one that suits it. A quick break down of applicable options: Sole Proprietership, Partnership, Limited Liability Partnership, Limited Liability Corporation, Corporation (Sub Chapter S), Corporation (Sub Chapter C). There are many others but none that would apply to a for profit web host company.

I won't go into the pro/cons here (there are some fantastic resources available including the IRS. Try googling. I will say that areas to look at are taxation, number of shareholders, public vs. private, annual costs, etc.)

If you have any specific questions please PM me, I would be happy to help!

LLC because of the limited liability.
Corporations are taxed higher than LLCs. Don't quote me on that.
Here's an article: http://www.incorporatetime.com/FaqCorp.htm
I was advised on my circumstances to get an 'S' chapter corporation. It was felt it offered me better protection than LLC. I haven't been double-taxed. It depends state to state so get accountants or attorneys advice.

Greetings:

First, please treat all answers here, unless the responder is a lawyer or accountant, as "I'm not a lawyer or accountant...." Meaning, in the end, you really should see a lawyer and an accountant (both due to legal as well as tax implications).

That stated, on a pure opinion based on experience statement, I would recommend LLC or Corporation. Whether you go "C" or "S" depends on a number of factors (# of shareholders, whether or not you will pay dividends, profit / loss of the company at the time of incorporation, 1st year, 2nd year, 3rd year, etc.).

Thank you.

When it comes to business debt, sole proprietorship and partnerships increase unlimited personal liability. For better legal business structure, I would say you should prefer for LLC.

Normally corp sub chapter S require more paperwork than an LLC. A chapter S can be later changed to a chapter C.

Also remember that an LLC can elect to be taxed as a C corporation. Personally, I would start with an LLC taxed normally. Especially if you think it will take more than a year to become profitable. Those working a regular job (and earning an income) and starting a business on the side are better off with an LLC. If the LLC doesn't make money, you can write it off your taxes (and get a refund from the taxes you paid in through your other job). Once the LLC becomes profitable, you may want to elect to be taxed as a corporation if you want to keep the profits in the corporation and grow the company (corporation pay less taxes on profit than individuals).

Now, something to think about. If you pay child support, then your income is based on ALL your income. This includes the profit of your LLC. That could get pretty expensive. In those cases, you may be better off forming a corporation and just paying yourself a normal salary. This was a point that an attorney brought up to me. This attorney also brought up using corporations with a different end of fiscal year and moving money between yourself and the corporation so you aren't paying as much in taxes. I'm not sure about all that. I have a company that is an LLC and one that is a C corporation. The C corporation, I wish was an LLC right now (it's not breaking even). I should probably change it to an S until it starts making money. An S is usually taxed like an LLC, just with more paperwork than an LLC (and more restrictions).

Just remember, all the above advice is worth as much as you paid for it. :-)

We are an LLC out of NY. We have 3 shareholders and decided to go LLC because of liability issues. We also employ staff and contractors which is another deciding factor. Choosing between a sole proprietorship and a partnership is more or less a personal preference, and it depends on how much work you can manage. If you want to go corporate, make sure you consult a lawyer as it is usually a decision best reached on a state-by-state basis. I will recommend going corporate, however. A corporation is kept completely adjacent from your personal assets. If you get sued as a sole proprietorship, for example, your personal assets can be seized. A corporation can prevent that, as long as you keep your business and personal life separate entities. Best of luck. Post back with your decision. :)

I live in NY.I will get an attorney for sure before i form my company but some questions i have that probably you can answer.

I plan to live in NY for another 2 years only.Then move to Florida for an other 3-4 years.After that i might/might not move out of Florida.Even that i will go to Florida is not sure it might as welll be some other state.

Keeping the above in mind and also "agent fees".I know i can be the 'agent' myself in NY.But once i move out of there say in Florida i will need to pay agent fees in NY.

Is it not better to just incorporate in Nevada??

pl advice

To my knowledge, if you have a friend that lives in NY you can have him be your registered agent, he'll be recieving your legal paperwork and all that, then he can forward it to you in florda, then you dont have to pay upwards of $100 a year for a company to handle this for you. Consult with an attorney just in case.

If you're a sole trader but have T&C's on your website expressly disclaiming all liability does the liability still fall back onto you?

If you're a sole trader but have T&C's on your website expressly disclaiming all liability does the liability still fall back onto you?

Yes. As a sole proprietor you are fully liable for your business. You run the business, you call the shots, you're responsible.

Another thing you might want to do is to keep everything separate. Chances are, you won't have any property in this business, but even so, keep in mind that you do need to keep things separate. In other words, remember that anything in the company's name can be taken from you in a lawsuit.

In working with another company, we've learned the hard way to keep property and buildings in a separate company. If things go bad, at least you still have the property and buildings to start over.