Heyy!

I'm going to release website this week !I'm debating if I should establish an LLC for my business as soon as I release the website? Or should I wait until I build up my clients and then establish an LLC? Also how can i copyright my material? Do I do that through a lawyer or is there a website where i can do that? Thank you very much!

In answer:

1) Wait until you can afford an accountants advice before you go LLC
2) Ask your accountant
3) Everything you write is copyrighted automatically, burn it to cd, put it in a tamper proof envelope and post it to yourself.

This belongs better in the Running a Webhosting forum, IMO.

Like another has said, the copyright is already there.

Now for LLC, it's really up to you. You don't have to LLC now, but I would probably recommend it. LLC would help protect you personally from liability. So if you have the money, I would go ahead and get that done. Otherwise, let's say that an ex-customer decides to sue you for something. They could go after you and your company. If you were an LLC, they could go after the company, but it would be limited in how they could go after you personally.

watzursn,

I would speak with your accountant first, or seek out the advice of one. There are so many variables to work with that determine what is best for you and what you plan to operate. LLC, Corporation (clases C, C, N and so on). It can be quite complicated.

Good luck and let us know what you do. Also, you might want to post this in the webhosting business end forum.

www.legalzoom.com may be of help to you.

I second Legalzoom! I used them myself, in fact.

My advice, this is coming from an entrepreneur with a degree in business management (and I am not a lawyer so you may want to consult with one to verify what I am saying is good for your juristdiction also), is have a sole proprietorship first to save money. Your contracts with your clients (Terms of Service) will limit your liability from them.

By law, you are not liable for content your clients post for the most part, so unless you are hosting some very questionable sites this won't be an issue at all either way -- even then you should be okay, but you would want extra protection "just in case".

Later on once the money starts flowing go ahead and do the LLC thing as that limits your liability further and helps you later on if you ever decide to sell the business.



Trademarks and copyrights if you file for them formally will cost you several grand, whether you use legalzoom or not. The lawyer fees are cut down by a service like legal zoom but federal filings are not. This is very expensive for someone starting out so unless you have a killer concept, name, theme, brand or other copyrightable or trademarkable stuff you probably are playing way over your head.

Technically and legally your stuff is copyrighted the moment it goes on the web. If you can somehow maybe get some notaried statements or documents containing your copyright to prove you had them at a certain date, that's probably all the protection you'll need for a regular small business.




The steps I would take to formally start my company are:


1. Establish a sole proprietorship (filing fee is usually very low for a DBA certificate in most jurisdictions, legal zoom handles this for you + gets you an IRS number for as little as $350 -- which is what I paid for my company.)




2. Set up QuickBooks or other financial software to keep track of expenses and revenues. These programs will give you a great picture of where your company is at and where it is headed (like for bankrupcy or for riches) and save you time and money at tax time.




3. Build a solid business model.

I really hope you have some unique selling point or competetive point because the web host field is VERY crowded. If your main selling point or what you think seperates you from your competitors is "price" or "service" you are destined to fail and fail miserably -- that is because all 5 billion hosts out there use the same two "unique" selling points on their site.

So I would think long and hard about what it is that makes you different from everyone else.




4. Have a business plan.

Make sure you have a releastic plan for how you will aquire your first customers and customers from that point forward. If you are counting on a few ads in newspapers or online ads and referrals to bring you money on a silver platter you better have some killer ads that will make ad agencies cry for not thinking of or you will fail.

The most reliable plan I can think of for this industry would be one that combines premium pricing (that means price HIGHER than all your competitors), emphasizes unique services (not just good service, which is a must anyway, but service that other people just don't offer: maybe personalized periodic reports about site traffic, website strategy consulting, access to a website "go to guy", etc), and focuses on marketing offline.

What I mean by that is marketing to brick and mortar places that already have websites as well as partnerships with website designers and IT people who will be setting up websites for companies (so they can refer your hosting business for some commission to people just starting out).




As far as taxes and that goes, its pretty simple: print out the profit and loss reports from Quickbooks and take them to your tax preparer. Also be sure to print and save ALL receipts of expenses you make for your business if you want to deduct them from your taxes. You must keep such records for 6 or 7 years I believe in case you are audited. The last thing you want is 5 years down the road from now for the IRS to audit you and slap you with fines and penalties because you can't find the receipt for the $8 domain you bought for your company!


That would be my advice, keep in mind I am not a lawyer so do not take this as formal legal advice - I am just someone with a Bachelor degree in business management and entreprenurial experience.

Fwiw, regarding a poor man's copyright...
http://www.copyrightauthority.com/poor-mans-copyright/
or wikipedia "poor man's copyright"

ie, probably not worth your time.

It's actually not expensive to set up an LLC. Visit your state tax/revenue department's web site to learn more.

It might be a better idea to start off a sole propreitorship and then switch to an LLC. It is better to avoid overheads initially and to take things slow and steady.

Good luck with starting your business :)

In most states you can register and pay for an LLC online for under $100. Wht state are you in?

I second Legalzoom! I used them myself, in fact.

My advice, this is coming from an entrepreneur with a degree in business management (and I am not a lawyer so you may want to consult with one to verify what I am saying is good for your juristdiction also), is have a sole proprietorship first to save money. Your contracts with your clients (Terms of Service) will limit your liability from them.

By law, you are not liable for content your clients post for the most part, so unless you are hosting some very questionable sites this won't be an issue at all either way -- even then you should be okay, but you would want extra protection "just in case".

Later on once the money starts flowing go ahead and do the LLC thing as that limits your liability further and helps you later on if you ever decide to sell the business.



Trademarks and copyrights if you file for them formally will cost you several grand, whether you use legalzoom or not. The lawyer fees are cut down by a service like legal zoom but federal filings are not. This is very expensive for someone starting out so unless you have a killer concept, name, theme, brand or other copyrightable or trademarkable stuff you probably are playing way over your head.

Technically and legally your stuff is copyrighted the moment it goes on the web. If you can somehow maybe get some notaried statements or documents containing your copyright to prove you had them at a certain date, that's probably all the protection you'll need for a regular small business.




The steps I would take to formally start my company are:


1. Establish a sole proprietorship (filing fee is usually very low for a DBA certificate in most jurisdictions, legal zoom handles this for you + gets you an IRS number for as little as $350 -- which is what I paid for my company.)




2. Set up QuickBooks or other financial software to keep track of expenses and revenues. These programs will give you a great picture of where your company is at and where it is headed (like for bankrupcy or for riches) and save you time and money at tax time.




3. Build a solid business model.

I really hope you have some unique selling point or competetive point because the web host field is VERY crowded. If your main selling point or what you think seperates you from your competitors is "price" or "service" you are destined to fail and fail miserably -- that is because all 5 billion hosts out there use the same two "unique" selling points on their site.

So I would think long and hard about what it is that makes you different from everyone else.




4. Have a business plan.

Make sure you have a releastic plan for how you will aquire your first customers and customers from that point forward. If you are counting on a few ads in newspapers or online ads and referrals to bring you money on a silver platter you better have some killer ads that will make ad agencies cry for not thinking of or you will fail.

The most reliable plan I can think of for this industry would be one that combines premium pricing (that means price HIGHER than all your competitors), emphasizes unique services (not just good service, which is a must anyway, but service that other people just don't offer: maybe personalized periodic reports about site traffic, website strategy consulting, access to a website "go to guy", etc), and focuses on marketing offline.

What I mean by that is marketing to brick and mortar places that already have websites as well as partnerships with website designers and IT people who will be setting up websites for companies (so they can refer your hosting business for some commission to people just starting out).




As far as taxes and that goes, its pretty simple: print out the profit and loss reports from Quickbooks and take them to your tax preparer. Also be sure to print and save ALL receipts of expenses you make for your business if you want to deduct them from your taxes. You must keep such records for 6 or 7 years I believe in case you are audited. The last thing you want is 5 years down the road from now for the IRS to audit you and slap you with fines and penalties because you can't find the receipt for the $8 domain you bought for your company!


That would be my advice, keep in mind I am not a lawyer so do not take this as formal legal advice - I am just someone with a Bachelor degree in business management and entreprenurial experience.

thanks for this post mate I was wondering what to do since Im starting up a design company and this helped me out

Also in the state of California its more then most states

thanks for this post mate I was wondering what to do since Im starting up a design company and this helped me out

Also in the state of California its more then most states

You're right. I'm in Utah so it was a bit cheaper. http://www.commerce.utah.gov/, my credit card, and about 20 minutes is all it takes me now a days. I wouldn't suggest this method to anyone registering as a Corp or S-Corp. For that it's best to hire a CPA.

Sole Prop, LLC, and LLP can be managed by anyone with a good head on their shoulders. But there's always a certain point when it's time to pay a professional.

Best of luck, and welcome to the "legit business club", where the beauty of write-offs are just the beginning.:D

I have used legalzoom.com myspace in the past. I recommend them.

Do yourself a favour and get Garett Sutton's "Own Your Own Corporation", part of the Rich Dad series of books. It's available on Amazon.

It has what is probably the best information of its kind for newbies on different forms of business incorporation in the United States and the pros and cons of each with case studies. I am not from the U.S, but I have still found so much value in the book. It will save you hundreds of dollars when you actually see an attorney.

Gregbot, this isn't a criticism, but after reading the book, I know that using a sole proprietorship is the most dangerous form of incorporation, despite the business contracts one may have.

Do yourself a favour and get Garett Sutton's "Own Your Own Corporation", part of the Rich Dad series of books. It's available on Amazon.

It has what is probably the best information of its kind for newbies on different forms of business incorporation in the United States and the pros and cons of each with case studies. I am not from the U.S, but I have still found so much value in the book. It will save you hundreds of dollars when you actually see an attorney.


Do yourself a favor and get everything by Robert Kiyosaki. I actually used to work with/for him a few years back and he's a genius! I wouldn't be where I am without his guidance.


Gregbot, this isn't a criticism, but after reading the book, I know that using a sole proprietorship is the most dangerous form of incorporation, despite the business contracts one may have.

I agree, sole proprietor is almost always a bad way to go, "almost". It's always about the liability, which LLC protects you from.

In answer:

1) Wait until you can afford an accountants advice before you go LLC
2) Ask your accountant
3) Everything you write is copyrighted automatically, burn it to cd, put it in a tamper proof envelope and post it to yourself.

Well said mate :)

Wait till your more established before you go LLC. since it does take time and money and all that paperwork.

Hiring an accountant might be extreme but whatever helps.

Do yourself a favor and get everything by Robert Kiyosaki. I actually used to work with/for him a few years back and he's a genius! I wouldn't be where I am without his guidance.

Wow, great to hear from you, then. :)

I actually have purchased most of his important books. And, CashFlow Quadrant has really opened my eyes. I used to think I was running an Internet services business, but Kiyosaki's fantastic delineation of the characteristics of four types of people (Employee, Self-employed, Business person and Investor) showed me that I am actually self-employed.

That insight alone has dramatically changed the way I am going about my business in the last one month. And, it would have never happened but for that book.

Wait till your more established before you go LLC. since it does take time and money and all that paperwork.

Why do you thing it takes so much? I've established 6 LLC's now and although there are some quirks depending on how you structure things, it's much simpler and cheaper than most think. Waiting could be the right choice, but it could also be an extremely bad one.

Obviously none of us are truly qualified to give advise, but from my experience it's always best to be legit from the start. It may cost you $150-$500 to do it yourself, or in the thousands if you have a professional do it. But anyone serious about their business should understand the risk of not establishing an entity, verses making a educated investment.

Wow, great to hear from you, then. :)

I actually have purchased most of his important books. And, CashFlow Quadrant has really opened my eyes. I used to think I was running an Internet services business, but Kiyosaki's fantastic delineation of the characteristics of four types of people (Employee, Self-employed, Business person and Investor) showed me that I am actually self-employed.

That insight alone has dramatically changed the way I am going about my business in the last one month. And, it would have never happened but for that book.

Personally I highly suggest anyone at least read "Rich Dad, Poor Dad" even if they have no plans to invest or own businesses. I've given many of Robert's books to friends and family, but unfortunately many aren't willing to invest the time, open their mind, and reconsider everything they know about money.

Since Robert's initial influence I've gone from bankrupt to debt free with a nice net worth, especially for my age. But even with that proof everyone seems to stuck in their ways. So I'm glad to hear when others get their foot in the door and open up to what actually possible.

A LLC is a passthrough entity for tax purposes in most cases.

You could form a LLC using a more generic name and have a DBA registration for the website in the name of the LLC. That way, the LLC is an umbrella that you can use even if the first website fails. If it takes off, well then you have more than enough money to register another LLC for the next big thing.

A LLC is a passthrough entity for tax purposes in most cases.

You could form a LLC using a more generic name and have a DBA registration for the website in the name of the LLC. That way, the LLC is an umbrella that you can use even if the first website fails. If it takes off, well then you have more than enough money to register another LLC for the next big thing.

Well said. When I started out "the umbrella" was important as my first 2 businesses ultimately failed.

There is NO need to use legalzoom, all you need to do is call your "secretary of state". They will fax you the appropriate forms you need to declare yourself an LLC. I paid a $150 filing fee and got my federal tax ID #, and am good to go.

You may want to check into that first!

Thanks
Tom

I would not recommend getting an LLC at this time, because you have no idea what will happen to your company in the near future (it may last decades or it may last less than a year). It would be smart to wait until you have the money to risk it.

Also, you do know that an LLC is not instantly created, don't you?

I would not recommend getting an LLC at this time, because you have no idea what will happen to your company in the near future (it may last decades or it may last less than a year). It would be smart to wait until you have the money to risk it.

Also, you do know that an LLC is not instantly created, don't you?

Although it took some work, it wasn't as hard as I thought to go from LLC to S-Corp. IMO it makes sense to risk a few hundred $. You can end up in a far worse position without an LLC than having one and changing your company around.

If you don't have a few hundred to risk you probably should reconsider things a bit. Any business worth starting is at least be worth that risk IMO.

Consider the costs of an LLC now verses the possible liability costs without one.

When I formed C-Corp (I know, the OP is looking for LLC, but the actual procedure is not that different), I was looking to go with LegalZoom or BizFilings, but the truth of the matter (which I found out after all my research) is that you will just be wasting money if you go through them.

Filing with your state is not all the different from filing via LegalZoom and the like. Instead of you filling in the blanks on the application form, LegalZoom will do it for you and thats what they charge you the money for. I know I know, they have a lot of BS on their website which makes filing directly with the state look cumbersome, but the fact of the matter is that its not all that different.

Of course, not all states have online filing, like NJ does. But even going to your local filing office is not that bad.

I would certainly NOT recommend to be a sole proprietorship if you plan to have a decent business. There are too many personal liability clauses that's involved. An LLC or Corp would be the way to go. I'd also suggest to register the company yourself instead of using a company to do it for you. You can save those fees that companies like legalzoom would charge you, since it's not that hard. Just go to your State page and file everything yourself including:

Name of Entity
Your LLC or Corp filing - (can be done via web in most state)
Obtaining a Tax ID (free from IRS, can be done via web)
and register to pay tax..(can be done via web)
business license can be obtained locally if you plan to have a physically loc.

Then cha ching...you're in business.

I'd also recommend to register with companies like "PRE-PAID Legal" for legal services. The reason why they're good for starting companies is that you only have to pay a small Monthly premium, and they'll represent your company and give you all of the legal assistance that your company will need.

I can give you more specific details if you need. Good luck.


It might be a better idea to start off a sole propreitorship and then switch to an LLC. It is better to avoid overheads initially and to take things slow and steady.

Good luck with starting your business :)