I'm considering becoming a reseller. Do I need a business license to be a reseller??

Legal answer - Yes

I love IRS on my back answer - No

Yes, you should seriously consider becoming a business. If you do not you are breaking the law as well as leaving yourself open to be sued for everything you have. Certain business entities have certain amounts of protection when it comes to lawsuits.

I formed a LLC or Limited Liablity Corporation, this provides me with protection from being sued as well as satisfying the IRS. Cost me $130 online in the state of Wisconsin. Try a search in the forums and you will come up with more info.

Regards,

Mike

Thanks! I was just wondering about the legalities. I'de rather spend the money and be legal than end up paying for it later. =) What office should I contact to find out about costs in my state (Georgia)??

Legal answer - NO

You do NOT have to get a liscense. You do NOT have to incorporate (or become an "official" business).

It is NOT breaking the law. Its dumb, but its still legal. The only thing that becoming a corp. does is 1.) tax break, 2.) liability. Liability meaning ppl can only sue the company and not get to your personal assets. But you can be your own business, maybe just do DBA for bank accounts and what not. Thats what a lot of business's do when they are small and starting out.

You need to file with the Secratery of State I believe, not sure, and yes I know I can't spell. Its some government office.

We expidited our incorp. with added more fees (meaning the state filed us being a legal corp faster then the average joe). We paid a total of 600 bucks which included the lawyer fees and filing fees.

Contact a lawyer or an accountant (yes, they can incorp. you too) for the real answers. My information is to the best of my knowledge and should not be taken as legal advice. That said, I'm pretty sure I'm right. :)

Secretary of State
Corporations Division
Suite 315, West Tower
2 Martin Luther King Jr. Drive
Atlanta, GA 30334

Telephone: 404-656-2817

Online: http://www.sos.state.ga.us/corporations/

LLC filing fees in Georgia are $75, not sure about other business models.

Regards,

Mike

Originally posted by IntraHost
Legal answer - NO

You do NOT have to get a liscense.

This is only correct if you plan to operate under your own name. If you are not going to operate under your name the least you need is a DBA, or Doing Business As (a ficitious name) and you can get these with your local clerk of courts.

Incorporating doesn't exactly give you a tax break, in some cases you get what they refer to as double taxation and in some cases such as the LLC it is pass-thru taxation where you pay taxes on your personal income taxes.

Regards,

Mike

Also, many banks require a business license for you to open a business banking account (figures). To do that you at least have to DBA (which if you go that route, you can even contact your local paper - even the free papers, and they will take care of printing it and mailing the forms).

I was wondering if anyone had formed an LLC in the state of california. If you did, how long did it take? I've been waiting for about 5 weeks now and haven't heard anything back from the company that helped me with the formation (www.mycorporation.com).. I recently called them up and they said that the state's filing were back logged. Thanks..

Originally posted by Phiberop
This is only correct if you plan to operate under your own name. If you are not going to operate under your name the least you need is a DBA, or Doing Business As (a ficitious name) and you can get these with your local clerk of courts.
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What counts as "operating under the name xyz"? Does anyone know the legal definition?

It seems to me that there is a grey area in the case of .coms where the domain name is often used as business name... If you refer to xyz.com you could be refering to the domain name, the website operating at that domain name, the people who run the website, or an actual company. Where is the legal line drawn?

I guess that was a little strange the way I worded that. What I meant to say was this. If you plan to run a business with no legal name, IE you... John P. Doe is in fact the 'business'. However, if you plan to use http://www.yourdomain.com, or yourdomain internet people and whatnot... then you need a legal document stating that you are doing business as this name (a DBA) or have incorporated or formed some other business entity (yourdomain internet people and whatnot LLC).

In the case of .com's, if you create a legal document to form a business you can choose any name you wish as long as it is available. The only legal line's that I am aware of are including what kind of business it is. For example, an LLC generally must contain LLC, L.L.C. or Limited Liability Company.

The point of a DBA (technically) is to protect the public so a person can't hide behind a business name. In many states a DBA is the "business license". Sales tax license is another matter but typically hosting isn't subject to sales tax (yet).

Agree about the corp and taxes. There's not much income tax benefit to being a corp. Lots of possible write-offs depending how you set up the business but the corp tax rate is pretty high. Most people incorporate for the liability protection.

BTW, being a corp or LLC might not give you the liability protection you think you're getting. Professional/personal liability is different from business liability. If an engineer forms a corp or LLC then builds a bad design being a corp or LLC won't necessarily protect him from liability. And it's next to impossible to get professional libaility insurance for a host business.

In the United States you LEGALLY must have at least a DBA license. Every city in the US requires a business license to do business, in fact most cities have a sign that says "Business license required in city limits" or something of that nature. It doesn't matter if you use Instabill or Revecom.com, and your only a reseller. Your still selling a service or product within city limits. As long as YOU are selling the service and not directing the customers (Referral Program) to a legal business you must form some sort of business.

Besides, a city DBA license will cost you $50.00 (at least around here).