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Thread: Starting an official business
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01-03-2014, 04:39 PM #1Newbie
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Starting an official business
Howdy everyone, first off my apologies if this is in the wrong section.
I own a hosting company, but it's not an "official" company. No registrations. I am only 16 years old and we have 7 nodes currently, all hosting virtual machines.
I'm just curious as to when a web/vps-hosting company should take the step of officially registering their business, what the pro's and con's of having an officially registered business.
Thank to all that post.
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01-03-2014, 05:31 PM #2Web Hosting Master
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You should have already considered registering your business prior to accepting your first sale. Where are you located?
If you are in the US, you aren't allowed to have a merchant account or PayPal account as a minor, so did a parent open this for you? The business would have to be registered in a parent's name and it would be best to open it as an LLC so their personal assets aren't liable.
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01-03-2014, 05:44 PM #3Web Hosting Master
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Should be registered as soon as you started trading
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01-03-2014, 05:45 PM #4Web Hosting Master
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Consider consulting accounting and legal services for your particular situation. With no details provided you can only get wild guesses.
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01-03-2014, 05:48 PM #5Web Hosting Master
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The pros and cons??? The cons should be fairly evident...what you are doing is likely illegal. That should be con enough. Somebody just has to look at this thread, report you to your state's Attorney General, and you'll be shut down, potentially ordered to pay back taxes, fines, etc.
And furthermore, since you can't enter a contract legally, I would guess all your clients could simply get their money back from you at any point, either through the courts or otherwise. You have no contract with any of your clients.
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01-03-2014, 05:55 PM #6Newbie
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01-03-2014, 05:56 PM #7Newbie
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What I've been told is I don't have to register it until I receive an x amount of income?
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01-03-2014, 05:57 PM #8Junior Guru
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Technically, if you are running it 100% on your own with no employees, you don't have to register it. You can sell hosting as an independent contractor.
However, over the years we've seen teens come and go and rip people off, disappearing after so long. Not that teens are the only ones doing this..
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01-03-2014, 06:01 PM #9Newbie
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I am running it about 90% by myself, I have a sales representative currently but it's nothing official, just a good friend of mine who I trust very much. Completely understandable but I am in no interest of scamming anyone, if I were to scam people I'd lose potential money.
If it makes a difference I am a licensed network Administrator, I have certifications from CompTIA and Cisco.
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01-03-2014, 06:02 PM #10Web Hosting Master
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01-03-2014, 06:05 PM #11Newbie
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01-03-2014, 06:21 PM #12Newbie
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I am unsure of what is required of person or persons wishing to register a business name and/or Company in Canada. However you must be of 18 years of age before being able to enter into a legally binding contract. So on that note your parents would have to be a benefactor(Sponsor) and register the business for you, until you reach the age of 18. However I do advice taking a look here : cra-arc(dot)gc(dot)ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html
Also as far as I can recall a fee when registering a business name and/or company is present. Although I'm basing this of what it is in IE. So it may differ in Canada and the fee rate may differ from state/county to state/county.
Edited : Typos
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01-03-2014, 06:29 PM #13Junior Guru
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As long as you and your friend are working as independent contractors, you're fine. But, you do have to claim your income and do taxes either way.
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01-03-2014, 06:30 PM #14Web Hosting Master
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Don't know a thing about Canadian law, but in the US, your option as a minor would be to start an LLC or Corporation with you simply being one of the officers. And even then, various rules apply. Your parents, or somebody over the age of 18, would actually have to start the Corporation, take care of the paperwork, etc.
Canada? Who knows...
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01-03-2014, 06:35 PM #15Newbie
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01-07-2014, 02:21 PM #16New Member
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Registration of your business allows you to present yourself as a more professional organization. The only time it really becomes necessary or important for you to register your business is when you begin to take on employees at which point you will need a license to operate your business. This is typically called an EIN which stands for employer identification number. This allows you to pay taxes on the wages paid out. Regardless, focus on driving clients into your business first. Until you are making sales it doesn't really matter much what you do. The real focus is on crating a plan for growing and improving the client base of your company and its' overall value on the market.
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