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  #1  
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Join Date: Sep 2004
Posts: 19

underage starting web host business


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



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  #2  
Old
Web Hosting Master
 
Join Date: Nov 2003
Location: Canada
Posts: 881
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.

  #3  
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Web Hosting Evangelist
 
Join Date: Dec 2002
Posts: 508
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.

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  #4  
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Join Date: Sep 2004
Posts: 19
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

  #5  
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Join Date: Jun 2004
Posts: 27
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

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  #6  
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Join Date: Nov 2003
Location: Canada
Posts: 881
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


Last edited by Captian_Spike; 01-04-2005 at 01:43 AM.
  #7  
Old
Web Hosting Master
 
Join Date: Jul 2002
Posts: 3,350
Re: underage starting web host business

Quote:
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.


Last edited by jt2377; 01-04-2005 at 02:27 AM.
  #8  
Old
Web Hosting Evangelist
 
Join Date: Dec 2004
Location: Fort Lauderdale, Florida
Posts: 481
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

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  #9  
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Join Date: Dec 2004
Location: US
Posts: 49
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

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  #10  
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Join Date: Dec 2004
Location: Fort Lauderdale, Florida
Posts: 481
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.

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  #11  
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Join Date: Nov 2004
Posts: 490
you can start business in the name of your dad or elder brother.

  #12  
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Web Hosting Guru
 
Join Date: Sep 2004
Posts: 311
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+...

  #13  
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Join Date: Nov 2003
Location: United States
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Re: Re: underage starting web host business

Quote:
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.

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  #14  
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Join Date: Dec 2004
Location: Fort Lauderdale, Florida
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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.

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  #15  
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Join Date: Sep 2004
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Oh right. As I've said, I am unsure of U.S laws...

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