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  1. #1

    Type of Business. Incorporate right away?

    I'm looking to give web hosting a serious shot as I am very interested in this type of business.

    My question to those who have started up already is if you tried it out first as a sole proprietor and then incorporated later on after showing signs of success? Did you incorporate at all?(is it worth creating a company structure?)

    What is the best business type to use. Balancing limitation of liability (if any exists) with ease of startup and ease of preparing your taxes.

    The type of business I am looking to have (side business) I would be happy with 100 customers and exctatic with 500.

    All advice greatly appreciated.



  2. #2
    Join Date
    Apr 2005
    Atlanta, GA
    Ackoo is organized as an LLC which sheilds from alot of liability, however, for tax purposes its treated as a sole propriotership or a partnership. You can always incorporate at a later date. However, if you incorporate from the beginning you can't unincorporate.

    Personally, I would not recommend taking this route. If you do however, I would consider a S Corportation.

    Best of luck.
    [color=#666666]Ackoo Solutions, LLC

  3. #3
    Went the LLC route also for the liability protection (more than selling under my name at least), and for credibility. It's a company name you can put on your sites, on credit card statements, on business cards, etc, and gives potential customers some confidence that you're not gonna disappear overnight.

    Couldn't be easier for taxes either. Load up the $30 copy of TaxBooks 2004, enter it all in "income from a business", and yer done.
    Dan Grossman - dan @
    My Blog | Affiliate Program for Web Hosts

  4. #4
    Join Date
    Jan 2005
    Minneapolis, MN
    Also went the LLC route. Talk to an accountant as every state has different pros and cons of LLC/Corp/nothing.
    Doyle Lewis
    BuyHTTP Internet Services - In business since 2003
    Business Hosting | nginx, CloudLinux, Varnish cache, and CDP with every business account
    Shared, Reseller, Semi Dedicated, VPS, Cloud, Dedicated - We can grow with you

  5. #5
    Join Date
    Apr 2003
    San Jose, CA.
    You really should research exactly the pro's and con's of the various types of entities... Sole Proprietorship, S Corporation, C Corporation, and Limiated Liability Company.

    One or more of the above might be completely useless for you depending on what you hope to achieve.

    Two main things you should understand and consider are the tax implications of each type, and your intent on keeping your company private or possibly going public in the future and obtaining investors.

  6. #6
    Join Date
    Nov 2002
    contact your local office, they can help you figure out whats best...

  7. #7
    Join Date
    Feb 2005
    We started an S corp from the beginning for a different business and haven't regretted it. I just use a DBA for the hosting company off the main corporation. Since I'm in Wyoming is isn't as big a deal (or nearly as expensive) for a corporation to be dissolved in order to create a new one.

    I like to set up a new corporation (usually an LLC) whenever I partner with anyone on a business project that generates revenue. Get it done properly and everyone in the corporation will benefit in the long run. The important part is to make sure that everyone has a way out and that the wording is clear when it comes to any profits after leaving the corporation. How is a leaving member bought out (long story).

    As has been mentioned in past threads, consult with a lawyer and accountant, you're sure to get lots of opinions.

    Bill Hastings

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