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  1. #1
    Join Date
    May 2002
    Posts
    200

    Creating a hosting company...

    I am in the US and would like to know exactly what I need to do to make my business legal. Just to make sure that nothing can affect my practices later on...

    Next, what is the difference between Inc and LLC?
    Last edited by Derek; 07-09-2002 at 04:28 AM.

  2. #2
    Before answering that question, why do you even want to bother to incorporate? Unless you plan to do any real hiring (freelancers don't count) or to have assets in a name other than your own, it really serves no purpose. As far as liability, everyone still makes you personally liable, and if we are talking about a "company name", does it matter outside what the charge says on a customer's credit card bill?

  3. #3
    Join Date
    May 2002
    Location
    Minneapolis
    Posts
    339
    Talk to a lawyer.
    Dot Simple LLC
    aim: johna11en | yah: johna11en | msn: [email protected] | e-mail

  4. #4
    Join Date
    May 2002
    Location
    Edmonton, Canada
    Posts
    978

  5. #5
    Join Date
    May 2002
    Posts
    200
    I guess I give the hundreds of people that own hosting companies here too much credit?

  6. #6
    Join Date
    Nov 2001
    Location
    The South
    Posts
    5,403
    Yes.

    Talk to a lawyer.
    Gary Harris - the artist formerly known as Dixiesys
    resident grumpy redneck

  7. #7
    Join Date
    Jun 2001
    Location
    rules.php
    Posts
    272
    yeah i agree.. every host needs contact with thereown lawyer

    from what i hear every state is different.
    ...::: HOST APPROVAL :::...
    Web Hosting Directory
    http://www.hostapproval.com/
    http://www.hostapproval.com/hostadmin/add_your_host.php

  8. #8
    Join Date
    Jun 2002
    Location
    Arabia
    Posts
    678
    Huge subject, here is nice colection of tips and guidlines:

    http://www.webupright.com/business.html

  9. #9
    Join Date
    Jun 2000
    Location
    Southern California
    Posts
    12,121
    Originally posted by Derek
    I guess I give the hundreds of people that own hosting companies here too much credit?
    It is not that they haven't done it, it is that various states handle things differently and may have advantages and disadvantages for you, as does Inc and LLC. It is something you need to speak to a lawyer and/or CPA about to determine what is right for you and your situation.
    HostHideout.com - Where professionals discuss web hosting.

    Chicken

  10. #10
    Originally posted by bambenek
    Before answering that question, why do you even want to bother to incorporate? Unless you plan to do any real hiring (freelancers don't count) or to have assets in a name other than your own, it really serves no purpose. As far as liability, everyone still makes you personally liable, and if we are talking about a "company name", does it matter outside what the charge says on a customer's credit card bill?
    Well, despite what this guy says, the liability protection is enourmous. Just make sure you sign everything as an officer of the corporation, not as yourself.

    But despite that, you still should consult a lawyer. Just consider it part of your startup costs.

    Good luck,
    --
    Bill Leonard, Internet Systems Engineer
    http://www.xrackhosting.com
    Mac OS X Hosting Done Right!

  11. #11
    Join Date
    Mar 2001
    Location
    Downunder..
    Posts
    2,612
    Yes talk to a lawyer

  12. #12
    Join Date
    Jul 2002
    Location
    San Luis Obispo, CA
    Posts
    818
    and DO NOT get a partner. I learned this the hard way, do it yourself. I am in a legal battle now

  13. #13
    Join Date
    Apr 2002
    Location
    Sacramento, CA
    Posts
    220
    Derek,

    Unfortunately, I too am going to agree with most of the above people, you should utilize a lawyer to determine which type of business you should operate. However...

    Originally posted by bambenek
    Before answering that question, why do you even want to bother to incorporate? Unless you plan to do any real hiring (freelancers don't count) or to have assets in a name other than your own, it really serves no purpose. As far as liability, everyone still makes you personally liable, and if we are talking about a "company name", does it matter outside what the charge says on a customer's credit card bill?
    Is very far from the truth.

    These days anyone can sue you for almost anything... oh... your server was down for an hour? next thing you know you loosing your house because the judge decided that "company a" should get reimbursed for lost business of 350k.

    It is a reality.

    After you have incorporated or become a limited liability company the only way someone could go after you personally is if you place a personal guarantee in a contract. Typically the only time that you will do this is in a lease for equipment or a building. The leasor will want the guarantee mainly if you are a new business.

    You must never refer to yourself though only the businesses legal name in all documents that the client will ever read. If you refer to yourself even once they could probably find a loophole to attack you personally.

    Talk to a lawyer... Become a legal business entity.... be carefull.
    Joel Strellner

  14. #14
    Join Date
    Dec 2001
    Location
    New Orleans, LA
    Posts
    581
    If you are starting out you can essentially get some legal advice for free. You really must get a lawyer if you are serious about starting a business - it doesn't cost you anything to "get" a lawyer - it only costs when they do some work for you.

    Ask around people you know or local businesses to find the names of some lawyers with a good reputation - then interview them (maybe 2 or 3 of them). Ask them these types of questions

    1. What type of business structure would be advisable? (here is your free advice!)
    2. What experience do they have with technology related issues?
    3. What is their approach with new businesses?

    This 30 min discussion will cost you nothing! Look for the lawyer that has some recommendation, has some technology experience and is willing to cut you some slack at the start. Good lawyers will want to build a long term relationship with your company & will go a bit easy on the billing hrs at the beginning.

    The 1st task for your lawyer is to set up your business entity - this will cost of course (around $500 to set up an LLC)

    Just to repeat over - If you are serious about starting a business then get a lawyer. The right business structure absolutely WILL provide you with liability protection.
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  15. #15
    here's another link http://www.nolo.com/

    also depending on which state you are in. check out the website. usually they have complete information on how to set up a business.

    i set mine up as an LLC. and yes, i would strongly suggest you register some type of protection so that nobody can directly attack your personal assets.

    plus, finding stuff to write off and deduct is fun. like my shiny brand new super computer...he he for business related stuff of course.

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