If it was not a hard thing to do everyone would be doing it and quite rich on top of all that.

My company has been around since 2000 and has been "decnetly" susccessful nothing to brag about but it has always been in the green and provided a decent income.

This is not my primary source of income obviously.

But I hope with my latest projects released that it will soon be my one and only source.

I'm thinking about starting my own software company.

Register in one state. I like deleware. You will need a valid business adress for the headquarters and to file your state taxes, etc. There are businesses that you pay yearly to act as your headquarters for your corp. if you are not in state residence. All though its technically not required, its always a good idea (tax incentives).

Good luck.

-BX

Each State varies too... When I opened my corp the fees where 200 to have the "inc"

Now its 550 a year...

For me personally, I probably would register my online company in the state that I'm in, only because at some point part of the company won't be online.

I always wondered what the procedure was for online businesses. I bet Delaware has 90% of all online businesses.

It's actually cheaper to have your headquarters in delaware and operate in another state (most of the time).

The "registered agent" services are really cheap, like 150$ a year. All mail sent to your headerquarters gets automatically faxed or emailed from the registered agent to your region of operation.

check this out: http://www.delawareintercorp.com/ra.htm

Wow!

I was surprised that not a single person mentioned you do not HAVE to be a corporation (or S Corp, or LLC, or any other 'structured' business entity)!

You can always go into business for yourself, by yourself, as a sole-proprietor. When you are still small scale, and especially if you have no assets to start with, this can be an especially attractive option.

For one, it's easier to file taxes... only a Schedule C on your 1040 long form, instead of a a whole new set of forms. You also can get an EIN from the IRS as just a sole proprietor. This legitimizes your business, and helps prove that you are actually intend to be 'in business.'

Of course, if you have partners, just form a partnership. But there are two kinds, and this is where the big decision lies, whether you have partners or not.... How much risk are you willing to take?

A General Partnership, like a Sole Proprietorship, puts all of the owners 'at risk'. This means is the business becomes liable for a debt, whether back taxes, employment fines, or you get sued for doing a bad job, or causing injury, if the business can not pay for it, then a claim for damages or repayment can be made against the owners.

By the way, the other kind of Partnership is a Limited Partnership, which protects only some, and not all of the Partners from risk. Plus Limited Partners can't be involved in the day-to-day operations of the business, so I wont dicuss that any further.

If you form a corporation, S Corp, LLC, etc.... the owners protect themselves from liability. They can not be held responsible for anything more than what they have put into it. If the business goes bankrupt, thats all she wrote. Unless criminal liability can be proven, the owners dont have to pay up for business damages. But the downside to Sole Proprietorships and Partnerships is that if the business still has debt after they go bankrupt or out of business, then the owners can be sued as well.

But then again, most states require a substantially different tax structure if you establish a business entity that protects you from liability. Thats fine if you have the legal and accounting knowledge to handle it. If not, you will incur many more costs than a start-up business may be able to afford, especially without operating capital. But if you don't, and are just getting off the ground, then you would bes best to consider a less structured entity.

The best bit of advice I could give, is to go to the US Small Business Administration Onlince center at http://www.sbaonline.sba.gov/, and use the state links there to get comprehensive information about your options on a state-by-state basis.

But if you have any questions about California, I may be able to help. I have started a General Partnership and a Corporation up in California in the past ten years, and do know something about the process and requirements for this state.

Elohir

No you do not HAVE too.. But if you plan on doing REAL business it is pretty much a requirement.


If you plan on being an ebay seller and run your business this way then sure being a sinle indiv. will work fine.. but as I mentioned a few posts ago be aware of the tax consequences.

In any event if you plan on having a sucessful business.. incorp now.

Another thing to consider:
When you register in your state, you name is protected in that state only.
When you register DEL or NV it is US protected for the most part.

Meaning there can be a JimmySoft, inc in Oklahoma registered in Oklahoma
But JimmySoft, inc registered in DEL or NV will be the only one registered nationally, but can do business in Oklahoma.

Also currently you have to pay sales on sales in your state and pay quarterly in most cases. But if you are an internet company, you don't have to pay for the other 49 states. But all is taxed as income depending on your corp type. LLC/S corp.

Kegtapper

Well am sorry to dig out an old thread, but could not help asking this! Being an online company does it also require to go through all the process that have to be undertaken by any normal companies? I ask this because one of my known persons has been involved in setting up such a company but I cant remember him setting up any such legal issues!