Confused about online business

[agcssautomotive.com]

Well, I have no problem doing a great site and delivering great service... So thats the easy part. The dark area is the legal stuff that goes behind it.


Can I just open domain.com and sell stuff and services, or am I required some sort of licenses, state registration, etc, etc? Can someone give me a break down of what is needed?

[areidmtm]

I beleive that if you are talking money from someone for a service or product and you are making more than $600 a year, then by law you have to register the business and get a business licensed.

That may very from state to state. Business licences are usually $10.00 a year and $50 a year to register it. Something like that. I'd check out your business page http://business.{STATE}.gov/

[redsox9]

That may or may not be true depending on the business. My home business, on average, generates a modest profit, i.e., nothing that would allow me to even consider quitting my primary occupation, and is not registered with any local or state jurisdictions. Of course, I'm not selling goods directly; instead, I work on a commission basis. It's also a sole proprietorship so I don't need an EID. Then I simply report my earnings and expenses using a Schedule C and keep a careful record in case the IRS comes knocking (and I've experienced that once already and successfully passed the audit thanks to my due diligence).

Just the same, I would follow the advice of areidmtm and check with your state.

[redsox9]

Out of morbid curiosity, I just checked with the Massachusetts government business web page and, according to the rules there, I am not required to register as none of the following criteria apply to me:

• Employ people working in Massachusetts.
• Withhold from a pension plan, annuity or retirement distribution.
• Sell or rent taxable items in Massachusetts.
• Sell taxable telecommunications services in Massachusetts.
• Serve meals and/or beverages in Massachusetts.
• Purchase goods in Massachusetts for out-of-state resale only.
• Provide lodging in Massachusetts subject to the room occupancy excise.
• Seek exemption from the Massachusetts sales/use tax as a Governmental, Charitable or Non-Profit organization.
• Wish to register as a Chapter 180 organization selling alcoholic beverages.
• Make regular or occasional out-of-state purchases on which use tax must be paid.
• Collect any of the convention center financing surcharges.
• Sell, acquire, or import cigars and/or smoking tobacco or hold cigars or smoking tobacco for sale or consumption in Massachusetts.

My guess is that other states will have similar rules to follow.

[terrakeramik]

Depending on what you sell and whether or not you may incur any legal liability (and the possibility of litigation), you may want to explore setting up a limited liability company in your state to separate your business assets from your personal assets. Check with your state gov site of google "LLC".

[dkinzer]

[...]you may want to explore setting up a limited liability company in your state to separate your business assets from your personal assets.

Neither an LLC nor a regular corporation (Sub-S or Sub-C) gives you absolute protection from liability. "Piercing the corporate veil" is great sport for personal injury lawyers and other "rent seekers". That's not to say that it is useless, just that it's not perfect. See your attorney for specific legal advice that applies in your locale.

[aceofspades]

setting up an LLC always helps although it is by no means bulletproof. LLC is probobly the most popular type of corporation for small buisnesses. It is really easy to create an LLC. Just look to se if the name isnt taken and rquest and pay a few fees.