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Old 23rd July 2008, 11:09 AM   #1
skullp
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Exclamation Online Service Questions

Hi, I am currently starting my first online service, and I have a few questions that research could not really help me solve

I am putting together a forum populating service for forum webmasters, and I am going to need "posters" (people that go and write on the forums) do I need to pay them benefits? do I need to make like contracts or agreements, etc? are there already made ones so I don't have to contact my lawyer? Do I have to register the company name? in other words, what are the requirements, so during the curse of the services life I will not encounter Major legal difficulties?

Help is greatly appreciated!

I thank you all in advance!

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Old 23rd July 2008, 12:25 PM   #2
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Seems like a good business idea. I would FIRST make sure it is a viable way to make money, then be sure you can market the company. Start small by contracting a single person (or doing it yourself). Only grow as needed.

Forming a company is pretty easy with all of the resources online. For tax purposes I wouldn't hire employees, I would hire contractors.

best of luck, let us know how your progress...

Nick

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Old 23rd July 2008, 04:28 PM   #3
DeenaEsq
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Skullp,

Let me see if I can help you... As far as forming a company goes, you can either form an S-Corporation or LLC (Limited Liability Company) with your Secreteary of State or you can file a DBA (doing business as) with the Secretary of State so that you can work under your business name (and get a tax id and a bank account) as a sole proprietorship.

If you're at all worried about liability, I would suggest forming a company rather than working as a sole proprietorship. Here's why. When you work as a sole proprietorship and you get sued, they can attach all of your personal assets as well as the assets of the business.

In forming an S-Corporation or an LLC, you create a separate entity. It affords you a liability shield while allowing flow through payment and taxation (instead of with a C-Corporation where you pay taxes on the company money and then on your income). I generally suggest LLCs. They have all the benefits of an S-Corp, but are usually cheaper to form, but certainly you can pick either.

The thing you have to be careful of, particularly as a single shareholder S-Corp or as a single member LLC, is that you follow the formalities required to prove that the Corp or LLC is a separate entity. Here's how I usually explain it so that it makes sense. When you've formed an LLC or an S-Corp, your company is NOT you. It's an entirely separate entity.

Think about it like another person. Let's call the company Bob. Bob needs to have his own bank account, credit card, etc. You can't randomly take Bob's money out of his account without a legitimate reason (i.e., salary, reimbursement for money you've laid out on his behalf, etc.). If you want something that belongs to Bob, you need to contract with him for it. If you want Bob's employees to do something for a new company you're starting, you need to pay Bob for it. Get the idea? In order for a court to treat Bob like a person separate from you when someone sues Bob, you have to have been treating Bob like it's not you. LOTS of first time (and not so first time) business owners find out that they've lost their liability shield when it's too late. If you're going to bother creating a company to protect your personal assets, make sure you do it right.

Ok, so now that I'm off that high horse....

I agree with Nick that you should try not to have employees if you can get people to work as independent contractors. You should be able to find an IC agreement online somewhere. I'm not saying that they're any good. I'm just saying that you can find them. Try lect law....

That said, you may be able to get ppl to write for you for free. Offer ads for articles or some other enticement... Just a thought...

Hope that helps. Let me know if you have any other questions...

Deena
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Any opinions are offered without knowledge of the specific law of your jurisdiction and with only the limited information provided in your post. No advice given here should be reasonably relied upon by you or any third party without consulting an attorney who is aware of all of the facts and law surrounding your situation. Any advice given here is not intended to create an attorney-client relationship in any way.

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Old 26th July 2008, 12:28 PM   #4
skullp
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Default Thanks so far

Thanks so far for all your help you guys have been really helpful!!!

do have to form a company even tho its a little service?

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