Questions for you business owners.

Hey there. I’m trying to figure out the best approach forming a company for online business. Any thoughts on my questions?

Do you make a new company (LLC, S-Corp) for each website, or are they all under one company? What went into that decision (legal, taxes)?

How did you fund your first company? Did you start it as an individual and then as it grew you made the switch? Were there any legal problems in using your own money to fund it? -- Like using a personal credit card for business. Lastly, do you draw a salary from your companies or do you buy everything in the company’s name?

Thanks for you help!

 

Well, I am not sure about the others but I have only one company and have everything under that one company. There is no hard and fast rule over that. One company is probably easier to manage. As for taxes, if they are under one roof, you can offset one website losses against the other's profit.

I fund my business with my own money. There is no issues with using your own money to fund your business. You however just need to make the distinction that if you are running a corporation, there is that veil of separation between you (the shareholder) and you (the employee). You can use your personal credit card to pay for the business and just ensure that the money used is 'loan to the company'.

You can draw a constant salary and if you do buy everything using the company's name, make sure that in your accounts you separate what is business expenses and what is personal expenses. If you pay your personal expenses through your corporate account, factor that as part of your 'salary'.

 

damn, you covered everything!
rep left for a great answer

 

For first timers I recommend going LLC, that way you have some wiggle room on your accounting mistakes.

 

Go LLC like l3vi said....that way if you also run into any legal issues, you are covered...I personally don't have a company, but a friend of mine has close to 300 sites all covered under his LLC...having that has saved him time and hassles when dealing with legal issues...

 

Thanks guys. I'm speaking with my accountant next week so I'll run this by him too.

 

does anyone have an LLC "guides" that will walk us thru the exact process?

 

I developed an LLC in 2002 that covers all of my business dealings. Every web site, blog, advertising, you name it falls underneath my company name.

Concerning LLC guides, visit NOLO for some great information. Feel free to green rep me because I am a nice guy too!

 

http://www.bizfilings.com/products/llc.asp offers incorporation services and their website is a wealth of information about the various business structure.

 

There are only three reasons I can think of off the top of my head to run different corporations for different sites:

1.) Liability segregation. If you have any particular ventures that are more likely than others to subject you to a lawsuit I would recommend holding them in a seperate corporation. This way if that corp gets sued it won't bankrupt your other business ventures. Also if you have one site or venture that makes the majority of your income you may want to seperate it from your others for the same purpose.

2.) The name doesn't fit. If you name a corp for a specific business type (consulting, service, or say blogging or media) then try to get into something unrelated the name may seem unprofessional or unfitting.

3.) Partnerships. If you have partners for specific sites but not others it could be a good idea to set up a separate corp.

 

Make a general name, such as "XXX internet" or "XXX media" and file the LLC. Then do a DBA for each site. Good luck.