Ask HN: What is legally required to run a small service-based web application? • Hacker News Board

Re: Ask HN: What is legally required to run a small service-based web application?

#61

Post by joeag » Thu, Feb 03, 2011, 4:50 AM UTC

bradleyland wrote: post #52

larrik wrote: post #47

Earlier quoted context omitted.

I'm not a lawyer, but I've been lead to believe that in the US at least, if you are the only member of your company (which I believe Patrick is), then no corporate structure is going to to protect you from liability. I think even with only 2 people it's a bit iffy (especially if the other person is your spouse). If you are by yourself, Sole Proprietor is easier and simpler for taxes and the like. LLC is more complex…

As far as simplicity goes, consider this. As a sole proprietor, you must file a Schedule C with the IRS if you intend to take any deductions. Filing a Schedule C also dramatically increases your chances of an audit. Also, when you are audited, the audit covers all of your personal finances. If my corporation is audited, the audit does not automatically extend to my personal finances. Having a corporation actually sim…

You may also end up with schedule C income anyway if your legal entity provides you with a dividend or other payment outside your regular salary, and you are likely to want to do that anyway because non-salary distributions are not subject to social security taxes - saves you 15%.

Re: Ask HN: What is legally required to run a small service-based web application?

#62

Post by tptacek » Sat, Feb 05, 2011, 10:49 PM UTC

euroclydon wrote: post #42

mgkimsal wrote: post #27

Where abouts in NC are you? I'm in Raleigh, and would be happy to meet up and show you some of how I'm setup. I charge yearly subscriptions for digital content, as well as one-off sales. I use both GC and PP for checking out - no sense in limiting yourself too much, imo. I have sales from around the world, and GC and PP have covered the overwhelming majority of those sales. EDIT: Ahh... you're in Durham. I've got to…

Hey, I live in Durham and I'm incorporated as an S-Corp, which can have some advantages (just don't let tptacek hear you talking about them). I'm friends with your boss at TransLoc too. It would be nice to meet up sometime and talk shop. joshua.pearce at that google mail service.

There's nothing wrong with S-Corps! They're superior in a lot of ways to LLC's. The only things I get ranty about are: (1) not incorporating at all, and (2) using S-Corps to dodge FICA taxes.

Re: Ask HN: What is legally required to run a small service-based web application?

#63

Post by eunomad » Sat, Feb 12, 2011, 1:27 PM UTC

I agree that you should consider creating an S-corp.

I live in Europe and suggest using paypal if you are targeting Europeans. Many Europeans do not have credit cards and need to do bank transfers to pay for things online which is why they use paypal.