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Online Business Guide
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How to get your online business legally set up

To get started you will need to decide what type of business structure suits you best. Here are some examples:

•        Individual/Sole Proprietorship – You simply own a business in your own name and have total control over it. The business is
considered an asset like your house or your car.
•        Limited Liability Company (LLC) – LLC’s are often a good choice because it combines the limited liability features of having a
company and also has the tax benefits of being a individual or partnership.
•        Partnerships – More than one person owns the business. Partners are “jointly and severally” liable for partnership debts. That means
if your partner owes me money, I can call upon you to repay me and you have to seek recovery of the funds from your partner.
•        Company – A company is a separate structure whose owners own shares in it. The company is treated like a “virtual person” for
commercial purposes. Some of the advantages of this is the owners generally are not liable for the company’s debts so their personal assets
are protected (eg. if your business flops, they can’t take you house). The disadvantages are that there is relative inflexibility with the
distribution of income and you don’t have access to some tax benefits.

•        Business Names
If you will not be using your own name as your business name such as “John Smith - Auto Repair” and instead using a fictitious name like
“AutoFixit” you will need to register a business name (also known DBA). This will ensure that no one else can legally use your business name.

•        Your Business Bank Account
I highly recommend that you get a bank account that you will only use for business purchases. Most banks will require that you have registered
a business name before they allow you to open an account under a fictitious name.
The advantages of having a separate bank account for your business is that you know exactly how much you are making, you can easily pay
yourself wages to your personal account and when tax time comes around, you can hand your accountant your bank statement which makes
things alot easier.

Deposit all your income (especially cash) into your business bank account so it serves as documentation of your income. Also pay all your bills
and expenses though this account. It makes things easier at tax time.

•        For more information in getting setup check out these sites:
http://www.sba.gov/smallbusinessplanner/
http://www.bizfilings.com/index.asp

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