Page 1 of 2 12 LastLast
Results 1 to 15 of 24

Thread: to incorporate or not to incorporate...that is the question

  1. #1
    martin
    Guest

    to incorporate or not to incorporate...that is the question

    Hello everyone. just a quick question here. I'm starting out in the biz, as an affiliate partner, promoting sites (free sites, gallery pages and the such.) My question is:

    As a promotions business.. would it be better for me to incorporate myself or become a sole proprietor? (considering I would only be promoting other people's sites? since the beautiful words "taxes" exist )


  2. #2
    You do realize by 'gay' I mean a man who has sex with other men?
    Join Date
    Oct 2003
    Location
    New Orleans, Louisiana.
    Posts
    21,635
    Check out this article and see which option you feel more comfortable with.

    http://forums.gaywidewebmasters.com/...ead.php?t=2178

    Personally, i'd incorporate as it offers you a little more legal protection should you ever need it

    Regards,

    Lee


  3. #3
    martin
    Guest
    thank you for that link Lee, it was exceptionally helpful! as well I will research more on that , thank you


  4. #4
    throw fundamentalists to the lions chadknowslaw's Avatar
    Join Date
    Aug 2004
    Location
    Phoenix, Arizona
    Posts
    2,149
    Do NOT go as a sole proprietor. There are so many options--an LLC can afford you the protection of a corporation but flow-through taxation like a partnership, for example. You should sit down with someone who is familiar with the entities available in your state and choose the one that best fits your situation. A sole Proprietorship is rarely the best way to go.
    Chad Belville, Esq
    Phoenix, Arizona
    www.chadknowslaw.com
    Keeping you out of trouble is easier than getting you out of trouble!


  5. #5
    desslock
    Guest
    Martin

    Where do you live, out of curiousity?

    I have an opinion on this "from the trenches" - not as a lawyer... nor as an accountant. That is, if you are starting out, and simply promoting affiliate programs, incorporating is not that big a deal. You can simply tell the affiliate programs to make out checks to your name.

    This is how I started. I pretty much asked myself if freelance writers formed a corporation, and submitted their writing to magazines. I would think that most do not.

    You don't have enployees, and you are being paid on a performance basis. Your exposure to the kinds of liability from which a corporate entity shields is minimal.

    Also in the United States now, personal income tax rates in many cases are lower then corporate income tax rates. It also depends on the state you live in. Texas happens to be one of the more expensive states to operate a corporation in... we have a corporate franchise tax.

    I really didn't want, nor could I afford, an accountant to handle that for me.

    In other words - if you are starting this as a side business.... and you are collecting $500 or $700 a month from several affiliate programs - just operate under your name or a DBA. And then declare the 1099 income on your taxes.

    [ and of course track your business expenses for deductions - like mileage, your trip to the Phoenix Forum, etc. ]

    Steve


  6. #6
    On the other hand.... You have different fingers
    Join Date
    Feb 2004
    Location
    San Francisco
    Posts
    3,548
    The taxation issues are almost a non-issue now as both S corporations and LLCs allow pass-through of income to individual shareholders so the income is taxed once at the lower individual taxation rate.

    HOWEVER, the big bugaboo is liability. Particularly in this biz, I would suggest having a corporation or LLC to at least partially shield oneself from liability is an expense worth having. It all depends on your particular intestinal fortitude and risk aversion.

    Note also that while a corporation may sheild you from personal liability, it will in no way shield you from criminal action, such as failure to maintain proper records required under 2257, having underage models on your site, that sort of thing. So ya still gotta be careful.


  7. #7
    martin
    Guest
    wow great help everyone!! I'm living in Canada actually, so the laws are a bit different, although I don't much about the laws here so I would definately have to hire a lawyer


  8. #8
    TedTrent
    Guest

    A Service Provided By...

    I run my site as a service of my photography studio. I list OOTC as a service provided by Trent Studios. When people make out checks it makes sense to them that my production company runs a promotional website.

    My accountant agrees with me on that. I'm needing to change that though because as my videos become more edgy, I feel I'm taking larger risks. I want my personal assets protected so an incorporated company requires me listing the assets of only OOTC. This ensures that if I get sued, only my business assets with OOTC can be taken. Since I also run another website that has nothing to do with OOTC, I want to protect that one.


  9. #9
    boyfisting
    Guest
    If this is your main income, you may consider incorprate since it will bring you some benefits like lower tax rate, limited liability,more deduction etc. However, it is not a free lunch. In Canada, you probably need to spend $1000-$1500 to get incorporated. Plus, according to the rules, you should be prepared for the audit. In order to incorporate, you need to find a good "business lawer". You also need a experienced accountant and someone good at book keeping. One thing for sure, if you are planning to get your own merchant account, it is almost necessay to get incorporated. (unless some offsore merchant account :uhoh: .)

    :baby:


  10. #10
    Porn Star PierreFitch.com pierrefitch's Avatar
    Join Date
    Nov 2005
    Location
    Montreal
    Posts
    553
    When you open a US Business how do you pay your taxes in canada


  11. #11
    Did someone say cocktail? steven619's Avatar
    Join Date
    Apr 2005
    Location
    San Diego / Palm Springs
    Posts
    266

    Corp or Sole?

    I grew up as a corporate CPA and the more time I spent looking that the "new" laws the less I knew.

    But there is something called "piercing the corporate veil".
    http://www.rjmintz.com/piercing-the-corporate-veil.html and others URL's.

    In summary, if you are looking only to save your ass in case of wrong doing this is NOT a great idea. They will prove that one shareholder that is the only investor, exectutive and employee is not a corporation but a shield.

    Courts will look through the "protection" and stip the corporation (veil) and you will loose anything that you were trying to protect.

    If it's a true corporation you will have multiple investors, board of directors, and all the items you need for a corporation. Miss one item and the courts will rull you as an individual acting a a sole business owner.

    So...
    Accountant and Attorney is your friend.

    The more you try to protect yourself the more $$ it will cost.

    Look at the worst case and go from there.

    Gosh..I hate this type of dread.
    But I'm sure there will be other thoughts on this topic.
    Just ask youself..."what if I'm wrong?"

    Steven
    Steven: 619-269-7442 x401
    Red Apple Media
    Hosting, Development, and video Streaming
    San Diego, CA
    Home PageFacebook


  12. #12
    On the other hand.... You have different fingers
    Join Date
    Feb 2004
    Location
    San Francisco
    Posts
    3,548
    Years ago, I had an issue where I was concerned about the corporate veil being pierced in a legal action. When I discussed it with the attorney at the time (things may have changed since then), he basically said that the only circumstances under which the corporate veil could actually be pierced is if it was pretty clear that the organization was set up specifically to shield against lawsuits, with no assets or business activity to speak of.

    In other words, a shell corporation that does absolutely nothing, has no assets, no employees/customers, etc. He said that he'd had some cases where somebody was *clearly* trying to scam people (I think it was an aluminum siding scam or something) and the assets immediately went out of the corporation to somewhere else, there was basically just a shell, and they STILL couldn't get past the corporation to the personal assets because there was at least a minimal amount of business being transacted through the corporation.

    So if you're using the corporation to legitimately conduct your business, carefully separating personal and business expenses and not paying your personal expenses with the business funds and vice-versa, and basically operating like a business, the advice I got was that you should have no problem.

    Of course, IANAL and your mileage may vary


  13. #13
    Richard
    Guest
    Not only do you get legal protection from your personal assets.....I have found that you can save more on taxes as well. Hope this helps.


  14. #14
    abostonboy
    Guest
    You need to incorparate no matter what business you are in. Even non porn.

    Here's an example-

    You sell a blender on Ebay and don't give a warning with the blender that it may hurt a child. A child makes a smoothies of his fingers. The person who bought the blender couldsue you. Of course you could goto manufacturer and say its their fault. But you get the point.

    If you do not have some company and have assets they are fair game.

    Just my opinion.


  15. #15
    On the other hand.... You have different fingers
    Join Date
    Feb 2004
    Location
    San Francisco
    Posts
    3,548
    I think people are confused. Several people have mentioned that you must incorporate to be shielded from liability, but this isn't true. An LLC provides the same liability protection that a corporation does... that's why the LLC was created in the 80s, to provide the liability shielding without the tax burden of a corporation. Hence the name "LIMITED LIABILITY company."


Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •