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

[martin]

thank you for that link Lee, it was exceptionally helpful! as well I will research more on that , thank you

[chadknowslaw]

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.

[desslock]

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

[gaybucks_chip]

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.

[martin]

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