Starting a "real" business

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HanClinto
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Starting a "real" business

Postby HanClinto » Wed Jan 20, 2010 11:25 pm

Well, the day has come.

Some people want to give me money, and I need a way to take it.

How do I go about legally accepting such funds?

I'm guessing I need to register as a business somehow, but in Indiana, it's not required for Sole Proprieterships. SP's aren't great, because you assume personal liability for your business (as opposed to something like an LLC), but they're easy and convenient because I can file all of the taxes as personal income.

But I can't figure out how to do a DBA in Indiana as an SP.

Has anyone started their own tax-compliant business before? Any resources you'd recommend, or things that helped you get off the ground?

--clint
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Mike
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Re: Starting a "real" business

Postby Mike » Thu Jan 21, 2010 3:29 am

HanClinto wrote: Has anyone started their own tax-compliant business before? Any resources you'd recommend, or things that helped you get off the ground?
--clint
A friend of mine has - ever gone a couple of years. Although he's looking for work again - he went long enough to deal with the whole taxes thing

he said
Jamie wrote: If it's small money (only a few hundred). Just open a bank account for the company and accept funds as a DBA (Doing Business As). It's just you making money, like any other employment. The government does not care about the small stuff. But hey, I'm not an expert on local Indiana laws of course.
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Re: Starting a "real" business

Postby samw3 » Thu Jan 21, 2010 10:54 am

Yeah, it really is a per state thing. Here in Georgia, I only had to register the DBA with my local city, and get a business license. It was $32.
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Re: Starting a "real" business

Postby Mene-Mene » Thu Jan 21, 2010 11:37 am

Well I haven't done it yet, but I've done a lot of research and put a significant amount of interest in it... One resource I would recommend is, http://www.amazon.com/Rich-Dad-Advisors ... 31&sr=8-39

It talks about the difference between the business types and even flat out points out why some stuff isn't good.

For example a General Partnership. Not only are you personally liable for your mistakes, but you're liable for your partner's mistakes.

It also talks about other resources which I would recommend is to take a look at the other resources.
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HanClinto
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Re: Starting a "real" business

Postby HanClinto » Thu Jan 21, 2010 12:00 pm

Thanks for the advice, everyone!
samw3 wrote:Here in Georgia, I only had to register the DBA with my local city, and get a business license. It was $32.
Where did you go to do this? City hall?

--clint
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Re: Starting a "real" business

Postby samw3 » Thu Jan 21, 2010 12:40 pm

HanClinto wrote:Where did you go to do this? City hall?
Yup, the city clerk.
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Re: Starting a "real" business

Postby JeTSpice » Thu Jan 21, 2010 5:53 pm

huh, my post didn't post.

2 weeks ago, i got a business account, with myself as the person in charge of it. the banker was concerned about transactions of 10,000, and wire transfers to/from other countries. as far as taxes and stuff, i've always just used my ss#. if employees or large investments come into the mix, i believe that's the time to investigate llc and stuff.
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Re: Starting a "real" business

Postby samw3 » Thu Jan 21, 2010 7:26 pm

Good point JeT. P1XL did open a business bank account too. It also helps to keep the tax deduction records separate.
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Re: Starting a "real" business

Postby Exodus » Fri Jan 22, 2010 7:42 am

I thought you were already an official business, Clint? ;o
Anyway, I did everything online and got my LLC made official in a matter of days. I had to have a business lawyer verify everything and send it up to Tallahassee to be stamped for approval and all that.

This is the site I went through: http://amerilawyer.com/
May parents used the same site, as well.
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Re: Starting a "real" business

Postby HanClinto » Fri Jan 22, 2010 8:05 am

Neat site -- thanks, Rebecca!

Sadly, it doesn't look like they offer packages for Indiana? :(

Out of curiosity, can I ask how much all of their services end up costing you?

--clint
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Re: Starting a "real" business

Postby Exodus » Fri Jan 22, 2010 1:51 pm

It cost me about $160 for everything. You even get one of those official 'seal' puncher things with your LLC company info on it LOL. I haven't found any use for that yet, given the type of business I have, though. When you file your annual reports (which is required for all businesses), you also have to pay $80, though this price might vary by state.
Amerilawyer (Spiegel & Utera) may have a sister site or something that covers Indiana. Give them a call and see what options are available for you! :)
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Re: Starting a "real" business

Postby bugala » Sat Jan 23, 2010 6:31 pm

Although this applies to Finland Companys, i believe they are somewhat similar everywhere in the world.

So short description about different company versions in Finland and benefits especially to your situation.

First is PROFESSION:

No actual company, you just sell your skills, ie. Making games. Typical choice to for example Massagers. This is slightest version of business. No actual book keeping, just tell tax officer yearly income and deductions.

Then is WORKING TITLE:

This is first one that actually is company. Your account and companys account are one and same thing. Not so tight book keeping as in others, and you can make deals to your company and even sell your company and the contracts with it if you so wish.

KOMMANDIITTI COMPANY:

In this form of company there are at least two foudners. 1 Who actually runs the business, and 1 who i s so called silent partner. He funds but doens nothing else.

So this is one of the options that could work for you. Idea is that those silent partners give money for you to put your business up, and you make a deal in way that they get for example 10 percent of the profits yearly from that on.

But other than that, they have no power on how you run that business or anything considering it. You have all the power to do as you wish.

Silent partners are not responsible from anything that you do, so you alone. while in charge are also only one to be blamed.


OPEN COMPANY:

I dont recommencd this one. There are at least 2 founders, and each of them has equal power on business decisions.

This means that if any of the fellow founders decides to buy airplane with companys money (and take loan for it too), you will be paying that airplane loan, despite that you knew ntohing about his decision nor even had wanted it.


STOCK COMPANY:

This my favorite and my recommendation unless that KOMMANDIITTI COMPANY suits you better. There are some misunderstandings and misfears about stock company. It is true that there are more paper work than on for example WORKING TITLE Company, buyt actually that paper work is quite easy. You just basically fill the same papers eachj year pretty much same way, just change the figures. Now one of good things in this is that because of this bureaucracy, it actually helps you yourself keep things in order too.

At end of year, you are required to do this whole year book keeping inspection by some outsider. It costs something, to me about 300 Euros a year, but good thing is, that guy who checks your book keeping, will also comment about it. So if you are doing something wrong, he will tell you and you can then still fix it.

Its not good if you are soing wrong way for 10 years and then tax office decides to inspect your company and they find out that youve been doing wrong for last 10 years, since despite that check, you are still responsible possibly.

Company and you are treated as different persons. So Company is like a person. Company must have its own account. If you make a deal, its only between company and that other party, not between you and that other party.

However, while basically idea is that company is alone liable, it is not totally true.

Say you release Michael Jackons album though your stock company. Now they come and ask you for 5 million USD since you have illgally used their album and released it.

Basically only Company bankrupts, not you, but in practice, you are most likely the CEO of that company. So basically you are responsible for that companys doings. So you might be held liable on situation like that and need to pay that 5 Million USD if company cant. but that depends on various things. Like should have you knew about that.

Say you boughtr 1 000 Websites as a package, the other side said they own all rights, and now 5 years larter you find out that one fo the 1 000 websites had font in it used, that you had no right to use.

Its pretyt obvious that even your company might be put to ppay, if it bankrpts to that, they wont be asking from you anything, since you werent supposed to do that good thorough check on website, especially since the seller in the first place was respectable.

Basically Stock companys liability goes this way.

First liable is Stock Company.

Second is CEO

Every year The Stock Companys Chairmen give freedom from liability to CEO if they are satisfied for his actions (basically chairmen should also follow whats happening with company to some extent, and if needed put it to bankruptcy etc.)

Every year Stock Holders give freedom of liability to Chairmen as final thing.

So shortly:
Chairman are responsible to stock holders (who have no liability, they just put money, and can decide on things on stock holders meetings, but they are not responsible from anything that happens in company)
CEO is responsible to Chairmen
CEO is responsible of running company and is possibly liable for anything that happens in company.

Difference between PRIVATE and PUBLIC stock company is that public ones have more rules and have minimum amount ofm oneys etc. and public ones stocks you can buy from stock markets and so on.

Oh and one many times confusing thing to people.

So for example in finland a minimum to put up Stock Company is 8 000 Euros. Now this is NOT a payment for setting up that stock company, People buy that companys stocks which cost in total 8 000 Euros, and all that money goes to Companys account. So they are fully usable to company and none of it is lost.

Its like you are selling yourself to people. That my total networth is 8 000 Euros, so if you want a piece of my future incomes, you can buy some of it. Give me 4 000 Euros, and you wil lget 50 percent of what i am able to make in future.

So someone gives me 4 000 Euros, and i use some of it to buy ice cream and aome of ti to buy pen and paper. Then i draw with that pen to paper some stick figures and start selling them. Now when i sell them for 10 000 Euros, i give you 5 000 EUros, since you bought 50 percent of me.

Thats how it works.

And of course you can sell even more stocks than just 8 000 Euros. Maybe you want to start your business with 20 000 Euros. So you sell say 100 Shares each worth 200 Euros. When you have sold them all, then your company has 20 000 Euros in its account to be used for that business.

Oh, and one more thing. Practical issue.

If you send invoice from say WORKING TITLE company, they will inspect it very thorough and it might be even trouble getting it trhough to some places since they want everything to be in order.

But when you send invoice from Stock Company, they accept it with only very little look. Since they know some outsider is anyway going to check that invoice at some point, so they dont need to check if everythings correct.


Hope these help you although they apply to Finnish companys only.

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