Question by GRaz: What business structure is best if i want to start a web design business and market prodcuts online?
I want to start a web design business and marketing products online. I would be selling digital products internationally and designing web sites for companies and individuals. What kind of business structure (sole proprietorship, incorporated…etc) would suit both business? Which one would protect me the most?
Answer by TekCraze
If you are looking for protetction you will need to set up a corporation. This is basically a seperate legal entity which files its own taxes and can sue or be sued by other individuals or corporations.
A corporation does add cost: initial set up, you will need a corporate address (usually not a PO box), annual record keeping, reporting, and taxes. When done correctly it will protect your personal assets from being taken in the event the corporation is sucessfully sued.
A word of caution in setting the corporation up. There are process and procedures you need to adhere to to ensure your assets are properly protected behind the corporation.
These include (but are not limited to) personal guarantees, maintaining your minutes book, bylaws, proper shareholder designations, etc. If you do not set the corporation up properly you could be inadequately protected.
The safest way (but most expensive) is to see a lawyer to set something up but you can use your own discretion.
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