Internet businesses and incorporation

[melsachs]

Internet businesses corporation best type to start with without knowing profits? I have read about the various types of corporations, but am stalled. Not sure the best type of corporation to start, because I don't want to be stuck paying taxes/fees if I don't turn a profit.

1. When does an internet business have to incorporate? At what point in the process...best to incorporate before starting? What did MJ do?

2. I read that CA c and s corporations are eligible for a waiver of this $800 tax in its first year if it hasn?t reached a minimum income level, whereas LLCs are not. Better to go this route?

Thank you!!

 

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[Daniel Jameson]

Incorporating allows the business owner(s) to separate and protect their personal assets in case of a lawsuit or claims against a business entity. In an properly managed and structured company, owners have limited liability for outstanding business debts and obligations. This is one of the primary benefits to incorporating. The process needed to form either a corporation or an LLC is similar to a partnership, without the need for excessive paperwork and fees.

There are multiple tax advantages and benefits of incorporating a small business. Typically profit and losses are “passed-through” an LLC and get reported on the personal income tax returns of the owner. However, an LLC can also elect to be taxed as a corporation. Additionally, a corporation can avoid double taxation of corporate profits and dividends by electing Sub chapter S tax status. We can do this for you.