Legal issues regarding a Internet Start Up

Hi there guys!

So i'm the cofounder of a internet startup, which use paypal's recurring billing system as its payment system. We arent live yet, but one thing that is concerning me are the legal issues. I live in Brazil, and the taxes down here are jus' CRAZY as hell! They're just ''too DAMN HIGH', like the rents in New York ! LOL.. anyway...

I've some questions:

1) Do i need to have it as a concern right now? I mean.. do we need to register legaly the company in its beginning? Can i make my money with no concerns using paypal?

2) Paypal requests company registration in order to use its recurring billing system?

3) Once the money is in Paypal, can i sent it anywhere in the world?

4) It would be good to register my company in other country, once we get decent revenue? (since my country's taxes are extremely high for companys). Yep, i'm talking about off shore incorporation ; )

It would be great if you guys could give me answrs for these questions. The legal issues regarding my start up are jus taking my nights of sleep away from me! I jus cant sleep at night because of that!

Thanks in advance!

G.

That depends on how strict are the rules in your country. In my country, there are lakhs of unregistered companies operating and majority of them hide the actual earnings to save taxes.

Thnks for your response mate! how the hide themselves? Are they registered?

Hello, You have brought up a excellent question and allot of us have to go through this
just to get going. Let me point out some things to you and then you can decide from
there. In my opinion you should continue with operations and get some nice Cash Flow
coming in. But once you have enough money immediately set up a offshore company
and bank account plus merchant account. It is not to expensive. Actually you could get
a package like this in Panama for a average of 1800 to 2500 USD. So just run your
business and make some cash...Then transfer yourself offshore. A offshore package like
I am talking about has a Merchant Account to. So basically your money would never touch
Brazil Please note...I do not live in Brazil nor have I ever been there. So you need to use
your discretion in this. But I know it allot of countries you can do this under the radar.

So Good Luck to you and your new Business !

Great. Thank you.

This is what i was thinking about. Yet, my questions did not get answered.

So please, could somebody give me answers for them? Check below:

1) Do i need to have it as a concern right now? I mean.. do we need to register legaly the company in its beginning? Can i make my money with no concerns using paypal?

2) Paypal requests company registration in order to use its recurring billing system?

3) Once the money is in Paypal, can i sent it anywhere in the world?

4) It would be good to register my company in other country, once we get decent revenue? (since my country's taxes are extremely high for companys). Yep, i'm talking about off shore incorporation ; )

Those questions are taking away my nights of sleep, guys ;(

Thank you all in advance!

i dont know how much pain will paypal give you for being in brazil but over here in US changing business name in it is easy and allowed - Ive done it also you cna tranfer it to any bank account you have - doesnt matter i it is business o rnot - they dont care but make sure you can answer the tax people later on...

Do not use paypal subscription payment method. If the limit / ban your account (and they sure can do anytime) you will loose your money (on hold for 6 months) AND all your subscribers (ouch!).

D.

if you know any genuine money exchangers,then it would help you lot.Google money exchangers you get many.I use to have have money exhcnager in past.He use to exchange epass to paypal for me.I have heard good about this guys http://www.emoney-door.com/

Thank you all!

The thing is that the more that you guys talk, the more i get confused! Lol.

So, How this limit thing works on Paypal? How the hell they can limit my account? I jus' dont get it guy ; (

Yet, my questions did not get answred... can i operate, using paypal, with out having my company legaly registrated? What would be the alternatives if paypal is such a bad option for me?

Thanks in advance!

I know in the US you can convert your personal account to business and have subscriptions. Just login and try it. You will need to verify your bank account and possible other things.

The main reason you want to incorporate is to protect yourself from liability. Operating as partners exposes you/spouse/etc personally.

If you aren't doing anything bad in paypals eyes you are fine using them. If you are in a business that gets too many chargebacks, and refunds they will look closer at you. For a professional business you only want paypal as an optional payment. You should get a real merchant account and ssl cert so you keep their card info and can move to different banks as necessary.

Wow...thank you all for your responses! Things are starting to get clear to this noob right here,lol

In Fact... i dont think you need to have a business paypal account to have subscriptions. As far as i saw in Paypal's web site, you can use their recurring billing system having a Premier account. So, looking in that way, no business registration is needed. The only thing that changes are the fees per transaction charged by PayPal, when you step your Basic account up to Premier - or am i rong?

The thing is that i really want to register my business and make everything right. The problem is that it's pretty expensive to set up a registered business down here in Brazil. And once you set things up right, you get exposed to a whole range of very high taxes. The Governement really suck all your money up... they are all a bunch of bitches.

I'm on Start Up Mode, so i really cant afford registrate my business right now. All my budget its dedicated to the development of my product and our website.

So, my goal is to set my subscription business up, with no legal registration. Then, after i start to make revenue, the first thing that i'll do is to register the business, but I WANT TO INCORPORATE IT OFFSHORE, to avoid the high taxes. I'm really thinking about Panama. Heard great things about there.

So... this goal of mine can be reached using Paypal as the payment system for my business? In fact, can i REACH this goal?

Oh I would like to add something in About paypal. The not only can limit your account...
I personally have the pleasure of finding out they can withdraw money from your
Bank account that is attached to it to pay the fees and Returns or for any other reason.

Paypal really sucks.

Great, Thanks for your response!


So, what would be a good choice for my business, considering the fact that i need to start things up with no registration or merchant bank account?

Guys, i'm REALLY glad, because you people are trying to help me out the best you can. I really appreciate it. However, the main question still unanswered: CAN I OPERATE WITH OUT REGISTRATION, USING A NORMAL BANK ACCOUNT, TILL I MAKE ENOUGHT REVENUE TO MAKE A OFFSHORE INCORPORATION OF MY BUSINESS?

PS: hey Redclover, i sent you a PM.

Thanks everybody for your help!

And we have a second main question up here: what would be the best choice for my subscription business model, when it comes to the receive of my clients monthly payments? I already got the fact that PayPal sucks. So..what would be a good alternative, in the context of my start up?

As always, thanks : )

G.O.BNetwork said:

And we have a second main question up here: what would be the best choice for my subscription business model, when it comes to the receive of my clients monthly payments? I already got the fact that PayPal sucks. So..what would be a good alternative, in the context of my start up?

As always, thanks : )

Click to expand...

you should carefully check about merchant accounts as that is the best way u can handle monthly subscriptions. If i were you, i would not care about taxes for now and concentrate on my business. You can go to a local bank in brazil and ask for merchant account setup. You pay taxes for now but you start very stable and sleep comfortable. Once u start earning more u can investigate offshore stuff. That is my suggestion imho.
Good luck

1/ Worry about earning money before you worry about paying the tax.
2/ You dont really say how much money we are talking about here(i hope its a lot !) but you can always upgrade a personal paypay account
3/ you should have as many paypal accounts as possible and bring money in, in several streams rather than one big lump.
4/ you need to be able get money from lots of different sources. Cheque,Draft, Transfer, Swift,Escrow, WU...do not rely on paypal solely
5/ You are in Brasil , do you have any family or other links to Portugal (maybe second citizenship ?) if you could keep money outside of Brasil that would be good
6/ No matter what country you pay your taxes in, you will only pay taxes on profits.. Make sure you are able to show that gross profits are being re-invested into the company...A good accountant will show you that most start ups should not be earning any taxable profit for their first few years
7/ Whatever you do, DO NOT look to set up an offshore arrangement until you are a proper corporation with an accountant who has the connections to make it happen legitimately, otherwise you might as well send a letter to the government to telling them you are a tax dodger.

NB/ I am not an internet baron but I have imported/exported worldwide for 20+ years

OK GUYS! PROBLEM SOLVED! I found a guy who works at PayPal Brazil and he explained everything to me. I can, indeed, begin to operate and make good money with out legal registration. Then, after i begin to make decent revenue, i will registrate everything right.

Thank you all for your participation, excelent insights and patience!

I wish sucess to everybody in this forum. You're jus' great!


Cheers,

G.

dbyrn said:

Do not use paypal subscription payment method. If the limit / ban your account (and they sure can do anytime) you will loose your money (on hold for 6 months) AND all your subscribers (ouch!).

D.

Click to expand...

What do you recommend for subscription paid option if not using paypal? you have any recommendation?

Id be interested in finding a subscripton payment processor as well - its a nuisance how many people open claims when you know they registered and now want the month refunded ...