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selling do i need to be a company?

Discussion in 'Business & Tax Advice' started by kolec94, Jan 12, 2014.

  1. kolec94

    kolec94 Registered Member

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    Say i do have a product which is a ebook or software do i need to legally register as a business or llc to to take sales?
     
  2. AquaticGamer

    AquaticGamer Jr. VIP Jr. VIP

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  3. webhostingproviders

    webhostingproviders Jr. VIP Jr. VIP Premium Member

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    No its not totally necessary.
     
  4. kolec94

    kolec94 Registered Member

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    so i would think i would have to keep sales records and would it be difficult to declare as your only income?
     
  5. tony_d

    tony_d Elite Member

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    Your customers (whether they're individuals or businesses) couldn't care less whether they buy from a company or an individual. Indeed, most don't even care if you're registered business - all they care about is what you can do for them! So, tune in to what they care about, and focus on delivering :)
     
  6. kolec94

    kolec94 Registered Member

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    im more worried about taxes and irs then the customers
    and on that note could i sell youtube services and declare that as a income?
     
  7. Typlo

    Typlo Jr. VIP Jr. VIP Premium Member

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    You don't need to be a registered company.

    As an individual, you are a sole proprietor. You must declare your income on the correct tax form, the IRS doesn't care what you are selling as long as it isn't illegal. You don't need to say you sold youtube services. You can say Advertising Services. Just keep a record of everything and then have an accountant at H&R Block do your taxes for you or get Turbo Tax.

    The main reason you would form a company is to protect yourself. When you form a company, you get a second legal identity, who has liabilities separate from you personally (if you don't use business funds for personal items).
     
  8. kolec94

    kolec94 Registered Member

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    how as a individual would i make sales safely? (paypal charge back)
     
  9. Typlo

    Typlo Jr. VIP Jr. VIP Premium Member

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    You can't. There is always a chargeback risk. Being a company wouldn't change that.

    Best you can do is use a service like maxmind with a shopping cart to filter for fraud. Even then you won't be 100% safe. It's unfortunately part of selling online, especially if you are selling services and not physical goods.
     
  10. kolec94

    kolec94 Registered Member

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    ok then at what point do i declare it as a income for tax purposes(as in amount of money made )
     
  11. kolec94

    kolec94 Registered Member

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    i have another question if you dont mind if i sell software could i sell it as subscription to the forum not as payment for the software?
     
  12. boccas323

    boccas323 Newbie

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    If you incorporate a LLC, you will be charged income tax (probably higher rate) but have limited liability towards any liabilities you may enter. It may also be the case (depending on the laws of your jurisdiction) that you would need to set-up an LLC if you reach a certain level of sales/profit per annum.

    Best solution is to check with a local accountant which can guide you better.
     
  13. paypalbudget

    paypalbudget Newbie

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    It's recommended if you make a license, that way you can pay less tax
     
  14. Veyron

    Veyron BANNED BANNED

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    While operating as a company increases your reputability, as long as you have a PayPal account or a way of accepting payments you don't need to be a legally registered business.