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Running A Legal Host

H

HostBug

New Member
Hello,

I want to start a paid hosting part of my web host but I know that there is a huge legal aspect to that. I was wondering if you know the process for registering your company because I am not 100% sure and I don't want to be like those hosts who aren't really legal and pretend to be.

Thanks!
 
Paper Clip Host said:
Hello,

I want to start a paid hosting part of my web host but I know that there is a huge legal aspect to that. I was wondering if you know the process for registering your company because I am not 100% sure and I don't want to be like those hosts who aren't really legal and pretend to be.

Thanks!
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Yeah, a lot of that depends on where you're located at.

To get started, are you in the US? If so, what state? Also, are you 18 years of age or older?
 
First, you'll need fill out your incorporating articles with your state's Secretary of State division here: http://www.sec.state.ma.us/cor/coridx.htm
Under the "business filings" column, choose to create a new entity and follow the directions.

Keep in mind, that you'll also need to log in with your state's SOS division to file your annual reports.

After completing that, you'll have to register with your state's department of revenue and obtain a TID (tax ID):
http://www.mass.gov/?pageID=dorconstituent&L=2&L0=Home&L1=Businesses&sid=Ador
You'll also more than likely have to come back here on a monthly basis and file your AR-80 (or equivalent).

After filing with your state's business entity division and the dept of revenue, you'll need to register with the IRS and obtain an TIN (tax ID number):
http://www.irs.gov/businesses/small/international/article/0,,id=96696,00.html

I won't get into it here, but you'll have to complete your tax requirements as they determine you need to, more than likely it will be annually, just as you do your personal income tax.
The IRS is also your resource of W-4 information when hiring employees and W2s for wage earnings that you'll have to disburse by January 31st each year.

I can't stress enough the importance of keeping ALL of your documents and paperwork together and safe. Practice good records keeping and accounting from the start or else it'll come back to bite you in the ---.
 
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Deeplist, isn't it perfectly valid to run a host as a sole proprietorship through Schedule C on the 1040? Yes, there are still some DBA forms etc to file, but it may be a shade easier to administer without having to learn the corporate forms.
 
TaoPhoenix said:
Deeplist, isn't it perfectly valid to run a host as a sole proprietorship through Schedule C on the 1040? Yes, there are still some DBA forms etc to file, but it may be a shade easier to administer without having to learn the corporate forms.
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Yes, it can be done that way. The laws regarding registering your Sole Proprietorship vary from state to state. Some require no registration at all. Some require that it be registered with the clerk at your county courthouse. And some states require that it be registered with the state's SOS just like a corporation. With a sole proprietorship, all of your company's income is reported on your personal income taxes at the end of the year. The problem with this is that if your "company" gets sued, it's your --- on a platter. Period. There is no protectional barrier between you and the company. I personally do not suggest running a web host as a sole proprietorship for this exact reason. In addition, you can NOT do business under anything OTHER than your personal name, unless you file for a fictitious business name.
 
Agree wholeheartedly with deeplist. Running any company as a sole proprietorship isn't necessarily the best thing for security of your assets. If you have a house, car, bank account with a reasonable amount of money in it, etc., even more of a reason for creating a LLC or full-blown C or S corp.
 
using offshore providers or servers it can be less complicated. Start business, and then, as soon as you are ready, convert it into legal with all data you could have got.
 
SiberForum said:
using offshore providers or servers it can be less complicated. Start business, and then, as soon as you are ready, convert it into legal with all data you could have got.
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So what you're actually advocating is to start an illegal business, host all of the content offshore, and then worry about getting things kosher later on? Is that how you run your business? If so, then you fail.

As long as you're making money and you reside in the US, you need to report the income that you made. Period. It doesn't matter whether your equipment is offshore or not.
 
SiberForum said:
using offshore providers or servers it can be less complicated. Start business, and then, as soon as you are ready, convert it into legal with all data you could have got.
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It might be less complicated, but I'm sure they'll wonder where all the clients suddenly came from. Doing things properly from the start will give you less headaches.
 
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