Legal Question in Business Law in California

Re: Question about internet business

Wow, where should I begin!? Is an S-Corp the right entity for you? Have you integrated legal language and website design considerations? What legal agreements do you need with resellers? What is your exit strategy if things don't go according to plan? That's just to start. Perhaps you already have a business plan that addresses many of these issues and a short posting simply doesn't reflect your level of preparation to start a new business. If not, my office or another attorney can be a valuable component to your start-up team.

Re: Question about internet business

Here are a few thoughts; this is not a list of things to consider but is a partial list of where to get lists and how to make a to-do list:

1. One does not form an S-corporation or a C-corporation. One merely forms a corporation. Then, after it is formed, it elects to become an S-corporation by filing an IRS Form 2553. This is essentially an election by a qualified corporation to be taxed as a partnership.

2. I recommend buying and reading one or more of the large-format paperback self-help books on how to start and run your own small business. You might also want specialized books on e-commerce, or accounting, or some other area, depending on your own prior experience level.

3. Obtain and study Amazon's policies and rules.

4. Get to know professionals that can help you, such as a banker and bank account, business insurance agent or broker, a bookkeeper or accountant (especially useful to talk to a full CPA regarding start-up matters), and of course, a business lawyer.

5. Don't be tempted to form a Nevada or other out-of-California corporation if you live in California and will operate the business here.

6. New business checklists can be found on the Secretary of State's Web site www.ss.ca.gov and then go to the business portal.

7. Do not commingle corporate money or other assets with personal.

8. Keep complete and accurate records starting with the capitalization of the corporation by issuing stock to yourself in exchange for money, computer equipment, etc. that will belong to the corporation.

9. Get a taxpayer ID number from the IRS.

10. If you will have employees, register with the Calif. EDD.

11. Talk to everyone you know that has ever started a small business and find out what they did that worked, and what they did that flopped. It won't necessarily be the same for you, but everyone's story will add to your wisdom.