Legal Question in Business Law in California
Small internet business startup plan
Hi,
I will launch a website in August as the first step of an internet business plan. However, I will not have any income from the business in 2006.
Can I wait until 2007 to form a Sole Proprietorship or LLC? More specifically, is there any need to get a local city business license (city of Sunnyvale) while I have zero income? And is there any need to file an FBN while I have zero income?
If I do need to at least form a sole proprietorship now, what can I do to make converting to an LLC in 2007 as easy as possible?
Thank you.
2 Answers from Attorneys
Re: Small internet business startup plan
You don't have to "form" a sole proprietorship. Among the reasons you might want to select a more protected form of business now is, you might do something that would render you personally liable even though you don't have income yet. I urge you to sit down with a lawyer there in Sunnyvale and discuss your concerns.
Re: Small internet business startup plan
When you speak of "forming" a sole proprietorship, I assume you mean getting a city business license for it, and perhaps registering a fictitious business name with the county. Otherwise, proprietorships aren't "formed;" they simply come into being.
My guess is that an activity that doesn't have revenues would not be considered a business by the City of Sunnyvale, but business-license theories and practices may vary from city to city, so the best advice is to go to City Hall and ask a supervisor at the license bureau.
The FBN registration should be done before you start using the name in dealing with the public.
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