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.


Asked on 8/01/06, 1:27 am

2 Answers from Attorneys

Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

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.

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Answered on 8/01/06, 3:22 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

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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Answered on 8/01/06, 12:20 pm


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