Legal Question in Business Law in New York

Re: Online Business

You don't need to register a company to do anything (generally speaking). You are likely, however, to want the liabilitiy limitations that the corporate form (and some partnership forms) offer their owners/members.

That said, business is complicated business -- no pun intended -- and you should consult both an attorney and an accountant prior to forming the company or starting business or whatever: there are many, many questions you need to ask (and answer) for yourself -- with the guidance of such professionals -- before you will be able to determine the proper form for your undertaking and the proper way to position it for tax purposes. If you'd like to discuss this further, please don't hesitate to get in touch.

Re: Online Business

In general, the answer is yes, you do need to register your company "as if" it were a real company. There is no question it is a real company.

You will probably not have to register with all states of the US for tax purposes. Most often, you only need to register in the state where your offices are located, but a little more information is required to make that determination.

If you are starting a new business it is very highly advisable that you consult an attorney. I am available to discuss this if you want at (212) 695-6400.

Best of luck.

Asi Kirmayer

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The information above is not legal advice and no attorney client privilege is created thereby. You may not substitute the above information for obtaining proper legal advice in your jurisdiction.

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Re: Online Business

To engage in business, do not have to register with anyone unless you are engaging in a particular type of business that requires special registration such as the transportation of hazardous materials. However, to avoid personal liability, you should conduct business either as a corporation or as a limited liability company. Selecting one of these forms of business frequently allows for certain tax benefits that can be more easily demonstrated as compared to conducting business under your own personal name. If you were to conduct business under your own personal name, your personal Social Security number would also be the tax identification number for your business. Our office handles business formation and you can contact us at (212) 267-7000 to arrange for an appointment.

Re: Online Business

You only need to select one jurisdiction (either in one of the states of the U.S. or, for e-commerce, possibly in a foreign country if there are advantages to that) in which to form a company (say, a corporation ), assuming you do not have physical presence or other significant commercial activity in other places (in which case you may have to make additional filings "to qualify" to do business). There, the corporate income will be taxed on the state and federal levels assuming your company has no other tax presence elsewhere. Rates of corporate income (franchise) tax vary from one state to another (a few have no state income tax) and certain cities (such as NYC) impose their own corporate taxes so a lot of tax planning will be involved in your decision to set up shop. If you form a limited liability company, you could avoid double-taxation and simply elect to be taxed only once as a general partnership on the level of the company's members. At a minimum, you will need a federal tax id number (EIN); you may also need to make addiional tax-related filings after your company is formed.

As far as sales tax or other taxes on online retail transations, this is a "hot" issue in U.S. law and should also be carefully considered. A moratorium on Internet sales taxes has recently expired so that states could theoretically start taxing some of these transactions, though as far as I have heard nothing yet happened in that direction.

Finally, apart from tax issues, you will need to consider how your proposed host jurisdiction regulates e-commerce (most Internet-related laws are federal in nature but there are exceptions) among other factors to take into account.

Let me know if you need legal advice in connection with your setting up of a company and initial organizational and operational matters.

Please note that this posting is of general informational nature, is not legal advice and should not be relied upon as such.