Starting a Hosting Business - Legal Requirements

[BlItZ]

Hello,

We are starting an online web hosting company, along with the masses of other hosts, but our company is different (I am sure you heard that before :D).

But, I have a few questions, which I am wondering about.

What are all of the legal issues that we must comply with to start?

Does our company have to pay taxes, since our company is only offering web hosting, domain registration, and perhaps web design services?

Do we have to register our DBA with our local Court office?

Are there ANY other legal issues we must take care of before starting the business?

Also, if the owner is under 18, but has a partner that is over 45 (LOL), does the company still have to pay taxes and comply with other legal requirements? If so, what are they legal requirements?

Also, as long as the partner (of age) is on business papers (CC Processor, DBA form, etc.) is it considered a legit business?

Thank you for all of your time, and please don't flame this thread for asking these questions.

[Living Media]

You're asking about a lot of issues. I would strongly suggest that you consult with your local chamber of commerce, or better an accountant or lawyer, before you open your doors.

The elder partner will have to, in most cases, be the one who signs the papers, submits the DBA, all of that stuff. S/he is of legal age (in the US, at least) to enter into mutually binding contracts, whereas people under the age of 18 are not. In a few cases, some businesses (hosting companies offering reseller accounts, domain resellers such as enom or GoDaddy) may allow underage people to sign up using their name and ID. You'd have to ask the places individually.

For filing taxes...it doesn't matter how old or young you are, but every business has to file taxes. Same with other legal requirements. You're acting like a person who is of age with the rights to own and run a business, you have to deal with the responsibilities as well.

For collecting sales tax...again, it depends on where you are. Most states in the US count web hosting as a service industry; and since there are no tangible goods being exchanged, no sales tax is required.

Which legal issues to comply with...that depends on your location. Some cities require business licences, while others do not. Same deal with some states: some require business licenses and fees, while others don't.

For registering DBAs and various business licenses: you'll have to check with your city or county for what is required, and any age limits they may have.

Sorry I can't give you better answers - but most of these are dependent upon where you live, and where the primary place of business is located.

[BlItZ]

Where would you recommend that I look for an account in my area?

Thanks!

[allan]

Originally posted by BlItZ

What are all of the legal issues that we must comply with to start?

Does our company have to pay taxes, since our company is only offering web hosting, domain registration, and perhaps web design services?


As Living Media suggested, your best bet is to consult with your local municipality. The rules for starting a business and paying taxes vary from area to area. Also, to reiterate, you ALWAYS have to pay taxes.

One suggestion I would make is to be careful in your choice of words. You may think of it as "only offering web hosting, domain registration, and perhaps web design services", but to many of your customers the website and e-mail will be an integral part of their business, therfore their livelihood.

If you approach hosting with a cavalier attitude about the companies you will be serving you won't be in business very long, and you will undoubtedly leave a lot of irritated customers in the wake of your flameout.

[allan]

Originally posted by BlItZ
Where would you recommend that I look for an account in my area?


Start with the local chamber of commerce, or if your local goverment has a small business development center, they are a good resource. Otherwise, use the Yellow Pages.

[iBiz]

you can check out the local chapter of SCORE and get lot's of useful information. These are retired ppl who have been there and done that. They should be able to at least point you in the correct direction http://www.score.org/

[interactive]

Hello,
The best thing to do is just go talk to a CPA, it wont cost you much and you'll learn a ton. By the way, be careful of partnerships, since your under 18 (or sounds that way) have your parents sign a agreement between the other person, even if you know them real well its a good idea. Good luck!

[DarktidesNET]

Your City Hall will be able to tell you all you need. They were very helpful to me.

[VoxKeysGtr]

A lot of good suggestions so far. You can definitely get a lot of good free advice at your local City Hall. There's an old man at mine that was a gold mine of info, and since he knew everybody in town, he was able to recommend some good accountants and lawyers. You definitely will want to consult with them at some point. Good luck! :cool: