Starting New WebSite Business With Membership

[drewex]

Hello All, I live in California. I am planning to start a new website which charges membership to its members. At one point it will have its own app's also that will get payments and processing over IOS and Android. I was thinking of opening an LLC for it. But not 100% sure if that's the best way to move on this. The cost of an LLC is gonna be $800 annual minimum tax payments in Ca. If the business is successful and makes money great i'm happy to pay but in case it doesn't the cost is just too much for a site.

Is LLC best option for membership site. Should I look into S corp Or some other method thats somewhat cheaper if the business doesn't even make that much on the first year. The service does require myself separated from the business in case of lawsuit or some crap I don't want that affecting me personally. Not that i foresee anything like that would happen but you never know. Do I even need to pay taxes on the website membership (obviously I should but doesn't hurt to ask :) )

Thank you for the help

[vangogh]

If you need to keep yourself and your business separate, an LLC will be the least expensive way to do that. If you're concerned about the price to set it up and the tax payments then you probably want to skip the separation of personal and businesses and start out as a sole proprietor.

Do you have personal assets worth protecting? Do you own a house for example? If not then I wouldn't worry about separating business and personal. If you do have personal assets you want to protect then some kind of corporation whether it's an LLC, an S-Corp, or a C-Corp is probably what you want, but you'll have to spend some money and deal with the regulations. That's the cost of the protection.

I don't think you have to pay sales tax on memberships, but don't hold me to that. Maybe you'd need to collect them for people in California. Naturally you'd still pay income tax on what you make.

[drewex]

If you need to keep yourself and your business separate, an LLC will be the least expensive way to do that. If you're concerned about the price to set it up and the tax payments then you probably want to skip the separation of personal and businesses and start out as a sole proprietor.

Do you have personal assets worth protecting? Do you own a house for example? If not then I wouldn't worry about separating business and personal. If you do have personal assets you want to protect then some kind of corporation whether it's an LLC, an S-Corp, or a C-Corp is probably what you want, but you'll have to spend some money and deal with the regulations. That's the cost of the protection.

I don't think you have to pay sales tax on memberships, but don't hold me to that. Maybe you'd need to collect them for people in California. Naturally you'd still pay income tax on what you make.

Thank you for the info, I will have to go with LLC. I do have assest that i dont want business connected to it.

[shutupdan]

Yeah definitely stick with an LLC, it covers you for most things and is pretty simple to set up. $800 seems awfully expensive though.

[NotHere]

Yeah definitely stick with an LLC, it covers you for most things and is pretty simple to set up. $800 seems awfully expensive though.

I had a similar question to this and what you said is pretty much what I was thinking as far as separating my assets from the business and it being simple. I don't think it's that bad here in WA as far as the $800.00 price. I'm still looking into it.