Online business running different websites, do I need to register all of them?

[legends]

Hi everyone!

I'm trying to start an online retail business but I'm a bit confused in regards on how to properly register and run everything legally.

The thing is that I'm planning on reselling stuff online, pretty much clothes, electronics and kitchenware. I buy wholesale deals and then resell them for a profit. I've already tried for a few months on ebay and things went well so now I'd like to start again running it properly. I want to create 3 different stores with different names, (selling socks, radios and forks on the same site doesn't look too professional) but Ideally I'd like to run all of them under the same business license or dba to make it easier on the tax filling and reduce the starting costs. For example I'd like to register my sole propietorship dba as "Onlinesales" just to put an example, but then I'd have 3 different ecomerce sites with 3 different names "cheapsocks.com", "radiogaga.com" and "ezkitchen.com". Would it be legally possible to run the 3 of them under the same business license?? I already spoke with a small business counselor and he told me that since it's a s.p. there's no problem in running as many different stores as I want under the same license as long as I report all of them on the tax filling, is that correct?? I've been researching online and all the information is very contradicting. some claim that you must get a new dba for every different site that you open others say that there's no problem. Anyone has any idea??
I live in NY in case that's relevant.

Also for what I've been reading the basics that i need to start operating the business are:
1- Certificate of Authority to Collect Sales Tax
2- Business certificate/dba
3- EIN

Am I missing something?


Many Thanks!

[Harold Mansfield]

Hi everyone!

I'm trying to start an online retail business but I'm a bit confused in regards on how to properly register and run everything legally.

The thing is that I'm planning on reselling stuff online, pretty much clothes, electronics and kitchenware. I buy wholesale deals and then resell them for a profit. I've already tried for a few months on ebay and things went well so now I'd like to start again running it properly. I want to create 3 different stores with different names, (selling socks, radios and forks on the same site doesn't look too professional) but Ideally I'd like to run all of them under the same business license or dba to make it easier on the tax filling and reduce the starting costs. For example I'd like to register my sole propietorship dba as "Onlinesales" just to put an example, but then I'd have 3 different ecomerce sites with 3 different names "cheapsocks.com", "radiogaga.com" and "ezkitchen.com". Would it be legally possible to run the 3 of them under the same business license?? I already spoke with a small business counselor and he told me that since it's a s.p. there's no problem in running as many different stores as I want under the same license as long as I report all of them on the tax filling, is that correct?? I've been researching online and all the information is very contradicting. some claim that you must get a new dba for every different site that you open others say that there's no problem. Anyone has any idea??

You can run them all under one company name and license.

If you WANT to run them as separate entities, then you can set them up as separate businesses.



Also for what I've been reading the basics that i need to start operating the business are:
1- Certificate of Authority to Collect Sales Tax
2- Business certificate/dba
3- EIN

Am I missing something?

Many Thanks!

Business License.

[billbenson]

Do you need a business license if you don't have a store front??

[Business Attorney]

From what you described, you should be OK running all of the websites under your sole proprietorship as long as you identify the business name of your sole proprietorship in connection with each of the websites. A website in your case is more of a brand. For example, Proctor and Gamble can (and does) have a website for Tide and other products. However, to avoid the potential argument that you are "doing business as" your website name, it is important to prominently include the actual name of the business on the site (that is, don't bury it a single time in the terms and conditions).

Also, assuming you have a single merchant account for all your online stores, it will save you a lot of headaches if you have a notice on your shopping cart along the lines of 'Charge transactions with cheapsocks.com will appear as "OnlineSales" on your credit card statement.' I hate getting charges from identifiable merchants on my credit card statement.

[Business Attorney]

Do you need a business license if you don't have a store front??

That depends entirely on your local ordinances since business licenses are typically a city or county requirement. In most places, the answer is still "no" but that is changing.

[billbenson]

Thanks David

[Harold Mansfield]

Do you need a business license if you don't have a store front??

No. But all of the other stuff, DBA, Tax Certificate and EIN is kind of useless without a business license.
Technically you can run your websites in your own name and list them as additional income on your personal taxes. Register all of your domains under your name, your address which makes them personal property.

You don't really need a DBA since URL's are one of a kind. It's doubtful anyone would call their business by a URL that they don't own. You could trademark it though.
EIN's are used to identify a business entity. If you haven't established it as a business entity with a business license, and structure such as an LLC, you don't really need that either.

It's really all a personal/business choice.

No county official is going to raid your home for running a website without a business license. How would they even know? Technically you aren't even hosting it in your home. Just running it from there. And if it is registered in your name, it's basically property and additional income.

But the IRS will ding you for not reporting income from it.

Long story short, you don't need a business license to run a website.

[Business Attorney]

No. But all of the other stuff, DBA, Tax Certificate and EIN is kind of useless without a business license.

Harold, I think you and I are using the same term for different things. There are many kind of "licenses" but to me a business license is something that a local government issues. Within the boundaries of a municipality (city, town or village), licenses are issued by the municipality and where there is no municipality are sometimes required by the county. The type of legal entity is generally not relevant to the question of whether a business license is required. An antique store opening in a city will generally need a business license regardless of whether it is a sole proprietorship, partnership, LLC or corporation. Whether it needs to register an assumed name (dba), get a retailer's certificate or obtain an EIN are entirely unrelated questions and may be required whether or not a business license is required.

Many professions also must have a license. That requirement is usually created and regulated at the state level and is often unrelated to whether a business license is required. In Illinois, regulated professions include doctors, engineers, CPAs, insurance agents, barbers and nail technicians, among more than a hundred licensed professionals. But just because someone is a licensed nail technician does not mean that they can open a nail salon without meeting city licensing requirements.

Some other things are also called "licenses" and are of an even different nature. For example, what some states call a "tax certificate" in other states is called a "retailer's license".

Regardless of which "license" we are talking about, however, either someone needs one or they don't based on the specific requirements for that license. If they don't need a license, they still may need to do an assumed name filing, obtain a tax certificate or get an FEIN depending on what they are doing. Those are not "useless without a business license."

[Harold Mansfield]

My point was, that the application for things like the Tax license asks what the name of your business is. If you don't have anything legallly identifying your business with a designated name, then you wouldn't you use your own name?

So then that would need to be consistent across all of your paperwork, wouldn't it?

You can't just call yourself something on forms like that. Either you are a business with a legal name, or you are operating under your own name.
Would you really get a DBA, but no business license? What would you say? That you, as a person, is also doing business as a designated name, but that name isn't actually licensed as a business with the city or county?

Also isn't an EIN either given to a person or a business? If you aren't a licensed business, wouldn't you need to get it in your name?

I'm a little confused on how that would work.

[Harold Mansfield]

Also, with a website. If you are using the website's URL in your marketing. You aren't really calling yourself by that business name. That is simply the web address.

Just like healthcom is published by Time Warner. Yoursite.com can be published by [Your Name], and simply include it as additional income on your taxes just like any other income you'd get from profiting from a sale of personal assets, bonuses, or inheritance.

Am I getting this right?

[Business Attorney]

Harold, perhaps the reason I am having a hard time understanding where the confusion arises is because Las Vegas has a very broad requirement for obtaining a business license. Looking at the city's website, it appears that there is an absolute requirement for any business of any size to obtain a business license. While more cities are expanding their definitions of business to include virtually every business, at least historically that has not been the case.



You can't just call yourself something on forms like that. Either you are a business with a legal name, or you are operating under your own name.
Would you really get a DBA, but no business license? What would you say? That you, as a person, is also doing business as a designated name, but that name isn't actually licensed as a business with the city or county?

Let me use a specific example. Bill Smith is a business consultant who uses his home address for his business. He keeps his business records there, makes some phone calls from there and writes his reports there, but he never has clients visit his home. All of his services are provided at his client's premises, other than occasionally typing up a report or making a phone call from his home. Regardless of the form of his business, his is not the type of business that would normally require a business license in most jurisdictions. It appears that in Las Vegas, he would need a business license.

Let's assume, however, that he works in a city that, unlike Las Vegas, does not require a business license simply because you happen to live in the city and use your home for your business address and some incidental business functions.

If Bill is a sole proprietor but operates as Excellent Business Consultants, then even though he had no business license, he would be required in almost every jurisdiction to file for a dba. If he had no sales at retail, he typically would not be required to obtain a tax certificate. If he had no employees, he would not be required to obtain an FEIN.

If the only difference is that Excellent Business Consultants is an LLC, the results would generally be the same as above except that no dba would be required because he is using the legal name of the entity.

If Excellent Business Consultants is a corporation, no dba filing is needed if the name of the corporation is used, but an FEIN would be required.

The form of the entity would typically have no effect on whether a business license is required by Bill's business. In Las Vegas, if he used his apartment as his business address, it appears that a business license would be required whether the business was run as a sole proprietorship, LLC or corporation. Similarly, in other cities that do not consider this a business that is required to be licensed, the legal form of the business is not a relevant factor.

I can see that if EVERY business is required to be licensed (as in Las Vegas), registering a dba is an acknowledgement that the business is required to be licensed. If only certain businesses are required to be licensed, then registering a dba is an acknowledgement that it is a business, not necessarily that is one which is required to be licensed.

Since business licensing requirements are different in different jurisdictions, a person contemplating running a business out of his home clearly needs to become familiar with the licensing requirements in his own city.

[Harold Mansfield]

I think we are arguing opposite sides of the same coin.
The easy answer here is every city is different. Check with your local municipal offices.

But I stand firm that you don't need a business license to own a website anymore than you need one to sell things on Ebay or Criag's List.
But it is income that you have to report to the IRS.

[IADS]

Simple answer: Put a disclaimer and a copyright on each site displaying and declaring ownership. You don't need a DBA for each. If you are making money, you need a license for one local business. I asked this question when I went to my local county building to set up my business. At one point I had over 50 websites (they didn't all work out), so I was worried about the same issue...