Legal Advice/Experienced Business Owners for a New Business

sarukun

Howdy, guys; I know this type of thing is never a substitute for a lawyer I'm paying actual money to advise me, but a friend and I are about too start up a business, and we'd like to know a little bit about what we're getting ourselves into. As it stands all we're really looking to do is file a Doing-Business-As Statement in California and grab ourselves a TAX ID form the IRS; we're going to uses this documentation to then open a Business Account at a bank and set up an Amazon Business Account so we can get a Kickstarter going for our project.

The helpful staff at the bank suggested that we should get incorporated (we had been thinking LLC), but since California law is that if you are a corporation, you pay 800 bucks in Taxes minimum come hell or high water and we're pretty positive we're not going to see that kind of cashflow in the near future, we're hoping to just get our fictitious statement filed and leave it at that so the taxes and profit/loss stay with us so we don't occur any additional taxes. However, the bank advised us that doing so would make incorporating later on a huge pain in the butt. I'd like to know a little bit more about that process and just have a chat about some of the pitfalls and problems we're likely to encounter as we go through with this. I know there's a couple of other permits we'll need in order to get things squared away, but we're focusing on what the bank needs to open this account, and what kind of problems we may face in the future (although if you want to give me a list of relevant permits for software development in California, I'm not going to scowl at you!).

Let me know if you need any additional information and I'll see what I can do.

Thanks in advance for the help, everybody.

amateurhour

sarukun wrote:

Howdy, guys; I know this type of thing is never a substitute for a lawyer I'm paying actual money to advise me, but a friend and I are about too start up a business, and we'd like to know a little bit about what we're getting ourselves into. As it stands all we're really looking to do is file a Doing-Business-As Statement in California and grab ourselves a TAX ID form the IRS; we're going to uses this documentation to then open a Business Account at a bank and set up an Amazon Business Account so we can get a Kickstarter going for our project.

The helpful staff at the bank suggested that we should get incorporated (we had been thinking LLC), but since California law is that if you are a corporation, you pay 800 bucks in Taxes minimum come hell or high water and we're pretty positive we're not going to see that kind of cashflow in the near future, we're hoping to just get our fictitious statement filed and leave it at that so the taxes and profit/loss stay with us so we don't occur any additional taxes. However, the bank advised us that doing so would make incorporating later on a huge pain in the butt. I'd like to know a little bit more about that process and just have a chat about some of the pitfalls and problems we're likely to encounter as we go through with this. I know there's a couple of other permits we'll need in order to get things squared away, but we're focusing on what the bank needs to open this account, and what kind of problems we may face in the future (although if you want to give me a list of relevant permits for software development in California, I'm not going to scowl at you!).

Let me know if you need any additional information and I'll see what I can do.

Thanks in advance for the help, everybody.

I'm in TN but I just went through all of this so I can at least offer my .02

First off, you should get an LLC, but it's not priority one in my opinion. My wife and I decided last October after a successful first comic convention to start selling our work at cons more often.

We registered as a business (husband-wife) partnership and filed for a federal EIN (tax ID) and got all the paperwork for county and state taxes.

Here's the thing though, you are already starting off with a business account, and the sole purpose of an LLC, at it's core, is to protect your personal assets from your business assets, so I'd say it really depends on what you're selling.

Again, I feel like you don't really need an LLC your first year out, but that's just my opinion. It should be priority one next year though.