
Ask HN: Monetize side project without registering a business? - sdevonoes
I have a side project (SaaS) that I want to monetize, but I do not want to go through the hassle of setting up a business without knowing if the project is going to make decent money.<p>I would love to launch my project and wait (let&#x27;s say 3 months) to see if it can actually make money. If it actually does, then I will register a business for it, otherwise, I would just shut it down.<p>Question is: is it legal to sell online services this way? Would you, as a potential customer, trust it? I&#x27;m based in Europe.
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cosmie
As others have said, it's different between jurisdictions.

In the US it's legal, and is considered operating as a sole proprietor. But in
doing so, there's no separation between you and the business, and you (and
your personal assets) are 100% on the hook for any legal or liability issues
that come up.

For that reason alone, I set up an LLC and route all consulting/moonlighting
work and side projects through that LLC. The hassle and business licensing
costs worked out as far cheaper than operating as a sole proprietor and
getting the necessary insurance coverages to comfortably cover myself.

Although it depends on what your SaaS is, you may want to at least checkout a
professional indemnity insurance policy[1].

[1] [https://www.simplybusiness.co.uk/insurance/faq/what-is-
profe...](https://www.simplybusiness.co.uk/insurance/faq/what-is-professional-
indemnity-insurance/)

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fyp
Should also search HN for "piercing the corporate veil" to see the numerous
past discussions on the caveats.

[https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...](https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=llc%20pierc%20corporate%20veil&sort=byPopularity&type=comment)

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mtmail
In Germany you'd need to license as sole trader ("Gewerbeschein") costing
about 25 Euro, depends on city/county. You're still an individual and keep
your personal tax number, but now indicated you plan to make money besides
being employed. Same procedure if you want to do freelancing. Or write
newspaper articles for money. Or anything that generated income. So if you're
a freelancer it would be already covered. Any accountant can walk you through
the steps. Invoices will carry your name and home address. You're fully liable
with your money.

Starting a limited business is separate. Then you need a separate bank
account, register with the tax office, get a separate tax id. Depending on
type of business you might need to bring in money (25.000 Euro for a German
GmbH) or you need two founders. Year end taxes are more complex. Disolving a
company is a pain.

VAT is also separate. Freelancers in Germany for example are exempt until
17.000 Euro, the limit is even higher in the UK.

So legally you probably need to register. Since you're already fully liable
even when registered some people delay it, even months and then backdate. Not
ideal but afaik there's no fine. I delayed by 5-6 months, tax office didn't
care.

Individual customers won't notice, when is the last time you looked at the
imprint of a website? (I do, but I might be the exception). B2B customers
probably care. And larger account will already wonder "will this website still
be online in 6 months" regardless.

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dirktheman
In The Netherlands you can, as long as you comply with a number of rules
(hours worked per year, number of clients, turnover). You have to send
invoices, but can't charge VAT since you're not a business but a private
person.

I'd check with your local Tax Service first, though.

As for your customers: are you selling B2B or B2C? For B2C I wouldn't really
care (in fact, there are a number of paid apps that I use that were made by
private persons!). For B2C it could be a problem because your clients won't be
able to deduct the VAT.

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rahimnathwani
The page below suggests that, in the Netherlands:

1\. Anyone who wants to do business must either register as a sole trader (
_eenmanszaak_ ), or set up a company or cooperative. So it seems you _have_ to
register something.

2\. Not only can sole traders register for VAT, but this registration happens
automatically within 2 weeks of you registering as a sole trader.

[https://business.gov.nl/starting-your-business/choosing-a-
bu...](https://business.gov.nl/starting-your-business/choosing-a-business-
structure/sole-trader-or-sole-proprietorship-in-the-netherlands/)

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goalexboxer
Isnt it possible to use a virtual company like Xolo at the beginning?

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newusertoday
i second this you can also use reseller services like paddle which will take
care of all the payment and taxation related to payment for you while you can
remain "solo proprietor".

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brudgers
_legal to sell online services this way?_

That is a question for a lawyer. Laws vary significantly between
jurisdictions. These include tax laws as well as registration laws. If it is
not worth paying a lawyer, it might not be worth pursuing as a business. Good
luck.

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caseyscottmckay
It depends on the jurisdiction. In the US, you can run a business as a sole
proprietor.[1]

[1][https://www.sba.gov/content/sole-
proprietorship](https://www.sba.gov/content/sole-proprietorship).

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p0d
Yes, been doing it for years. Just pay taxes on the extra money you make and
all will be good.

