

Ask HN: What is required for the business/legal side of web apps? - thisisdallas

In other words, if I was to launch a web app (US based) that actually cost users money and generated an income for myself, what all would I need to do to be legally recognized as a business?
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dangrossman
You are legally recognized as a business the moment you earn a dollar doing
business. You're called a sole proprietor, which is a business doing business
under the name of its owner. Taxes and legal obligations pass through directly
to you.

There are other types of business entities you can form -- partnerships, LLCs,
S-corps, C-corps, or a simple DBA ("doing business as") -- which can have both
benefits and downsides. You can talk to either a CPA or a lawyer that
specializes in small business about what makes sense for you.

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bmelton
Exactly.

The next and easiest 'upgrade' from sole proprietor for most people is likely
an LLC. As a sole proprietor, your personal assets are at risk in the event of
a lawsuit or class action and such. Incorporating in some fashion will protect
your personal assets in such an event and is arguably a more direct upgrade
from sole proprietor tax-wise.

It's only your call when to 'upgrade' if ever, but the answer is generally
somewhere between 'getting traction' and 'getting sued', with the real kicker
that you obviously can't incorporate after getting sued so, y'know, there's
that.

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Aqua_Geek
There are a number of ways to go about this. The SBA has a decent breakdown of
the various business structures: [http://www.sba.gov/category/navigation-
structure/starting-ma...](http://www.sba.gov/category/navigation-
structure/starting-managing-business/starting-business/choose-your-business-
stru)

The bottom line is that you really should talk to an expert. There are legal
and financial ramifications of each type of business entity, and you don't
want to get screwed.

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joonix
How far are you planning on going with this? More apps, turning into a full on
app studio? Just yourself, or hiring? Will you seek investors? These are all
considerations as to whether it's worth the hassle and cost of incorporating
an LLC or Corporation.

