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Ask HN: business registration and banking as a service?
4 points by iostat 1679 days ago | hide | past | web | 7 comments | favorite
So, my friends and I have made this web service together. It started as something we were making for ourselves, but soon more and more people found out about it, and now we already have several thousand users. Some of our users are asking for a way to donate money to our project, and we could really use that money to cover our increasing hardware cost (we will likely soon need a second dedicated server just for this project alone). We thought of implementing paid accounts, however we are not sure how to organize the whole financial part properly. As I understand, to accept money from our users legally we need to be registered as some sort of company, and pay taxes. Nobody in our team knows how to do this, and, to be honest, we enjoy writing code much more than getting into those legal details.

The only easy option we see now is to receive user payments to a personal Paypal or bank account, however this will require us to pay taxes for all of that money, even though we will be spending most of it on servers and will be making zero profit.

Has anybody heard of a service that would allow us to open something like a virtual business account? We would need something that will:

- allow us to get money from our users to some sort of an account;

- allow us to pay for our servers from that account;

- in case our revenue exceeds expenses, pay proper taxes for the profits we make;

- allow us to withdraw post-tax income to our personal Paypal or bank accounts. We will then deal with personal income tax just like we do on our day jobs.

Has anybody heard of a service like that? We would appreciate any other advice as well.

You can register as a company(LLC), or Corp(S or C). Right now if somehow your service harmed someone they could sue you personally for damages. Register as company, register to fed id number off of irs.gov website. go to a bank and get a business bank account. You can then open a business paypal account they charge a fee but just about anything you spend on business can be written off as an expense and you don't need to pay taxes for it. You'll need to file a seperate set of tax returns for the company at the end of the year but it will if you spend all the money on the business then there will be nothng to tax. if you use an S corp or LLC if your business takes a loss the business can pass that loss on to your taxes.

Thanks a lot for the reply. Unfortunately, we are not based in US, and registering a company is much more complicated in the country we are living in. And, as I said previously, we would like to keep focused on coding, and pass all the legal details to somebody more competent.

This is a type of FI (read: a bank). Don't believe in any comment you will read in this thread, you need to seek legal help. (I own a bank/credit card company)

There are state and federal regulations regarding the type of service you want to provide. Don't even try to open a company without completely understanding the business and having extensive legal help.

Those type of companies have very strict guidelines and it is harder to adapt an existing company than trying to open another.

I am afraid, legal help will cost us much more than our limited user base would be able to pay. That's why we don't actually want to register our own company, but rather are looking for a company that provides service similar to what I described.

It's hard to believe that in 2013, when you can do anything online, nobody came up with such a simple service of handing payments and paying taxes for others.

This is more about regulation, not everyone have good intentions. What you could do is to pay with your own money and charge the user later adding your services, this should be legal without going into financials. But again, you got away with the banking regulations but you could have problems with the IRS, this is why you need legal advice.

You can never have an account where others can keep their money, once you receive money in, it should be yours. So, timing is factor a here.

But again, a 30 minutes talk with an advisor is not very expensive. There are offices specialized in opening such firms.

currently your operating a business called either a http://en.wikipedia.org/wiki/Sole_proprietorship. Also, check out : http://smallbusiness.chron.com/difference-between-partnershi...

Also, there's a lot more rules and texes once you add an employee.

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