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Dwayne B.
Dwayne B., Attorney
Category: Business Law
Satisfied Customers: 32373
Experience:  Practicing for over 20 years and helped a number of businesses with litigation.
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I'd like to start an online business but 't know

Customer Question

Hi, I'd like to start an online business but don't know where to start.
Submitted: 6 months ago.
Category: Business Law
Expert:  Ely replied 6 months ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

Okay, this is a very open-ended question. Please tell me:

1) What kind of business will this be, i.e. what will you be doing?

2) What is your question exactly, i.e. what can I answer for you?

This is not an answer, but an information request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.

Customer: replied 6 months ago.
I'm starting an online business called ****************
Parents will no longer need to pay for babysitting. I'd like to set it up where parents can go online, find other couples with kids their age, meet with them, set up a playdate to see how their kids play together and then they can take turns watching each other's children. No more paying for babysitters AND you get to meet new couples in the area!! I'd like to charge $25/month for this online service and have started through LegalZoom. Now I'm trying to set up the website. My question is....what kind of problems can I expect from the IRS???? What are your ideas on how to register my business. I registered it under the name ************.
Expert:  Ely replied 6 months ago.

I am going to opt out of your question and open this up for other experts.

Your JustAnswer Account has not been charged for this conversation and your question is back in the queue. You do not have to stay online for the question to be active. Should an expert pick it up, you should be alerted via email and/or SMS (text message) unless you actively disable these features.

There is no need for you to reply at this time as this will "lock" your question back to me, thus inadvertently delaying other experts' access to it.

My apologies for any inconvenience and good luck...

Expert:  Dwayne B. replied 6 months ago.

Different expert here. I see the other expert, who is very good, opted out

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I see you have a couple of questions, and I'll answer those as best I can. Of course, these are fact dependent to a large extent.

what kind of problems can I expect from the IRS?

There are no problems that you should just automatically expect from the IRS. You would, of course, want to keep accurate records as to the income of your business but that is pretty easy to do with an online membership business model. Since you aren't really going to be using employees, etc. then the only real issue you have is with income and expenses. One of the #1 red flags for the IRS is a deduction for a home office so you want to be careful with that. I'd also suggest you hire an accountant to handle your finances and taxes ASAP.

What are your ideas on how to register my business?

I'm not sure what you mean by "register your business". If you are talking about whether to operate as a sole proprietorship, a partnership,etc. then you probably want to strongly consider forming a corporation of some type,possibly an LLC or even just a regular corporation. The S corp or C corp designation is one that solely has to do with taxes and most people choose an S corp.

If you have never set up or been involved in a corporation before then I'd strongly recommend you don't use a forms website to incorporate. You need a lawyer to advise you on how to "act like a corporation" because there are a lot of ways to mess it up and end up waiving all the protections a corporation provides you.

You also want to get a good set of terms for your website. I like the ones at http://rebellionbooks.com/products-page/all-products/website-non-adult-content-forms-bundle/

That bundle has most of the ones you would need and they are easily adapted to your specific business. No matter where you get the forms you are going to have to make some changes to make them fit your business.

I'm not sure what else you were looking for but if you have additional, specific follow up questions then please ask them in this thread.

If your question has been answered then I'd offer my best wishes to you and ask that you please not forget to leave a Positive Rating so I receive credit for my work.

Of course, please feel free to ask any follow up questions in this thread. I want to be sure that all of your questions are answered. In addition, once you issue your Positive Rating the question will lock open and you can come back to it anytime in the future if you think of something else.

Customer: replied 6 months ago.
Ok. Thanks. I already own a tree farms with several employees so I'm pretty knowledgeable when it comes to taxes, expenses, etc. I guess here's my questions....I'm going to set it up as a membership type deal. For example, my legal business name is ***** *****
Here's how it'll work: You and your wife want to go golfing this Saturday but don't have a babysitter, so you log onto swapkids.net and see if anyone in your area wants to swap a day with you. For example, you watch their kids Friday night and they'll watch your kids Saturday so you can go golfing. The website will help you choose a family that fit your kids' ages, morals, etc. There's going to be a page that you can set up playdates, so you can get to know the other parents and their children. I'm going to do a "Backyard BBQ" where you can click a date on the calendar to invite other parents also. With that being said it's going to be a Networking Site but there will be a membership to it. What will the IRS say if people are "Bartering" care??? Should I be worried about getting sued if something doesn't work out for a family. A child gets hurt, abused, etc??? Can I be held liable because they used MY site???
Expert:  Dwayne B. replied 6 months ago.

You really don't have any interest in what the families do as far as whether they pay each other or barter services like that so the IRS won't care about your involvement.

You do have to worry about getting sued which is why you want to have a corporation, want good terms of service, etc like that packet I gave you the link to, etc. It's unlikely you would actually be held liable but you could definitely be sued. If you do the "paperwork" correctly on your site then if you do get sued you should be able to get out of the case early and before you run up attorney's fees.

Customer: replied 6 months ago.
I screwed up when I registered it as an LLC?
Expert:  Dwayne B. replied 6 months ago.

No,not necessarily. An LLC is one of the types of corporations but it isn't always the best type for all situations. To determine what type is the best you would have to sit down with a lawyer and have them go over the details of your operation. I'm not a fan of forms for things like this because the only way you will know if they are messed up or not what you want is either 1) hire a lawyer to review them now or 2) wait until you get sued but then if they are messed up it is too late.

In addition, there are certain things you need to do to "act like a corporation". The list is long and detailed and, again, needs to be addressed in person after an in depth interview.

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