Well, I think that it comes down to a personal choice whether they want to operate as a company or as an individual. Different tax brackets, different levels of liability, benefits, etc. If a seller feels secure enough to operate as an individual and it meets his needs, it is definitely his choice.

I agree with you 100%.

Artashes, this is such a true statement. There are three keys to a successful, happy and healthy business. A good lawyer, a good insuracne agent, and a good accountant. If you incorporate which I hope everyone does for their business, make sure to pick up a business general liability policy too.

While incorporation almost always gives you persona liability protection unless you use it for personal gain like using the same personal and business bank account having a incopration does not protect business assets. If someone sues your incorporated entity and they win you'll have probably no assets left and no business. For less than $300.00 a year in most states you can pick up $2 million in liability coverage that will save you from closing up shop as long as your running your business legally.

As a business owner, you take risk. Don't take a risk on your well being and your business well being.

Don't forget that you can get liability insurance without incorporating - hate paying that bill, but it's an absolute necessity. And always separate your business and personal accounts.

All the hosting companies I work with are legally registered as LLC or DBA. You have to have a legal entity to do a lot of company day to day activities. Such as signing up for the BBB. Which improves cusotmer confidence.

You had me up to the BBB. While they do help to improve customer confidence, I think their relevance has diminished in this industry.

Great post, Steve!

Yes, of course we have been registered for long time ago. <<URL removed>>

Warm regards,
Jurgen

For my own business, I don't have plans yet because my site was still under construction by myself to improve the content, script and widgets....especially ads and hoplinks. I will try to register my business soon in web hosting programs.

This is a great post Steve.

My company isn't legally registered and to say it Im not that proud of it, I want to get it legally registered so I can do contracts, Only this is that its too much money for me ATM and Im only a 10th Grader trying to start his job life time. I just hope I can't get into big trouble for running a company like this and not being legal age If there is a legal age... And although some of my client do know that im just a 10th Grade, they trust me and know what there risking but I prove it t them that I can do it.

Providing great service and support is huge, but being in the 10th grade, you can't legally enter into contracts, so there is a risk on the client side as well as yours. How do you handle liability?

I don't think he can't really...Can he? I mean you would need (in my opinion) atleast $5k for just-in-case situations...Never know when a client will take you to court.

Money in hand is irrelevant.

The issue is whether or not he can legally enter in to a contract.

I believe you can always have your parents, or other guardian, to back you contractually. Assuming you're making over $400 annually, how do you handle income reporting?

Hey Steve, Great post, enjoyed reading the responses in this thread.

In Ontario, (Canada) you cannot lawfully conduct business using a business name unless it is a properly registered name. The only exception to this, if you operate the business using your personal given name(s). As we like to conduct business in a lawful and professional manner we have been registered since our inception date of 2003.

Thanks postasite. When you look at signatures on posts and threads in web hosting forums, how do you, as a prospect, know anything about these providers? I know, myself as a brick and mortar business owner, risk dire consequences if I select the wrong provider. I can't afford to take one step forward and three steps backward.

Employees trust their owners to make responsible business decisions, including the look, feel and professional presentation of their business online.

Perception is HUGE. If you're a provider, it's not how great you actually are, rather how you're perceived. If your support team fixes an issue the same as another provider, but your perceived support is condesending or shallow, your business will suffer.

A huge risk factor is the stability of the provider - will they be here tomorrow and five years down the road? When you have issues, do they have the resources to resolve them quickly?

In the case of whether your business is registered, the risks are exponentially increased if they aren't. What is your recourse if they close shop and keep your money? And this isn't just isolated to legal recourse. The time you waste chasing down issues relates to real dollars lost.