How to Incorporate an Internet Business
Operating an Internet business can give home entrepreneurs the ability to generate income wherever they have computer access. However, running your own Internet business also increases the financial risks and liabilities involved with owning a company. Learn how to incorporate an Internet business to gain additional legal protection compared to simply running the business as a sole proprietorship or limited liability company (LLC).
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Instructions
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Understand the levels of small business ownership. Most Internet businesses start off as a sole proprietorship or partnership. If your Internet business is ever sued or faces legal prosecution, your personal assets are at risk. Registering your business as a limited liability company (LLC) offers added protection, though incorporating as a C- or S-corporation takes it to the next level and offers the greatest protection of your personal finances.
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Choose whether you wish to incorporate as an S- or C-corporation. S-corporations allow owners to note the business' profits and losses on their personal tax forms. C-corporations are viewed as a singular business with no connections to individuals, thus giving the business more room to grow.
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Contact a business attorney by browsing The Yellow Pages or online databases such as lawyers.com. Select an attorney with experience incorporating businesses. The cost of incorporating an Internet business can cost up to $1,000.
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Provide your attorney with all information he or she needs about your business. The requirements in each U.S. state differ. Your attorney will provide you with requests for information (such as business-owner names and business addresses). The attorney will then file your state's specific articles of incorporation. The application process time varies state by state but should only take a few weeks. During this time, you must also apply for a Federal Employer Identification Number (see Resources).
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Track all business documents, expenses and profits after incorporating your Internet business. You must provide all of these documents to your attorney. The attorney will review them regularly and file any relevant updates with the government, as well as ensure that you are following corporate-compliance regulations and laws.
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