Establishing a business for websites (legally)

[thebassman]

I've now started earning $ from ads and whatnot on my website, and I figure, if I'm going to continue to earn $ from it, I should probably make it "legal". Now, I'm in Canada, so if anyone from Canada can help, that would be great, but feedback from non-canadians would be good to.

How did you go about establishing a way to make your online revenues legit? Did you create a numbered company, or how did you go about it?

[littleFella]

I think it's a good idea to register a business, although it is not compulsory in Ontario if you use your own name as the business name (without Inc. Corp, Ltd or wahatever).

So if you're John Smith you can operate as John Smith (but not as John Smith Internet Services)and you can still claim tax deductions as a business (sole proprietor).

Of course, the other scenario (not using only your name) requires you to register the business officially.

In Ontario you can do it over the Internet, using a credit card. I believe the fee is $80 (sole proprietorship) these days. Just make sure company name does not exists, or pay them to search it for you.

One important thing to consider is GST. Generally if you expect to make less than $30K/year in sales then you do not need to register for GST. Also, you do not charge GST from non-canadian residents.

GST can be a pain in the neck because once you get a GST number you have to fill forms every 3 months, whether you made a sale to a Canadian or not. But on the other hand, you save on your own GST expenditures using a basic principle:

GST Payable to Government = GST you paid to conduct business - GST you collected from sales.

Now, sole proprietorship caries some benefits but there are also associated risksd. The biggest risk is personal liability. If someone sues you, they sue your entire estate (wife and kids excluded, but their possessions included)

For tht reason yo may consider a Delaware Corporation. The cost is higher (anywhere between $300 and $1000 depending on options you choose) . The benefits are lower taxes, but the complexity of reporting and paperwork is far greater.

just my $0 CDN

[thebassman]

Hmmm... so it's probably a good idea to register a name (for the $80 or whatever), and just hope I don't make $30k Is it 30k net or gross?

Thanks for the info!

[littleFella]

Originally Posted by thebassman

Hmmm... so it's probably a good idea to register a name (for the $80 or whatever), and just hope I don't make $30k Is it 30k net or gross?

Thanks for the info!

Yes, it's gross.

Software business is ruled by some unique regulations. You will likely receive some guides ad paperwork from the Province explaining some general stuff. If you have more intricate questions you're better off if you writ to them and save the written response, do not throw out any correspondence form them.

[thebassman]

Thanks.

[littleFella]

Originally Posted by thebassman

Thanks.

Hey! waidd a aminute? Whereis my consulting fee of $0.49 plus GST?

[thebassman]

Hehe... I'll send a "cheque" in the mail. What's your GST number for my files?

[littleFella]

Originally Posted by thebassman

Hehe... I'll send a "cheque" in the mail. What's your GST number for my files?

you know what? My banking fee for a deposit is $0.80.
This one was on me then

[thebassman]

Hehe... ok. I'll get you next time, then. Where in Canada are you? Do you know the website where you register the business officially? I could just register something like Tim L. Walker _______ right?

[littleFella]

I'm in St. Catharines.

Yes, you can call your company petty close to anything, as long as it's not taken yet.

http://www.cbs.gov.on.ca/obc/english/4TFQ9B.htm

[thebassman]

Nice, thanks for the link.

[imaginemn]

Here is another resource for you. This was referred to me by one of my Canadian clients.

http://www.canadaone.com/tools/startingabusiness.html

I took a glance at it and seemed pretty interesting.

imaginemn

[thebassman]

Thanks.

[younghistorians]

Now just HOW MUCH are you making from your forums?

[thebassman]

Hehe... it's slowly getting up there.

[Gozo]

A Delaware LLC (not a corporation) seems like a good option for Canadians like us, Tim. There is no state tax due to Delaware companies and, with an LLC, federal tax is passed through the company to the personal level. Since you are not a US resident/citizen you don't need to file federal tax reports either.

Of course you must pay Canadian income tax on any 'salary' that your company pays you, but the bulk of your profits can be tax deferred.

I'm no international tax expert, but this is what I hear. Hey, we're running virtual businesses. There are advantages to that, believe me...

[cgo85]

I don't know to much about the Canada stuff. But I know here in Washington (state) if the business makes under 12k there is no need to even register. As long as the business doesn't make 12k, you don't have employees, you only use your real name and not a "doing business as" your fine here.

[Affiliate Boss]

http://www.cra-arc.gc.ca/ All the info you need

[Dave Hawley]

I think you should speak with a local qualified accountant.

[UKZJ007]

Originally Posted by thebassman

I've now started earning $ from ads and whatnot on my website, and I figure, if I'm going to continue to earn $ from it, I should probably make it "legal". Now, I'm in Canada, so if anyone from Canada can help, that would be great, but feedback from non-canadians would be good to.

How did you go about establishing a way to make your online revenues legit? Did you create a numbered company, or how did you go about it?

We will be doing the same with 2 of our sites, let me know how it goes.

(crawls back to revision)