Forming a business, yay or nay?

It's an excellent idea to set yourself up as a business as soon as possible. The costs are minimal and the tax liabilities you may incur from postponing this decision are potentially devastating. Take it from someone who's "been there and done that", setting yourself up as a business is one cost you'll definitely not want to skip out on. Speaking to your lawyer or accountant about what your individual needs are is highly recommended and he'll probably be better able to help you decide which business structure is best for you.

I chose to incorporate in the end, many domainers choose the LLC approach. Again, please do ask your accountant or lawyer, as they know you better than any of us possibly could.

you will have to file tax returns every year, but then again, you can write off alot of stuff you use in your daily life fr the internet etc..

Firstly i suggest you definitely go for it. Its cheap and it can save you a lot of money on tax.

Also, it greatly reduces liability. If for eg you made those typo site and the owner of the original site sued you.. Only the company would pay.. throgh its money. You wouldnt have to pay you personal money.

This leads me to ask a question. Lets suppose you started acquiring a portfolio before creating a business which includes some domain names of value. Won't you get bitten on the butt tax wise because you've essentially made a gift to a business (even one that you own)?

Great question BlackDiamond. I asked my chartered accountant about that recently myself and his professional opinion was that it would depend on how you went about acquiring these domain portfolios.

As in if you went about it as if this was an "investment" may have different tax implications than if you treated it as a domain name business from Day 1 but just neglected to register/incorporate.

Best advice is to find a good accountant from Day 1 and figure this all out ASAP. You'll be paying out of your butt otherwise down the road

BlackDiamond said:

This leads me to ask a question. Lets suppose you started acquiring a portfolio before creating a business which includes some domain names of value. Won't you get bitten on the butt tax wise because you've essentially made a gift to a business (even one that you own)?

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