[Tax Related/Business Related] Owner Legallacies / Legal Jargon

[FuRom]

Well, I've been reading some very old topics and noticed mentions of tax evasion and such in heated discussions. I figured this would be a good topic for the pet site owners to talk about. This is mainly for those that are making money off their sites.

CORRECT ME IF I'M WRONG! I'M ONLY GOING BY WHAT I'VE READ HERE AND THERE AND HOW I INTERPRETED WHAT I'VE READ.

The way I understand it, you can fully operate a website that generates profit without having to hold a business license. All money you make from that site should be filed as income and the people that you're paying to do artwork, and such can be considered "independent contractors" because an employee is someone that you control where and how they do the work. In contracting you only commission the work with information on what you want. That makes them responsible for filing their own taxes in turn. With that being stated, since you have no business license, I assume you'd refer to your business as a "sole proprietorship", I could find no information on if you have to hold a business license to claim "sole proprietorship" so I assume you don't need one.

[Kitty]

http://en.wikipedia.org/wiki/Sole_proprietorship
http://en.wikipedia.org/wiki/Business_entity
http://en.wikipedia.org/wiki/Trade_name
http://en.wikipedia.org/wiki/Business_license

"it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made,"

"A sole proprietor is not separate from the individual; what the business makes, so does the individual. At the same time, all of the individual's non-protected assets (e.g homestead or qualified retirement accounts) are at risk"

"Hiring employees may also be difficult. This form of business will have unlimited liability, therefore, if the business is sued, the proprietor is personally liable. The life span of the business is also uncertain. As soon as the owner decides not to have the business anymore, or the owner dies, the business ceases to exist."

"Each State has its own business registration and licensing requirements.

Example: Washington, D.C.
Most individuals and companies doing business in the District of Columbia must obtain a Basic Business License from the Department of Consumer and Regulatory Affairs.[3]Separately, organizations (including non-profits and cooperatives, but not including sole-proprietorships and general partnerships) must register their business"



anyway wikipedia is a good place to get all info

[FuRom]

Yeah, wiki is good for info, but it still didn't tell me anything that I didn't know about a lot of the information. Hiring is not a problem, you just don't hire employees. You commission "independent contractors".

http://en.wikipedia.org/wiki/Independent_contractor


An independent contractor is a natural person, business or corporation which provides goods or services to another entity under terms specified in a contract. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required, during which time she or he may be subject to the Law of Agency. Contractors often work through a limited company which they themselves own, or may work through an umbrella company.


Liabilities
The employer of an independent contractor is generally not held vicariously liable for the tortious acts and omissions of the contractor, because the control and supervision found in an employer-employee or Principal-Agent relationship is lacking. However, vicarious liability will be imposed in three circumstances:

1. where the contractor injures an invitee to the real property of the employer,
2. the contractor is involved in an ultra-hazardous activity (one likely to cause substantial injury, such as blasting with explosives), or
3. the employer is estopped from denying liability because he has held out the independent contractor as if he were simply an employee or agent.




That is pretty much the entire wiki for independent contractor there =/

[Kitty]

I guess it depends. Some people are contractors here as they don't work specifically for one site. They are just hired when needed.

And some are employees of a site

You could alwys put it on that yahoo questions thing, and hope someone who knows a lot about business/commercial law answers

[Patrick]

The way I understand it, you can fully operate a website that generates profit without having to hold a business license.
Correct

All money you make from that site should be filed as income and the people that you're paying to do artwork, and such can be considered "independent contractors" because an employee is someone that you control where and how they do the work. In contracting you only commission the work with information on what you want. That makes them responsible for filing their own taxes in turn.
Correct.

With that being stated, since you have no business license, I assume you'd refer to your business as a "sole proprietorship", I could find no information on if you have to hold a business license to claim "sole proprietorship" so I assume you don't need one.
And once again, correct. You don't need a business license to claim your income as a sole proprietor.