Most Appropriate Business Type for Selling a Virtual Product?
I run a business where sells certain ebooks and pdfs online. I want to form an official business entity just to be able to operate under that name, protect myself from liability as well as get any associated tax benefits. What would be the simplest and most effective type of business for an online company with one owner?
LLC Business Sole Proprietorship S Corp
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That would depend on your local laws, right? – Elssar 12 years ago
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correct, I am in North Carolina in the US – Clifgray 12 years ago
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For simplest, most people will probably say a North Carolina LLC. – Frenchie 12 years ago
1 Answer
Only a limited liability company allows you to separate yourself from personal liability, along with the attendant regulatory filing overheads. However, you have to ask yourself what is your degree of personal liability if undertaking a micro-business. Tax benefits are only worthwhile if individual tax rates are higher than corporate (which unless you have large volume not likely) as expense deductions should be similar (eg internet account).
There are alternative options/structures that you may wish to consider
- indemnity/public insurance (if sole proprietor)
- coop ... band together with others of similar mind and share insurance
- single member LLC ... see Minnosota laws as every state is slightly different
- pass through trading trust - rather complicated but preserves long-term wealth
