Internet Business Pitfalls

I live in Colorado and I am also domiciled in Texas.

I am close to finishing my website which is a industry specific classifieds, networking businesses that have excess custom fabricated product due to change orders, miscalculations ect. I would like to make money purely from advertisers and not charge for classified adds or sales. I will also not have any shipping, or purchasing responsibility. My site will be only a networking tool which will be moderated by myself.

My questions are,

1) Do I need to be licensed to do business in all states?

2) What is a better state to do business in? TX or Colorado. Or is it worth it to set up a business in a different state for my proposed business?

3) If I do set up my business in a separate state, can the paperwork be done remotely? Or do I have to drive or fly to the Secretary of State where I will do business out of to file the papers?

4) Dose anyone know off the top of there head what type of business organization might suit my need the best?

5) What type of fees am I looking at?

6) What type of legal pitfalls or liability concerns might I run into.

Of course I will talk to a lawyer before its all said and done but If anyone could bring to light any or unforeseen troubles I might have I would greatly appreciate it.

For a web-based business you typically only need to be licensed in the states for which you maintain a physical presence.

Whether Texas or Colorado is better depends on way more things (mostly not legal) than we can evaluate here.

Don't know about Texas or Colorado, but I know you can mail in the paperwork here in Virginia.

Business organization again depends on many factors.

Corporate filings go for less than a few hundred in most states. A DBA and tax license usually is under a $100.

Frankly, I'd talk to a whatever SMALL BUSINESS assistance (often also available through public libraries) in whatever location you have your physical presence and they typically have information that will answer these sort of questions.