I need help starting up

[vdo]

Planning on opening a internet business reselling electronic stuff, I cant find the cost associated to start a sole properitorship or coporation... what are the state fee for it? i am in california, what are advantage and disadvantage? i was thinkin about S-corp since it provides liablity protection but is there really a 800dolar minium state tax fee??? my buseinss is very small so, cost is a great issue...

anotehr thing is, can i waive all my liablilty if i state that any problems w/ the electronic stuff are liable thru the manufacutre and not me? therefore, i have no liablity at all... thanks!

 

[loku]

You can not waive your liability by disclaiming it and stating that the manufacturer only is liable. All those in the chain of distribution can be liable for defective products.

The $800 state tax fee is the minimum annual California Corporate Income Tax. ALL California corporations and Limited Liability Companies must pay that. You would not pay any fee to the state, other then income tax on what you earn, if you merely operate as a sole proprietor.

If there is little risk of personal liability from the business, it sounds like you probably would be best off just to operate the business as a sole proprietor and not incorporate or form any other type of entity.

However, if there is a chance of personal liability, for most small businesses, the best and easiest way to limit personal liability is with a Limited Liability Company (LLC). It protects you as well as a corporation would, but with much less formality. It is also much easier to form and maintain.

At any reate, before starting a business, I would highly recommend you read the FreeAdvice material at http://business-law.freeadvice.com/starting_a_business/ , and then go to the excellent Small Business Administration sit on Starting Your Business at http://www.sba.gov/starting/ . Particularly see their “Startup Kit.” Also, there is a very good state of California site dedicated to starting a business at http://www.ca.gov/state/portal/myca...yPath=/Navigation/Business&sNavTitle=Business

 

[vdo]

great, cleared it up for me..

so for a sole properitorship all you need is to register in the county you operate in, and thats the only fee to start?

so even with a waiver does that lessen your resposbility? liabilty is really low for my case, i just resell stuff, unless electronic compoent blows up and burn a house down which is unlikely
eve so that probably would not be my problem wont it? i just want to understand what could happen that i might be liable for since that seems to be the only implication for going with a corp. tahnks!

 

[loku]

SO FOR A SOLE PROPERITORSHIP ALL YOU NEED IS TO REGISTER IN THE COUNTY YOU OPERATE IN, AND THAT’S THE ONLY FEE TO START?

If the business is to have any name other than yours, you should register the “Fictitious Name” with your County Clerk. And you should get a business license from the city or county. That is it.


SO EVEN WITH A WAIVER DOES THAT LESSEN YOUR RESPOSBILITY? LIABILTY IS REALLY LOW FOR MY CASE, I JUST RESELL STUFF, UNLESS ELECTRONIC COMPOENT BLOWS UP AND BURN A HOUSE DOWN WHICH IS UNLIKELY

A waiver could lessen some of your liabilities, but not all. It is unlikely, but it is possible that you could be liable for the damages done by a defective product if you have handled the product rather then merely placed an order to have it delivered. However, even if that were to happen, the manufacturer would probably have an obligation to reimburse you.

EVE SO THAT PROBABLY WOULD NOT BE MY PROBLEM WONT IT? I JUST WANT TO UNDERSTAND WHAT COULD HAPPEN THAT I MIGHT BE LIABLE FOR SINCE THAT SEEMS TO BE THE ONLY IMPLICATION FOR GOING WITH A CORP. TAHNKS!

Yes, limiting your liability would probably be the only reason for you to go with a corporation or Limited Liability Company, which would be a better choice for you than a corporation, see above.

 

[vdo]

thank you very much, you have been very very helpful...

now on the liability, yes thats all i do, i pick up sealed packages from a wholesaler and then pack it in another box and send it to an individual, i will have a disclaimer stating that any harm caused by defects are handled by manufacture... so i understand that i am sitll not 100% liablity free but wont this would greatly reduce any potential where its very unlikely i would have any problems? tahnks again!

 

[loku]

NOW ON THE LIABILITY, YES THATS ALL I DO, I PICK UP SEALED PACKAGES FROM A WHOLESALER AND THEN PACK IT IN ANOTHER BOX AND SEND IT TO AN INDIVIDUAL, I WILL HAVE A DISCLAIMER STATING THAT ANY HARM CAUSED BY DEFECTS ARE HANDLED BY MANUFACTURE... SO I UNDERSTAND THAT I AM SITLL NOT 100% LIABLITY FREE BUT WONT THIS WOULD GREATLY REDUCE ANY POTENTIAL WHERE ITS VERY UNLIKELY I WOULD HAVE ANY PROBLEMS?

I agree it is very unlikely that you will have any problems about this because the products are not really dangerous; however, if you are a merchant, and you sell a product and the product you sell does cause any damage, you would be liable and there is no way to disclaim the liability. However, in your case the manufacturer would also be liable, and the customer might sue the manufacturer and not you. And if you do get sued, you would be entitled to by reimbursed by the manufacturer.

So you have to take the slight risk, form a llc, or get product liability insurance.