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Online Affiliate Business (LLC, S-CORP, SF or Delaware?)

Asked over 2 years ago - San Francisco, CA

Hi I'm starting an affiliate business that runs online and will accrue revenue from ads and completed purchase percentages.

I am based in San Francisco and am trying to figure out the best way to reduce taxes and reduce liability for myself.

I'm running the site by myself at the moment and don't have plans on seeking outside investors or hiring any employees in the near future.

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Attorney answers (3)

Steven Alan Fink

Reputation Level 20

Answered over 2 years ago. Real Estate Attorney in Newport Beach, CA.

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The worst way is a Delaware corp. Because you do business in CA you would have to register the De corp as a foreign corp in Ca and pay 2 sets of fiing fees. Scorp is simple, quick and easy as is LLC. Little difference between them as far as liability is concerned. As far as taxes, speak to your accountant.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.

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Dana Howard Shultz

Reputation Level 15

Answered over 2 years ago. Corporate / Incorporation Lawyer in Oakland, CA.

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I believe that an LLC is a better choice for you than a corporation because there are fewer compliance formalities - please see the first link below.

I agree with the first answer that you should form your LLC in CA rather than DE.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

Should I for an LLC or a corporation?

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Pamela Koslyn

Reputation Level 20

Answered over 2 years ago. Business Attorney in Los Angeles, CA.

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I agree that the best choice is probably a CA LLC, and you may also want to get liability insurance with advertising injury coverage to reduce the risk of personal liability, and you should make sure you adhere to the LLC's (few, that's why it's a good choice) formalities.

You should also consult a business/IP lawyer to make sure you ahve the proper privacy disclosures and disclaimers on your website, a well-chosen business name, domain name, and trademark, properly drafted contracts with your customers and advertisers, etc. etc.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

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