2

I've been working with a group of freelancers for a few years now as we all work in the same industry (web development) so we've been helping small businesses on CL a lot.

We decided that we want to own our own website to market our services but by doing so (as our services would be branded as our web domain) do we need to register as a business?

All of our communication with clients and services would be virtual and we are splitting profits equally from our clients but none of us live in the same state (one of us is international) so setting up a business as partners seems odd as you typically register within your state.

If we did have to register as a business but choose someone to be an owner what information would they need about legal? There technically wouldn't be any employees as the pay is per contact.

I just don't want to get in trouble through the IRS or Legal matters. If it's possible to not have to register a business as we are all just freelancers working together, that would make it a lot easier.

Memj
  • 929
  • 6
  • 18

3 Answers3

1

I'll add an Australian point of view to this as a company is not the be all and end all.

There's a number of ways you could go about it. Firstly as already suggested, one member of the collective could hold the business name and the other(s) could contract through the by issuing an invoice for the work performed or the agreed value of the work.

Secondly both or all members of the collective could register a partnership and would have a predetermined distribution of funds and equity in the business.

Finally you could go down the company route however it costs a bit more than the other methods and theres a fair bit more mucking around to do. Then members would take a wage or salary for the work performed.

Erbilacx
  • 111
  • 1
0

Yes. Legally you need to have company under the name of your colleagues and yourself. Later on it will help you for your banking and personal accounting to claim taxes back.

Unless one of your colleague decides to work as a contracter you don't need to register him/her

Alex Satriani
  • 101
  • 2
0

You can not operate as a collective under one name unless you form some sort of legal entity. Who and how many individuals are part of that entity is up to you. It could be a single person with a DBA (doing business as) who then pays out to everyone else. If that person wants that responsibility of issuing 1099s, keep records, filing taxes, etc.

I don't know about foreign markets, but in the US there are only 2 ways to legally do business... as yourself, using your own name (sole-proprietor), or under a legal entity (LLC/LLP, S-Corp, etc) using a different name. Only sole-proprietors don't have to "form" anything. The moment you want to operate under something other than your own name you need to file things with the state/city/county/etc so they can track who is the responsible party behind "your business name". Even a sole-proprietor can not operate under another name without filing at least a DBA.

Scott
  • 17,400
  • 1
  • 37
  • 71