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  1. #1
    SitePoint Member F1Frankie's Avatar
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    Need to be licensed to free-lance?

    Hello, everyone! First time post...I hope I don't sound like too much of a ding-dong...OK, here goes...

    Very slowly but surely, I'm working on training myself to be a web designer. The thought is that I would eventually form an LLC, then start to look for free-lance work anywhere I could get it, hopefully from any of the 50 states in the U.S. via Internet advertising.

    My question is with regard to whether or not it would be necessary for me, doing business as an LLC or any other corporate entity, to obtain any sort of license in any of the states to do such business? I would be most likely creating the LLC in Florida, if that makes any difference.

    Thank you in advance for your patience, understanding of my rookie knowledge level, and your time.


    Frankie in Florida
    F1Frankie
    Web designer to be...one day
    Just trying to learn as much as I can here...

  2. #2
    SitePoint Zealot detzX's Avatar
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    Don't waste your money on becomingly incorporated unless you start offering services(hosting, selling products). Been freelancing for 6+ years and I've found no need to.
    www.invoicejournal.com - Invoice clients for Free

  3. #3
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    You wouldn't need to register as LLC to be legal but I would recommend registering for a business license.

  4. #4
    SitePoint Member F1Frankie's Avatar
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    Quote Originally Posted by detzX View Post
    Don't waste your money on becomingly incorporated unless you start offering services(hosting, selling products). Been freelancing for 6+ years and I've found no need to.

    So, DetzX, when you get paid for your work, do they pay you as an individual, or to some sort of business name? Thanks so much for your reply.
    F1Frankie
    Web designer to be...one day
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  5. #5
    SitePoint Member F1Frankie's Avatar
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    Quote Originally Posted by John_DP View Post
    You wouldn't need to register as LLC to be legal but I would recommend registering for a business license.
    Thanks for your reply, John. Do you know if any sort of other license, other than a local license is required to do interstate web design free-lance business?
    F1Frankie
    Web designer to be...one day
    Just trying to learn as much as I can here...

  6. #6
    SitePoint Zealot detzX's Avatar
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    Quote Originally Posted by F1Frankie View Post
    So, DetzX, when you get paid for your work, do they pay you as an individual, or to some sort of business name? Thanks so much for your reply.
    http://en.wikipedia.org/wiki/Sole_proprietorship

    Either or. You can have a business name and not be incorporated.
    www.invoicejournal.com - Invoice clients for Free

  7. #7
    SitePoint Zealot
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    Quote Originally Posted by F1Frankie View Post
    Thanks for your reply, John. Do you know if any sort of other license, other than a local license is required to do interstate web design free-lance business?
    You would have to check with your local chamber of commerce. Laws are different from state to state. As stated in a post by F1Frankie. You can claim income on your name using your SSN, or you can register as a business to get a DBA number. Either way will be legal because you will pay taxes on the money earned, UNLESS local law requires you to register as a business.

  8. #8
    SitePoint Member F1Frankie's Avatar
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    Quote Originally Posted by detzX View Post
    http://en.wikipedia.org/wiki/Sole_proprietorship

    Either or. You can have a business name and not be incorporated.
    DetzX, do you do business with people outside of your home state? If so, are there any special licenses or anything of that sort necessary?
    F1Frankie
    Web designer to be...one day
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  9. #9
    SitePoint Zealot detzX's Avatar
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    Quote Originally Posted by F1Frankie View Post
    DetzX, do you do business with people outside of your home state? If so, are there any special licenses or anything of that sort necessary?
    I do business with people in other countries. You don't need any licenses...if you pay your taxes Uncle Sam is happy.
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  10. #10
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    Local business license: if you don't have a storefront or have customers coming over to visit you enough to attract the unwanted attention of your neighbors, don't bother.

    LLC or incorporating (presumeably S-Corp): I've been a company, a corporation and now I have an LLC. Because you want to offer services -- web design -- you are personally liable for any disasters without the protective shell of an LLC or corporation around you. It's not a MUST, but you should, for both the protective measures that you hope to never need and so that you also get in the habit of running your business like a company and not just an extension of your personal life.

    I'd recommend the LLC route for now, you can always change to a corporation later if your accountant tells you to. And you might even be able to create the LLC online (I did here in GA) from the comfort of your home.

    And do yourself a favor and locate a good accountant to help you with some of your decisions about setting up retirement accounts, tax deductions, setting up the company books, and the like.
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  11. #11
    SitePoint Zealot detzX's Avatar
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    I've seen it happen dozens of times so this is what I suggest. Start your business with a business name but don't incorporate just use your own SSN. In a year or two if you're doing well and still like it then go back and decide what you should do. Don't drop hundreds of dollars to incorporate and hundreds more to pay an accountant just to not like it and decide not to do it in a year, it's a waste...and I see it all the time.
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  12. #12
    SitePoint Member F1Frankie's Avatar
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    Quote Originally Posted by amf45 View Post
    Local business license: if you don't have a storefront or have customers coming over to visit you enough to attract the unwanted attention of your neighbors, don't bother.

    LLC or incorporating (presumeably S-Corp): I've been a company, a corporation and now I have an LLC. Because you want to offer services -- web design -- you are personally liable for any disasters without the protective shell of an LLC or corporation around you. It's not a MUST, but you should, for both the protective measures that you hope to never need and so that you also get in the habit of running your business like a company and not just an extension of your personal life.

    I'd recommend the LLC route for now, you can always change to a corporation later if your accountant tells you to. And you might even be able to create the LLC online (I did here in GA) from the comfort of your home.

    And do yourself a favor and locate a good accountant to help you with some of your decisions about setting up retirement accounts, tax deductions, setting up the company books, and the like.

    AMF, thank you so much for taking the time to reply!

    With regard to the LLC, do you know of anything within the LLC structure that might require me to be registered/licensed with other states if I do business in states other than my home state of Florida...say, if someone hires me that lives in NY. If my LLC is registered in Florida, and I work from Florida, and a client finds me in NY and wants to hire me, do you know if I must register with NY or be licensed with NY? How about any of the other states? I'm sorry to be a pest. I'm only asking because I'd heard somewhere about corporations needing to be licensed in certain instances when doing business outside the state of incorporation, and I'm trying to make sure that something like that is not necessary when doing business as an LLC.

    Thanks again, Frankie
    F1Frankie
    Web designer to be...one day
    Just trying to learn as much as I can here...

  13. #13
    SitePoint Member F1Frankie's Avatar
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    Quote Originally Posted by detzX View Post
    I've seen it happen dozens of times so this is what I suggest. Start your business with a business name but don't incorporate just use your own SSN. In a year or two if you're doing well and still like it then go back and decide what you should do. Don't drop hundreds of dollars to incorporate and hundreds more to pay an accountant just to not like it and decide not to do it in a year, it's a waste...and I see it all the time.
    Hey, Detz...thanks so much for the great advice with regard to licenses and saving money with business structures! Greatly appreciated, especially by a guy just starting out!

    Thanks again, Frankie!
    F1Frankie
    Web designer to be...one day
    Just trying to learn as much as I can here...

  14. #14
    SitePoint Zealot detzX's Avatar
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    You don't need licenses to work with different states. If you get an LLC in your state that's just saying where you business is located but in reality most places don't even register their LLC in their home state mainly for price reasons. In my state (MA) it cost $500 to do the LLC so if I get want to do it I'm not doing it here I'm doing it in another state such as Delaware where it's only $150 or so. There are a lot of other "hidden" costs to so be careful but my advice is still you don't need to do it yet.
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  15. #15
    Serial Entrepreneur
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    Quote Originally Posted by F1Frankie View Post
    AMF, thank you so much for taking the time to reply!

    With regard to the LLC, do you know of anything within the LLC structure that might require me to be registered/licensed with other states if I do business in states other than my home state of Florida...say, if someone hires me that lives in NY.
    I'm not sure what you mean that a corporation needs to be licensed when operating outside its home turf. I work in several states and European countries and only have my one corporation in GA. If I was going to get huge, I might consider incorporating in every state just to make sure my corporate name was the only one in use in the entire USA (example: Microsoft), but that's an extreme situation that you're not facing.

    Licensing just means that the particular government agency permits you to perform a particular service in a particular area. The services they license, though, tend to be real estate, legal, insurance, and hair cutting, to name a few examples. Nothing in technology at this time, probably because it tends to be more of a business to business transaction... as opposed to business to personal where you might expect the business offering the service is competant to do so.

    If you're just starting out, I'd probably agree that you can go "naked" and just invent a company name and start offering your services. But if you start to show some success, you'll want to protect the assets you'll acquire from a bad situation that might happen with an angry client, which means going the LLC or corporate route. At that point, don't be cheap about protecting yourself.
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  16. #16
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    Quote Originally Posted by detzX View Post
    You don't need licenses to work with different states. If you get an LLC in your state that's just saying where you business is located but in reality most places don't even register their LLC in their home state mainly for price reasons. In my state (MA) it cost $500 to do the LLC so if I get want to do it I'm not doing it here I'm doing it in another state such as Delaware where it's only $150 or so. There are a lot of other "hidden" costs to so be careful but my advice is still you don't need to do it yet.
    This is misleading advice.

    You can incorporate in any state you want to, but in most cases you'll be required to register your corporation in the state in which you are actually performing the work. So, if you live in MA but incorporate in Delaware, you'll have to register your corp/llc as a foreign entity in MA - that means you have to file two returns, pay two annual fees, etc. In addition, you will likely have to pay taxes in MA since that is where the 'nexus' of your business will be. So, setting up your business that way will increase, not decrease your costs.

    If you incorporate in Florida and you accept clients from other states, you probably wouldn't need to register in those other states unless you are physically going there and doing substantial amounts of business.

    Incorporating isn't just about liability, it's about taxes. If you are are a successful consultant or small business, you will almost definitely save money by incorporating unless you are just starting out and making very little money OR you aren't managing your business affairs correctly.

    Seek advice from professionals who have real experiencing giving advice about these topics. Be wary of forum advice
    The fewer our wants, the nearer we resemble the gods. Socrates

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  17. #17
    Word Painter silver trophy Shyflower's Avatar
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    If you are going to incorporate, you will need the services of an attorney. The attorney will know what other licenses, if any, you need. In many other states, if you don't incorporate but are doing business under a name different from yours, you need to register your business under an assumed name, for instance "John Doe (your real name) doing business as Best Web Design (the business name)".

    You can find more about DBA here.
    Linda Jenkinson
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  18. #18
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    Quote Originally Posted by Shyflower View Post
    If you are going to incorporate, you will need the services of an attorney. The attorney will know what other licenses, if any, you need. In many other states, if you don't incorporate but are doing business under a name different from yours, you need to register your business under an assumed name, for instance "John Doe (your real name) doing business as Best Web Design (the business name)".

    You can find more about DBA here.
    An attorney is a good idea, but it's not exactly fair to say that it's necessary for all businesses who are in the process of incorporating. The actual paperwork and filing process is easy, and there are many online services, CPA's, and do-it-yourself kits that can help someone properly form their business entity at a much lower cost that what an attorney would charge.

    What IS required is that the person forming the entity understand what their doing and choose the right entity. If the business is extremely simple, you may need a CPA much more than you need an attorney as the taxes are a huge factor in choosing the right entity. An attorney, in many cases, might be good at the paperwork but may make the wrong choice when it comes to tax matters. So, if I had to choose I'd take a CPA + online incorporating service over having an attorney do the paperwork + do the tax analysis myself any day.
    The fewer our wants, the nearer we resemble the gods. Socrates

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  19. #19
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    Frankie, the best thing you can do for yourself at this time is to go to your local SCORE and take advantage of their excellent counselling. There is a chapter in NPR there on US19. Their help is totally free and from looking at their local website, you have a ton of great workshops offered up there! ... And they are free to attend. I recently went to one down here in Clearwater and it was VERY worth while. They can answer all your questions and really help you put your feet on a solid foundation in starting a business so you are not just flying blind and hoping for the best.

    As someone else has mentioned, internet advice sometimes may not be correct for your situation and this the the best way (in my opinion) to get good, solid info that will help you with your situation and clearify any "hidden" surprises that wouldn't come to light in an internet forum. I've been lurking a long time here... there are definately some great folks here with lots of experience and good advice, however, everyone is spead out all over the place! And you really need some advice from experts in your local city. Best of luck to you!

    Btw, your SCORE has a workshop coming up on Nov 3 that may be what you're looking for.

    http://www.score439.org/Seminars.asp


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