Hey guys. I'm in process of creating a destination wedding website with a forum built in with three of my friends that lives in different states and country. I've never owned a website or a forum as a business before so I'm wondering if we have to claim it as a business if we get the left over revenue from the ads after the money went to the site fees and our web guy. We will be providing advertising space to wedding vendors. If yes, I'm wondering how complicated it will be running a business with two ladies that live on east coast and other lady in canada. We're just a bit confused!! Thanks for your help!
You can incorporate almost anything and divvy up the shares to you and your partners. There are many ways to skin this and the most important thing to consider is what would happen in long term, such as ownership among you three, if someone were to bow out or even sell her shares to some stranger, whether you want to be a stakeholder that can lose money out of your own pocket, etc... Depending on that answer, the financial and tax questions changes. I'm not an accountant or lawyer, so that might or might not best suit your needs.
Hmm, I just thought of a great idea! It will be like a forum, but there will be an area where you can create a destination wedding all in one website! Good luck with your site.
Thanks guys! Oops i didn't make myself clear...we will have a website PLUS a forum. We already have joomla installed so i'm not really familiar with it but our IT guy says it is really great so looking forward to it! I'm still just wondering if we have to claim it as a business. I think yes if we are going to get $$$ back from advertising. Invisible Fan is probably right that I should talk to an accountant...anyone an accountant here?
It's better to make some form of partnership or corporation now. Not that I know anything about your friends, but I think whoever's name is on that advertiser's paycheck can be considered the legit owner later on should there be any disputes. You might need a lawyer to set things up in a way agreed by the three of you. If you think that "disrupts chemistry" just approach it by thinking it's better for the cracks to appear now then down the line when things are really good or things are really bad.
Technically you are supposed to declare all income. I'm sure the savings from not declaring it will be minimal vs. claiming. If you are not making much and not declaring it how much are you really saving? probably not that much. If you are making a lot and claiming it how much are you saving? Maybe not as much as not declaring it but then you can write off other expenses (cell phone, cable, portion of rent/mortgage) offsetting the 'savings' from not declaring... and you will be tax compliant. How hard will it be to confirm total left over? not that complicated if everyone has an understanding and role. I have been involved in business with other people and balancing roles vs amount earned can be an issue. Even if you are contributing 33% there will be times (based on what you bring or dont bring to the table) where you are handling 50% of the load or 70% of the liability. As long as in the end it's equitable and fair. One of my partners in business wanted to work 10% and collect 50%. You need to be clear and cold as to who what going forward. unfortunately 'gentlemens agreements' don't always work out. at the minimum get a basic framework in writing. Corporations call this an 'operating agreement' wouldnt hurt to have a basic roles and understanding written out amongst the 3 parties.
