Question:  Updated on 1/4/2011.  Is an LLC necessary to run an online business? I want to start a renewable energy business online. This business will link actual companies that will pay me for the traffic sent to them. My main task is driving people to the web site. The more traffic and order, the more commission I could receive. Do I need an LLC or business licence for this?

Answer:  Whether online or land based business, the consideration is more whether you are liable to incure business debt and be subjected to business related lawsuits.  If so, it is recommended by most small business advisors that you get an llc.  This is true especially if you think that your type of online business is subject to personal, legal, or financial liability.

A LLC is a separate legal entity from the
its owners / stockholders. It is a corporate entity created by the state and at the state lever.   I.e., you cannot have a nationally registered LLC because there are no LLC registrations at the federal level.  A trademark on the other hand, can be registered both at the state and federal level but not at the county or city level.

Also, note that:
An LLC can own property

An LLC can enter into contracts

An LLC is responsible for its own debts

An LLC's shareholders, members, managers, directors, and officers are not liable for corporate obligations

The result is that there are certain tax advantages to becoming an llc or LLC and also shareholders are not liable for corporate debts and liabilities arising out of business transactions.
 

    In general, here is the legal aspect of an LLC and what an LLC includes and its requirements for legal existence.

•  Purpose for limited liability organization.
•      Filing requirements.
•          Perpetual existence of company.
•        Articles of organization: Required and optional provisions.
•          Name of company: Distinguishable name required; availability of name of revoked, merged or otherwise terminated company; limitations; regulations.
•             Name of company: Reservation; injunctive relief.
•          Commencement of organizational existence.
•             Penalty for purporting to do business as limited-liability company without filing articles of organization; enforcement; regulations.
•              Amendment of articles of organization before issuance of member’s interest.
•              Amendment and restatement of articles of organization.
•              Filing of certificate of amendment or judicial decree of amendment; effective date.

A sellers permit on the other hand is a sales tax id issued by a state agency and its purpose is to track dealing in items you can touch. I.e., taxable items. Thus if you buy or sell wholesale, or sell retail, you need to get a state sales tax id also called a sellers permit. A dba stands for Doing Business As, and it is the registration of your trade name if you have one that is different from your llc's legal name. You are required to register your trade name within 30 days of starting your business. As already stated,  instead of registering a dba, you can simply form an llc or corporation and it will have the same effect, namely register your business name.

A sellers permit on the other hand is a sales tax id issued by a state agency and its purpose is to track dealing in items you can touch. I.e., taxable items. Thus if you buy or sell wholesale, or sell retail, you need to get a state sales tax id also called a sellers permit. A dba stands for Doing Business As, and it is the registration of your trade name if you have one that is different from your llc's legal name. You are required to register your trade name within 30 days of starting your business. As already stated,  instead of registering a dba, you can simply form an llc or corporation and it will have the same effect, namely register your business name.

An LLC can be obtained from our site, here online.  Simply click on the "Order" button and answer the questionaire to get it here online.

It is recommended that you form an llc for your online business.  However, you also  are legally required to obtain a business license, a sellers permit (if you will also sell any taxable items), and a dba certificate if the llc name is different from the trade name you will use. A business license is usually a flat tax assessment and a percentage of your gross income -- as opposed to your income taxes on profit, or taxes on the sales of tangible items. At any rate, it is a required business registration tax that you must register for.      

LLC pricing starts at $199 for most states and it includes all llc documents required to run an llc for your online business.