Incorporating You

Written by Elena Fawkner

Incorporating You

© 2002 Elena Fawkner

Running a business involves risk -repparttar risk thatrepparttar 117757 business may either succeed brilliantly or fail miserably. Or neither. The upside is high -- financial and (perhaps) time freedom; independence; unlimited earning capacity. The downside is equally steep, just inrepparttar 117758 wrong direction -- potential financial ruin if you've staked everything you own on your business's ultimate success and thrown your career down repparttar 117759 proverbial to boot. If you're running your business as a sole proprietorship or a general partnership, make no mistake -- everything you own is onrepparttar 117760 line.

There's a lot that can go right and wrong in a business. A lot of it out of your control. Butrepparttar 117761 extent of your personal financial liability for what goes wrong is one thing you can and should control.

The answer is to form an entity separate from yourself to run repparttar 117762 business.


As you probably already know, you have several choices when it comes to your business entity. The most basic is a sole proprietorship, followed by a partnership (general or limited), a limited liability company ("LLC") and a corporation (either a general "C" corporation or an "S" corporation - more about these later).

Although sole proprietorships and general partnerships are relatively straightforward and inexpensive business entities to establish and maintain, hence their popularity, neither of them protects you from personal liability.

If you're a sole proprietor, you've probably made this election by default - by doing nothing other than starting a part-time Internet business out of your spare bedroom, most likely.

A limited partnership will protectrepparttar 117763 limited partners from personal liability beyondrepparttar 117764 extent of their capital contribution torepparttar 117765 partnership, but limited partners cannot participate inrepparttar 117766 management and control ofrepparttar 117767 business so that's not a good option for most of you reading this article. Needing to control and manage your own business is most likely non-negotiable.

As an attorney, I generally recommend that small business owners, including (especially!) home-based and Internet entrepreneurs, incorporate at least as soon as they are generating sufficient profits fromrepparttar 117768 business thatrepparttar 117769 amount of tax payable on such profits equals or exceedsrepparttar 117770 minimum franchise tax payable inrepparttar 117771 state in whichrepparttar 117772 business is being conducted. In California, for example, one ofrepparttar 117773 most onerous states inrepparttar 117774 U.S. when it comes to taxes,repparttar 117775 annual minimum franchise tax is $800 per year. Therefore, as soon as you're generating profitsrepparttar 117776 tax on which is $800 or more in a year, there is no tax disadvantage to incorporation and every advantage.


Quite simply, when you form a corporation (or an LLC), you're forming a separate legal entity. This separate legal entity hasrepparttar 117777 power to enter into contracts, own and dispose of assets, hire and fire employees and generally do anything that a sole proprietor could do. The difference betweenrepparttar 117778 corporation andrepparttar 117779 sole proprietorship, however, is that onlyrepparttar 117780 corporation's assets are at risk, notrepparttar 117781 owner/shareholder's (beyondrepparttar 117782 shareholder's contribution to share capital, that is).

Let's take an example. You run a part-time Internet business. You're still working a day job and this is really just a way to make a little money onrepparttar 117783 side to save for your annual Hawaiian vacation and even more expensive spa stay for your dog while you're away. To you, this is only a pocket-money venture and so you don't really think of it as a business at all, really. So you don't give a second's thought torepparttar 117784 fact that you're running a business as a sole proprietor.

You register a domain name that, unbeknown to you, violates a Macrohard trademark. You create a website for that domain and, lo and behold, overnight (of course, because this isrepparttar 117785 Internet) your business becomes successful beyond your wildest dreams due, in no small part, to site visitors mistakenly believing they are doing business with Microsoft's arch-rival.

Macrohard, meanwhile, sees all of this and figures your gain is its loss and sues you for an account of profits based on your misuse of its trademark. And wins. It gets a judgment for $100,000. Then it executes on its judgment. And you lose your house, your savings and your business.

Now let's look at a slightly different scenario. You're fortunate enough to have read this article before you established your business and formed an S-corporation, Hawaii Here We Come, Inc. The only asset of HHWC, Inc. isrepparttar 117786 domain name and website. So, when MarcoHard gets its judgment against HHWC, Inc.,repparttar 117787 only asset it can touch isrepparttar 117788 domain name and website. That's bad enough, of course, but you did, after all, violate their trademark. But get this. Because they're in your name, not HHWC, Inc.'s, you still have your house and your savings.


Merely incorporating is not enough to avoid personal liability, however. As a director and shareholder, you must run your corporation or company (if an LLC) as a separate legal entity, NOT your alter ego! This means you can't just siphon off cash fromrepparttar 117789 corporation's bank account to pay your house mortgage.

Can A Network Marketing Business REALLY Be Run Exclusively Online?

Written by Elena Fawkner

Can A Network Marketing Business REALLY Be Run Exclusively Online?

© 2002 Elena Fawkner

For many people,repparttar words “network marketing” or “MLM” (multi-level marketing) conjure up images of hitting up your so-called “warm market” (those two or three hundred people near and dear to you as well as those unfortunate enough to have crossed your path at some time inrepparttar 117756 distant past) and pleading, cajoling, persuading, arguing and plain pressuring them to join your program. Or organizing house parties and presentations to make your pitch to a captive audience. Or having to approach complete strangers while standing in line atrepparttar 117757 supermarket.

Any or all of these options may be unpalatable to you, and for good reason. They certainly were to me. But what if you didn’t have to do any of that? What if there was a way to have people approach YOU to join your business rather thanrepparttar 117758 other way around? What if you didn’t have to hold face-to-face meetings at ALL? What if you didn’t have to make a single approach to someone you know? Or to someone you don’t? Would you think differently about network marketing then?

Well, there is such a way. Running a network marketing business usingrepparttar 117759 Internet.

I’ve heard many people say that it’s just not possible to run a network marketing business exclusively online. Well, I’m here to tell you different. Because I’m doing it and if I can do it, so can you.

Before I tell you a bit more about how a network marketing business can be run exclusively online, let me clear up a couple of possible misconceptions. First, running an online business does NOT mean creating a website and then sitting back expectingrepparttar 117760 business to run itself. You will work every bit as hard in an online network marketing business as you will in an offline network marketing business. This is just a different method, that’s all.

Secondly, when I say “exclusively” online, I mean that’s where your lead generation and prequalification work happens, it does NOT mean you will never have to pick up a telephone and speak to a real, live person atrepparttar 117761 other end.

OK, so what’s involved in running a network marketing business online then?

The first thing to understand is that network marketing, just like Internet marketing, is a numbers game. It is for this precise reason that network marketing is IDEALLY suited to being run online. Why? Because ANY Internet business is a numbers game. Just ask anyone with a web site what their focus is when their web site is up and running. It’s traffic. It’s getting as many people to their web site as they can because somewhere inrepparttar 117762 range of 2% - 4% of site visitors will click on a link that, in some fashion or another, can generate revenue forrepparttar 117763 web site owner. Of those 2% - 4% of visitors who click onrepparttar 117764 link, however, only 1% or so of THEM will go on to buy after clicking onrepparttar 117765 link. Ergo, with such tiny response rates, high traffic is repparttar 117766 name ofrepparttar 117767 game. The same principle holds true for your network marketing business.

At its core, network marketing is a simple business. It’s all about generating leads, qualifying those leads and then following up with those qualified leads until they takerepparttar 117768 action you want them to take (or tell you to stop) - either purchasing product from you or joining your downline as a productive distributor.


How do you generate leads? This depends on your starting position. If you already have an established web site and your network marketing business is a natural fit with that existing site, then you will not need to do too much inrepparttar 117769 way of additional lead generation for your network marketing business other than including a link to your network marketing company’s web site from your existing site.

But if you don’t have an existing web site, you’re going to have to start from scratch. You’re going to need to create a web site (on a subject matter of interest to people who would also be interested in your network marketing business opportunity or products), link to your network marketing company’s site from that web site, submit your site torepparttar 117770 search engines (and employ allrepparttar 117771 myriad other ways of driving traffic to it) and you’re going to have to start publishing an ezine (electronic newsletter) on a relevant subject and on a regular basis and build a sizeable subscriber list (again using a variety of different methods).

To generate significant traffic to your site and subscribers to your ezine is going to take time. Lots of it. Months, in fact. You should probably allow a year before it’s at a size that will make much of a difference.

Cont'd on page 2 ==> © 2005
Terms of Use