Starting an Internet marketing business should be easy enough.   Just create a website, post a few affiliate links, maybe a few emails and BAM!  Life of leisure...

---

---

  As a grown up, I realize there are preliminaries to a life of leisure.  One of the preliminaries is setting up a business entity.   There are two main reasons I want to do business as an entity and not as Dave:

1. I think people prefer to do business with a company.   A company is a little more prestigious, a little more respectable, and inspires more confidence than dealing with 'Dave'.
2. Legal protection.    I don't plan on getting sued, but if it should happen, I don't want to lose my house. 

These things don't seem too much to ask.    There are several forms a business entity can take:

• Sole proprietor - It's easy to start, but the liability is unlimited.  Unlimited? Yikes!  Income is taxed as personal income.
• Partnership- It's like being a sole proprietor, but with someone else there.  Plus you could be held partially responsible if they do something horribly wrong.  Fortunately, I'm far too difficult for anyone to want to work with me, so this option is out.
• C Corporation -  This is a full blown corporation.  There's legal protection, paper work, meetings, and lawyers.   There is also double taxation, which means both you and the corporation are taxed. 
• S Corporation - Similar to a C Corporation, but income passes through to the shareholders.  Yes, this is a vast oversimplification.  That's why you shouldn't consider this legal advice. 
• LLC- A limited liability company provides some legal protection.   Paperwork is minimal and they are easy to set up.   Income can flow through to your tax return, or you can elect to be taxed like an S-Corp.

For my situation, I considered a Sole Proprietorship to be too risky and unprofessional.  A partnership seemed even less appealing.   C and S Corporations are too complicated, time consuming and expensive for me.  If I need a full blown corporation, I'm pretty sure I can just hire someone to make it happen. So, I chose an LLC.    In Colorado,  the paperwork and expense of setting up an LLC are minimal.  It took $50 and 10 minutes online to create the LLC.  Once a year an annual report has to be filed, which is just an online form that takes 5 minutes and costs $10.   Your state may differ.  Legal protection is pretty solid if your LLC has multiple members.  Your protection is more tenuous when starting an LLC by yourself (single member LLC) .   What's the difference?  My understanding is it comes down to someone taking your share of the business.   If someone sues you and you lose, they can't take your chunk of the company because your partners did not agree to do business with that person.  The courts can't force your partners to be in business with someone else.  If you're a single member LLC however, there are no partners to inconvenience, so the courts aren't as concerned about the corporate veil.  I know, a vast oversimplification. There are several tax options with an LLC.  Income from a single member LLC passes through to your tax return.   If you have partners, you have a little extra paperwork to file.   These LLCs require 15.3% of your income to be paid in self employment tax.  Ugh...  Still, fairly simple tax wise.   An LLC can elect to be taxed as an S Corp.  This can save you on taxes, but seemed more complicated tax-wise.  I didn't want to deal with the complications, so I stuck with the plain old LLC. After a few minutes of setting up my LLC online,  I was ready to rock.  Almost.  Banks tend to want a EIN to open an account.  I think I could have used my SSN, but I wanted my LLC to be it's own entity, so... Off to the IRS website to get an EIN, which stands for Employer Identification Number.  It's basically a social security number for your company.  Again, vastly oversimplified, which is why you shouldn't consider this advice.  Anyway, after a few minutes and a few probing questions, my LLC had an EIN.  When you go to the bank, be sure to print out your incorporation documents and your EIN letter from the IRS.   The bank wants all of that stuff.   Another useful account I setup was a Pay Pal account for my new LLC.  It's free and gives me more payment options. At this point I have my business entity setup and my financial accounts setup.   They might have been setup more optimally, but they are setup, and that's crucial.   Stay tuned for what's next!