| Below are five common myths about incorporating a | | | | Not at all. Your LLC should be formed in the state in |
| website. I base this list on feedback I have received | | | | which you do business. For a home-based internet |
| from feedback from hundreds of thousands of visitor | | | | business, that means forming your company in your |
| to my website about forming limited liability companies. | | | | home state. |
| 1. You have to form a separate limited liability company | | | | The location of your website's server is basically |
| (LLC) or corporation for each domain name. | | | | irrelevant. |
| This is entirely untrue. You absolutely do not have to | | | | 4. If I ship goods as part of my internet business, I have |
| form separate entities for each and every domain | | | | to form a corporation/LLC or register to do business in |
| name your business operates under. | | | | every state where I ship product. |
| A business entity serves two purposes. One is to limit, | | | | No no no. You only have to register as a foreign |
| or contain, all liability within the entity and prevent liability | | | | corporation/LLC (by "foreign", they mean formed in |
| from "spilling" out to affect your personal assets or the | | | | another state, not corporations from outside the US) in |
| assets of other businesses you own. The second is to | | | | states where you transact business. Transaction of |
| create separate accounting. | | | | business is a technical, legal term, and it does not |
| 2. A corporation or LLC can't own a domain name. | | | | include mere advertisement or shipping of goods into |
| Of course a corporation or LLC can own a domain | | | | the state. |
| name. In fact, it's probably a good idea to have your | | | | 5. I won't be able to sell my domain name or business |
| corporation or LLC own your domain names, as it | | | | if it is owned by a corporation or LLC. |
| protects you from personal liability in case the domain | | | | Many people purchase domain names and start |
| name is misused. | | | | internet businesses with the intent to sell them at a |
| For example, you might innocently register a domain | | | | profit on website marketplaces like or Digitalpoint. |
| name that infringes on a company's trademark. If the | | | | I have been asked before if it's true that a corporation |
| company is particularly nasty, it might accuse you of | | | | (or LLC) that owns a domain can't sell that domain. |
| cyber-squatting and sue you. By having the domain | | | | That's absolutely not so. |
| registered in the name of an LLC or corporation, the | | | | A corporation or LLC can sell any asset, just like an |
| only assets this vindictive plaintiff could go after would | | | | individual can. A domain name is an asset. So is the |
| be the LLC's or corporation's, and not your personal | | | | content contained on that domain, along with customer |
| house, car, bank account, etc. | | | | lists, software, etc. Any and all of those assets can be |
| 3. I have to form my corporation/LLC in the same | | | | sold by an LLC or corporation. |
| state in which my website is hosted. | | | | I hope this list has been helpful. |