There is no legal requirement that you form an LLC (or other entity) to start a business. But here’s the $64,000 question: Do you want to have your personal assets stripped from you? Do you want to be at risk in the event of a lawsuit? Do you want to spend a lot of time and money building a business that will always be dependent on you?
If your answer to any of these questions is “No,” then you should form an entity. Take this seriously. Sketch out a business plan. Project your expenses. Don’t assume that the Internet still operates on a “build it and they will come” mentality. (It doesn’t.) According to Mashable, there are 350,000,000 registered domains, and 150,000 more are added each day. That’s a lot of noise and a lot of traffic to cut through.
If you’re not serious about running this as a business, then figure out how much you’d have to spend on it and put that money toward something else.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.