Forming a legal business (in Colorado) was the easiest step in the process of starting Glow Word Books. It didn’t require brainstorming for names or much of anything aside from a payment.
I took an accounting class in college and was vaguely familiar with different business types. I knew a corporation would involve more tax paperwork than I wanted to do.
I wasn’t interested in a Partnership (or Sole Proprietorship) because all of my personal assets (car, blue hoodies, self portraits) would be up for grabs if you decided to sue us over this blog post. So we settled on a LLC. It protects all my personal possessions from business lawsuits and has much simpler paperwork than a corporation.
In retrospect the LLC tax forms (IRS 1065) are still really complicated. We could have paid roughly $450 to have them done, but I donated a lot of frustrating March nights instead. Be careful how many LLCs you setup or your Marches become quite depressing.
We didn’t have to mess with State Sales Tax IDs since all of our sales happen over the internet.
The final bit to setup was our EIN (a “social security number” for a business). It was easy to do online and I got my EIN immediately. (But it’s the first website I ever saw with hours of operation!). Even though there was nothing I could do with an EIN (aside from open a Business checking account), it was still hard to sleep after setting everything up.