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    3 Replies Latest reply on Aug 3, 2010 4:35 PM by Bridge

    What type of Business structure is best for us?

    everwonder_y Newbie
      Hi, I have a quick few questions. I and about ten other people run an online community (forum or message-board, if you will). We have a domain and hosting but need to be set up to accept donations from members to finance our operating costs. We've had major problems in the past without being set up properly, so one person doesn't control everything and having member donations mixed up with someone's personal banking. We've also had a small legal issue in the past when our site Admin was served a Cease and Desist due to things that some members posted on the forum. Nothing ever came of the C&D as we removed all questionable posts, but we still learned from it.

      We were first incorporated in Wyoming as a C-corp, due to their friendly business registration laws and no state income tax. However, one persons name was on the corp and they would not share control. It turned into a total nightmare and ended with that person taking all of our funds and disappearing. That's where we are now. We want to set ourselves up again, properly this time so that we don't fall victim to childish power struggles and lose our donations again. We at most have between $2000-$3000 member donations a year. None of us have ever made a profit from the work we do for the community and have even sunk some of our own personal finances into it. We share a common mission and just want to become better structured organization so that we can carry out our mission in a greater capacity. Those of us who founded and administer this online community are scattered across the US (~8 of us or so). Our memberbase is worldwide (~200+). We would like to be set up where we had a board of directors, officers and protection from personal liability. We also like the community grow and one day be organized enough to be a non-profit.

      Please Help!

      Thanks
        • Re: What type of Business structure is best for us?
          FinanceOne Wayfarer
          I'm not an accountant but I have owned several businesses through the years. If your problem is trust and need protection from one person abusing their power then S-Corp and Partnerships are a way to divide everything equally. You could have a 10 person partnership where each person has a legal 10% stake in the business. Chain of command is tough in this situation because there is no "Leader" but hopefully you can work that out as human beings.
          1 of 1 people found this helpful
          • Re: What type of Business structure is best for us?
            Bridge Navigator
            Depending on the tyoe of work you do, you may want to look into a no-for-profit structure. It actually requires oversight of a board of directors.
            Otherwise an S corp should suit your needs. You may want to look into a LLC structure and them make an S corp election with teh IRS. The LLC is more flexible with ownership/distribution than a straight S corp.

            Check with a good local accountant.

            Best of luck,
            Greg