I'm in the preliminary stages of putting together a business closely rooted in crowd funding. At this point I'm looking at options for managing funds. I would like to lay out my plan going forward and have people pick it apart so to speak from a legal and realistic perspective.
The first thing I plan to do is create a LLC for this new business. I believe it is relatively inexpensive to set-up a basic LLC for the protection provided if things don't quit work out. Once that is done I than plan to open a separate bank account associated with the business. Now in regards to processing payments my thoughts on that are Paypal. From my research it seems pretty straight-forward and easy to create a business account once a tax ID is obtained from forming an LLC.
So I guess my major question for a business that will essentially amount to people purchasing credits and using those credits to buy something else for others does this all seem like the correct route to take from a business perspective? I would think that if I don't set-up some type of LLC that the business would not be legal and I could be personally held liable for customer losses, correct? Where as, with an LLC the business can only be held liable, so people wouldn't be able to come after personal assets, right? Not that I'm planning on failing or anything but it is always better to be safe than sorry.
Reading up on this some more I should probably mention that I will be the sole owner. It seems like there are some changes in tax rules and what not with a single owner.