Legal question for those forming publishing companies

Luckily, most cities don't require authors working at home to have a business license, though occasionally we hear horror stories about this.

My city, like most, does require consultants, editors and others with home-based businesses to have a business license even if they seldon, if ever, have clients in their homes; my wife and I have one for certain aspects of our work. (This doesn't include what I earn from standard freelance writing or from my books because I submit work under my name and not our company name.)

Have those of you who have started publishing companies that you run out of your houses--with no bricks and mortar storefront--been required to get businesses licenses?

My concern here: if I start a publishing company ostesibly to publish my own books, then the business license requirement would (in most cities) require not only a yearly fee, but a percentage of the income to be sent to the muncipality. This could mean that profits that are not taxed at the city level now (an author's royalties from another publisher) would become taxable via the business license under my own publishing company.

How are you guys handling this? (Or are you staying under the radar?) Do the fees involved cut into your profit so that you're actually earning less than you would with a mainstream publishing contract?

Malcolm

Most of the small publishers I know have examined the situation and elected to form an LLC for protection and to be kosher.
I am not expert on this by any means, being a lifelong "under the radar" lurker... but I'll tell you who is.

This guy is a major authority on the subject and sells pdf "kits" that tell you everything you need to know about forming LLC entities in every state of the USA. You can evalutate rom his site:

http://www.stephenlnelson.com/default.htm

Cool info, Lin. Thanks!

Malcolm

Great link, thank you lin!

Tell Steve he owes me :-)

My publisher is an LLC (E-Book Time, LLC). I'm not sure what the actual percentage is, but a great many small and POD publishers I've seen are LLCs.

Malcolm, cities may not require a business license or permit, but I know that many states do.

Check with their tax or revenue departments.

Marie

I got a Wisconsin seller's permit when my first book came out and have paid sales tax on anything I sold personally within the state. This has not amounted to great sums of money and the last couple of years was so small I didn't have to pay at all.

We have a good accountant that keeps me up on these things.

A concern I have had is that "Golden Footprints Press" is my publisher on my book with Lulu. It is my own publisher which I will probably not pursue further. Only my email is listed on Lulu and my snail mail address is listed no where on the public area of Lulu, but I have gotten a couple of mailings from printers and designers to "Golden Footprints Press" at my address. Certainly my name is not difficult to find an address for, but I can't believe they would bother with that extra step.

The mental health center I owned was originally a partnership. At the time in 1985 we did not need to fill out any forms. Later we changed this to an LLC and also had an educational subsidiary that was a nonprofit. We got a seller's permit for our mini bookstore and selling self published books, so I knew that was a good idea when my books came out.

Carol