Everything about being a porn webmaster looks easy. Photos and video? They're everywhere. Customers? Zillions await your content. Affiliates? Seek and ye shall find. Right?
As everyone in the business knows, that's not the reality. Making money is hard, and you have to know more than the best price for a streaming video of Debbie Does Dubuque. Savvy businesspeople make a point of learning about everything from business licenses and LLCs to offshore trusts and tax shelters.
So what are these mysterious things? Here's a look at what you should do when you're in the business of business. (Disclaimer: This isn't legal advice, and I'm not a lawyer.)
Get a business license (if you need one)
The less City Hall knows about your home-based business, the better, right? So why announce to the world that you're the one behind HotBukkakeNuns.com?
There are some good reasons to get a business license. For one thing, there's that pesky matter of the law: If you run a business and don't have a proper license, you could be committing a misdemeanor and face fines or jail time. That won't happen, of course, if your state (or city or county) doesn't know that you exist. But anyone from a nosy neighbor to an intrepid IRS agent could blow your cover.
Another reason to get a business license is to make sure you're following the law in other ways. Some cities ban home-based businesses, at least in certain neighborhoods. I've heard that homeowners associations do the same thing in some gated communities.
You can, of course, ignore those laws. Plenty of people do. Just be prepared to face the consequences if you're caught.
Get a sales-tax license (if you need one)
If you're lucky enough to live in a state without sales tax (go, New Hampshire!), you probably don't need to worry about this. I say "probably" because the laws about sales taxes differ widely from state to state. In Delaware and New Mexico, for instance, there is no sales tax, but businesses do pay a portion of their gross revenue to the state government.
If you live in other states, you may need to get a sales-tax license, especially if you're selling tangible goods such as videos. But a license might not cost much. In Colorado, for instance, a two-year sales-tax license costs $16 plus a $50 deposit.
Decide on your business type
If you run a business by yourself and never bothered to file paperwork saying otherwise, you probably are running a sole proprietorship. This means you alone are responsible for everything, including paying debts and paying damages in lawsuits.
Let me repeat that again for emphasis: You are responsible. Not the company or corporation or whatever. You. That means your house, your car and any other possessions you might have are at risk if you get sued or owe someone money.
But you're smart and careful and you're not going to get sued, right? Not necessarily.
Let's say you hire a part-time freelancer to help out with Web design. He posts a photo of his girlfriend naked. Guess who might have to pay if the girlfriend successfully sues for breach of privacy? You.
That's not good. Experts recommend that anyone with a "risky business" - hello, porn webmasters! - become a limited liability company (LLC) or a corporation. In other words, protect thyself.
An LLC may be the easiest option. By creating one, you can put your personal assets - your house, your car, your vacation home in Boca - out of the reach of debt collectors and judges. (But if you're doing something illegal, all bets are off.)
However, plaintiffs and creditors can still go after your business assets. So don't think of an LLC as a get-out-of-debt-free card.
LLCs aren't cheap or easy to create, but you can form one by yourself. The costs will come from your state's filing fees (which can be hundreds of dollars) and any requirement that you publish a legal notice in a local newspaper. (Some states don't require you to publish a notice.) To make sure you do everything right, consider buying one of the many books geared toward entrepreneurs and the self-employed. Just follow the instructions.
If your business has co-owners, they also can become part of the LLC management and get the same protection from nasty people coming after their personal assets.
Another option is to create a corporation. This is a big and complicated step typically taken by businesses that want to bring in investors and perhaps sell stock. If you're thinking about going in this direction, make sure you have a lawyer on board.
Speaking of lawyers, a great place to find free legal information online is Nolo.com. Click on "Business & Human Resources" to get most of your questions answered.
This article initially appeared in the July 2008 edition of AVN Online magazine. To subscribe, visit AVNMediaNetwork.com/subscriptions.
