I am curious if I need a business license or permit for an online Social media Startup company?
I am located in California and applying for a LLC through LegalZoom and it asked me if I needed a business license for my LLC.
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Cities in California and unincorporated areas may require their own licenses and different types of industries require additional licensing, such as a license to sell medical services, food and beverages, insurance, pharmaceuticals, etc. If your social media site does not exist for buying or selling anything that requires a special license then you probably do not need this license to operate your website.
If your business model is to profit through third-party advertisements such as Google Adsense then you may be classified as a commissioned sales agent or a subcontractor and not have to register a company and apply for a business license. If you do decide to register an LLC then you probably do need to obtain a city business license.
An LLC will offer you personal protection from liability, but a lawsuit can still get access to your personal bank account through a process known as "piercing the corporate veil." In order to avoid this, avoid commingling funds from your corporate account with your personal account. In other words, don't withdraw from your corporate account to pay your personal bills. If you do need to withdraw money from the corporate account then document it as either paying yourself a dividend or paying yourself salary.