Share and Share Alike
So I am finding out there’s a lot more to starting an ecommerce company then just throwing up a website. Take corporate structure for example. Neither Mike nor I want to expose ourselves if someone gets a bad pickle and sues us. Get your mind out of the gutter, we don’t mean expose ourselves as in, “weird guys in trench coats”, we mean expose ourselves as in, “if somebody sues us they can take our personal assets as well as our company assets”. Being reasonable people, we also wish to share in the pickle spoils in a fair way. What does this mean for little old Pickle of the Month? It means we need to incorporate!
Incorporating solves both of these issues.
- Incorporating creates a legal entity that will protect our personal assets. Not that we have a whole lot, but it’s comforting to know that if we get sued, I won’t lose my collection of rare beer shirts, and Mike’s signed Arrested Development DVD set remains safe. Johnny Law will view Pickle of the Month, Inc. as a separate legal person, complete with his own bank account and collection of stuff.
- We plan to incorporate Pickle of the Month as an S-Corporation, which dictates that any money we distribute as dividends gets paid out according to how many shares a person owns. To make sure we do this fairly, Mike and I will get shares based on the amount of time and money we put into Pickle of the Month. We will allocate a certain percentage upon creation (let’s say 20%), and then allocate the rest of the shares over the next two years (let’s say 40% each year). That way whoever puts in the most time will reap the most rewards.
I’ve found this book invaluable:
It’s a plainly-written guide on how to start a corporation for small business people like ourselves.
In other news, a fine gentleman in Colorado wants to buy our www.getpickled.com domain. He’s starting up an, “everything pickled” store in Ft. Collins Colorado. Should we sell it? And who knew that pickles were so popular?