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Ok, let say. I have created a web based application, registered a domain name, and hosted it on the Internet. Can I say it's a one man startup?

If not, then: What will it be if I just host my app on the Internet (not signing any legal documents)?

Any advantages or disadvantages?

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In what country are you? – dnbrv Apr 16 '12 at 13:00
I'm from a developing country where the business registration process is complex. If it's possible, I don't want to through all those process. (Sorry, I couldn't tell you about my country name for some reasons) – Anon Apr 16 '12 at 14:00
Can you define that country? I mean, i did businesses in many parts of the world (poland the last years, US many years ago, greece many years agom, albania short after the fall of communism) and it never took me more than a week to sort out paperwork ;) – NetTecture Apr 16 '12 at 15:07

4 Answers

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Startup is a usefully ambiguous term, spanning everything from back bedroom side projects to teams spending tens of millions. It has no legal definition - if anything it's just a mindset.

So by all means be a startup without a legal entity other than yourself!

However, when you start offering services to customers, especially if they're paying you, you may want to think about how you both protect yourself and reassure them. Most web businesses at least need some kind of Terms and Conditions statement - you can find off-the-peg sources, hire a lawyer or take a controlled risk by researching similar offerings and being your own lawyer.

And in the success case, sooner or later you're likely to want the protection of limited liability, in case it all goes pear-shaped - or in case you want to take in investment.

Even five years ago I felt very uneasy about offering services without most or all of this foundation in place. But in today's environment, with fast development and deployment, and just about every tricky thing you can imagine being available through an API out there in the wide and wonderful world, some of the best startups seem to be starting out as 'fun and value' personal projects with minimum clutter.

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Actually at least in most of europe he is not a startup without legal entity but may be an unlicensed business which the finance divisions of the government REALLY love. See, all the fines when they find out he runs a business without registration. REALLY nice. And the fun when a case order comes (shut down NOW until you sort out the paperwork). – NetTecture Apr 16 '12 at 15:06
I guess just about every answer.onstartups.com carries the implicit warning, "this may not be allowed in your jurisdiction." Clearly there's a significant step between offering a service (say) and charging for a service. Some countries still put very heavy restrictions on the latter, probably to the detriment of gross national startup products. – Jeremy Parsons Apr 16 '12 at 15:14
Ah, no - it is also for common sense. If you are registered you ahve no problem claiming backs sales tax etc. and you can hold yourself out as business whoever yout talk to. Many companies do not deal with end users. The restriction is less how ignorant peopele run illegal businesses, but how long it takes to be legal. I rarely spent significant money on that - and never used more than a day or two of my time to get registration done whenter I needed. This includes a number of former communist countries. – NetTecture Apr 16 '12 at 16:05
Thank you very much for your useful information. In my case, it's a free web application, so it should be ok to run it for a few months or a year, right? If things go well, then I will register the company. – Anon Apr 16 '12 at 16:58
up vote 1 down vote

I think its not important how you call it... but look at this definition: http://en.wikipedia.org/wiki/Startup_company

Can you see yourself there?

Basically I would say everything which has the intention to make "business" and just has started to try out its service or research the market is a start up. The term is very unclear for me and badly defined.

If you are just hosting for "fun", call yourself a webmaster. If you do a market research and think about how you can make some money with your app, call your self a startup. The term is not tied to any legal documents.

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up vote 0 down vote

In addition to what Christian said above, the answer is:

Yes.

The reason is, if you ever might have to take money, or hire someone, you're going to really want that.

Do note that this isn't legal advice, just common sense based upon issues that I've seen.

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up vote 1 down vote

I have created a web based application, registered a domain name, and hosted it on the Internet. Can I say it's a one man startup?

No, it is a dude with a website, not a business so not a startup.

Do you have a busines license? Registered as a business?

If not - it is not a startup. It may be a startup in foundation, but you can not write an invoice as business.

The moment you register as a business - it is a startup.

What will it be if I just host my app on the Internet (not signing any legal documents)?

In most cases: An illegal business. Same like opening a restaurant without proper paperwork.

Any advantages or disadvantages?

Well, except the fines the government may hit you with?

You should get a business license, by whatever means that is done in your jurisdiction, if you ever want to write an invoice.

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yes, you are totally right. Thank you. – Anon Apr 16 '12 at 13:52
I think I will host my web app(beta) as a normal website, and then if there is any investors interested in it, I will register my company. What do you think? – Anon Apr 16 '12 at 13:59
Maybe, maybe not. Doable for a blog or something - not doable for an online shop because you can not write invoices. Depends totally on what the website does. If it is feasible, this is doable. – NetTecture Apr 16 '12 at 15:05
It's a free web application, so it doable, right? – Anon Apr 16 '12 at 17:04
Possibly - otoh some juristidciotns still may require you to follow some regulations, at least in the information you publish. But yes, free web app is a lot more doable. – NetTecture Apr 16 '12 at 17:50

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