Any tips or articles on if I should incorporate a business for my apps or just publish as an individual?
Looking for pluses and minuses - I’ve published an app as an individual, but don’t know if that’s still a good idea if you release a really successful app.
Thy [import]uid: 42145 topic_id: 25433 reply_id: 325433[/import]
That is a difficult question. The answer depends upon your location and your personal goals.
For me, I created a sole-proprietorship for my indie publishing efforts (will probably go LLC very soon). There were 2 primary reasons that I got a business license:
I will leave it to others to discuss the merits of sole-proprietorship vs LLC vs corporation vs partnerships.
Hope that helps! [import]uid: 6551 topic_id: 25433 reply_id: 102808[/import]
This is a pretty broad topic because it impacts taxes (corporate/personal), legal liability, how Apple shows your name, banking, local licensing etc.
It’s hard to cover all of this because various cities/states will have different rules.
Being a sole-proprietor using your name is easy. Apple is happy, its just your name. You use your Social Security Number as your Tax ID for your federal taxes and there is no other federal paper work necessary. You don’t need to deal with a DBA (Doing Business As) bank account. You might not have to register/license with any state/county/city entity.
But if you get sued, you could loose everything including your house, car, etc. If you’re an LLC you can only loose the assets of the business, not your personal assets. But forming an LLC means annual filing with a state, which could trigger other licensing, like getting a state sales tax ID, getting a Federal Tax ID and if you take money out of the business to pay yourself a salary, you will have to deal with taxes on the business and taxes on yourself including withholding your SS, Medicare, etc.
[import]uid: 19626 topic_id: 25433 reply_id: 102809[/import]
For legal liability protection, forming a company is a good idea. It depends on your business (and how it is formed and organized), but you may still be able to have your business treated as a disregarded entity for tax filing purposes (and if treated that way, you wouldn’t need to pay and file payroll taxes when you take out the money from your business to “pay yourself”.)
Here are a couple of articles that may be relevant and of interest?
http://www.foundersspace.com/company-formation/llc/
http://www.foundersspace.com/business/will-a-corporation-protect-me-from-all-liability/
Naomi [import]uid: 67217 topic_id: 25433 reply_id: 102818[/import]
I’d recommend starting as an individual and getting something out there. Then come back to incorporating the company. In other words, find out if you enjoy doing this and get the experience of publishing, then go back and incorporate. [import]uid: 36054 topic_id: 25433 reply_id: 102829[/import]
Thank you for all the replies! It IS a very large subject, but these answers will help me at least get me started on process.
Thanks again! [import]uid: 42145 topic_id: 25433 reply_id: 102983[/import]
I’m in the same boat. Started as a sole proprietor but now that I’m having some success in the market considering forming an LLC. Does anyone have experience doing this?
I’m interested in how I would notify all the app stores (Amazon, Apple, Google, B&N) to change the company name, and also how this would affect taxes since some income has gone to me, but future income would goto an LLC.
It almost sounds like too much hassle to me. I’m considering just getting liability insurance coverage for my sole proprietorship and calling it good. [import]uid: 84258 topic_id: 25433 reply_id: 103379[/import]
+1 to kbradford. i would also like to know this. is it even possible to change your individual registration to an LLC after the fact (without re-registering). ie, will your existing apps transfer?
i would appreciate any input from anyone who started out as an individual, then ported all apps to LLC
[import]uid: 34595 topic_id: 25433 reply_id: 104697[/import]
Generally speaking…
Sole prop : business owned by an individual (the term DBA, doing business as is tossed around too. Using the term DBA is NOT the same as a sole prop.
A DBA is an “assumed” name that the business will utilize to do business under that name OTHER than the actual legal name.
DBA is an attribute that is also used in LLC, and corps.
Out here in California, you have a HIGH minimum tax that you pay every year. Sucks.
Sole prop in comparison to LLC you also don’t have the burden of compliance. And file annual reports, pay fees and tra la la. pay $125 to the city just so they can “confirm the address”. FUN!
Also sole prop is passthrough income. You could get fancy and say “disregarded entity” but I speak english and that term is stupid to me. To put it straight, you make income it goes on the 1040 (in most cases).
To make it more stupid and complicated (yay) you can be treated as a corp or S corp, and deal with tax returns on a corporate AND personal basis…yay more fun.
So whats not to like?
PERSONAL LIABILITY. You can literally get sued (for no reason), trolled, etc. Debts you have as a business, you are personally liable for. This is where an “umbrella policy” can come into play. But even then, you are still messing around with some unknown items.
With an LLC, you can bring people in and out, keep everything shielded and if the business fails, LLC fails and not YOU. If you are doing some kind of funding round via angel investers, series A or whatever it will be hard to provide the financials of the business for equity investors. From what I know, it lowers your value as a business because you are not “serious” enough to go at least LLC.
There is a lot of information on the subject, I am surrounded by technology lawyers and financial planners, CPAs and EA’s for the IRS. With that said, what I am telling you is off the top of my head and what I know about it.
ITS NOT LEGAL ADVICE OF ANY KIND!! Think of this as more of a cliffs note for stuff.
What is best? Not sure. I for one am all for LLC and the additional hassle is fine as if you own a house, have a family, have…other assets you may want to protect that further with the LLC and even going umbrella on top of that for good measure.
you can go to legalzoom.com or a variety of different sites and it will similar. Cross reference many sources.
Spend the freaking money and talk to legal counsel on it once you are educated enough to know what you want and make a decision!
As I said, not legal advice I’m just a guy who has friends in places. I’m also in the same boat, I haven’t formed my LLC yet as I’m up in the air about a name. That brings up another point, make sure the name you pick isnt taken. Don’t just accept something like legalzoom’s name is “available” that doesn’t mean anything really. You have to PAY to go deep and examine records across the US and other sources to ensure what you want is truly available. That way you can avoid name trolls who say “Hey bro you are using my name and now I will slap you”.
Like Dr Burton, I am a multi faceted business (future business). I am a sound engineer, involved with licensing of sounds and music. App designer, technical book reviewer, consulting, and a bunch of other things. Too many things to leave to a sole prop!
Weeeeeeeeeeeee! <:> [import]uid: 61600 topic_id: 25433 reply_id: 104710[/import] </:>