Starting a Business for Browser Based Game

[darkruler89]

Let's just say the game is done. Would you have to register a business for making revenue or for tax purposes. I'm working with a few of my friends on this project so this would most likely be a partnership llc? What are some steps to go about when that stage comes?

[pirategaspard]

I just went through a similar situation with a few friends. Three of us took a long term gig managing a website for a client. We wanted a legal entity to protect us. But after researching our options the cost for forming a real legal business upfront was not worth the price and as web developers working from home it didn't offer us any benefits. We decided to file separately as sole-proprietors each claiming 1/3 of the total income for tax purposes. 

My understanding is that a LLC or corp allows you to write-off business expenses and legally protect its owners. The legal protection only works well if you're a big business, otherwise the corp owners can still be found personally responsible. And the ability to write-off business expenses (such as hosting) are only useful if the expenses you can write off are greater than the cost of setting up the business (such as office space rent).

IMHO until you actually make a large amount of money, or the business wants to write off assets, it is not worth going through the legal work to set up a company upfront. Instead parties could initially sign a written contract spelling out how responsibilities and asset ownership will be divided and work from that contract until such time that the business grows to a point that a legal business is useful.

note: not a lawyer this is all just my opinion.

[Chris]

Depends on income level and on country legislation (just contact your local goverment institution, preferably fiscal one, and ask what level of income exempt you from registering a business). In a long run you will have to create a company, also it can be a bit handy since some online services require you to have a company (like Facebook credits).

Note: sole-proprietors is a company (sort of , anyway it behaves like a company and gives you benefits of one). Starting any higher level company type is unneeded and not benefitial at the beginning.

[Kyle]

I've always written off my business expenses for my online stuff as a home business (option in turbotax). That's how I dealt with my income as well.

Since I did qualify as a home business I was even able to write off any classes I took at my college related to furthering my computer skills as well. Along with a 45 cent per mile credit for the miles driven to and from those classes.

Lesson learned, get a job in college and be poor, and pay your taxes...MAKE a job in college and you're set. Just make sure you're going to college for something related to your home business.

Nowadays I don't have much income from online at all (like none ) so I just file like normal.

[capturts]

Yes, but as Chris pointed out: it depends on the country you are in.

[Kyle]

Yeah that is a factor I failed to consider.