Hello. I have been working on a game with a friend. I was wondering, do we need to official create a company to release a game and earn income from it? If not how do we go about dealing with any money earned? Or if so, how do we go about doing this? I am really confused about this process and would appreciate any help that I could receive.
If you’re in a partnership with a friend, I would definitely recommend making it an official company and getting company accounts where any revenue goes. Using a personal checking account for company revenue can be problematic for several reasons, from infighting between you and your partner if he thinks you’re misappropriating funds, to potential tax issues.
does the game earn more than enough money to be wasted on a company ?
Talk to a tax accountant familiar with the laws of your country. First meeting and advice usually is free, but better ask beforehand.
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I agree with Martin_H, talk to a professional familiar with the laws of your country. Do you NEED to have a company to release the game? No, you do not have to. You can release it under your own name, or the other person’s name - but that has legal ramifications. In USA, you can do business as a DBA - basically it is you with a business name. Since there are 2 of you, if you were in USA (are you?) I would recommend registering as an LLC (limited liability company). It is pretty easy to do, at least compared to the other alternatives.
Thanks for your replies! I do live in the US. We now have 3 people in our group. The other is in India. Does this change anything because he lives in a different country?
I am not a lawyer, but, yes, I do recall that when filling out LLC paperwork there is a section about having foreign members. It is allowed. I don’t have any foreign members so I am not sure what more is needed, but I do know that an LLC can have foreign members in it. This is for foreign citizens, if the individual is American my understanding is it doesn’t matter where they are living. There are some sort of residency requirements for the LLC (like someone has to live in the state the paperwork is filed in)
OK thanks for your reply. I will look into this!