I’m one of those crazy developers who vanishes into the wilderness for a few years and develops a game, only to find at the end I have to deal with the real world again. So, I’m hoping that some of you brave trailblazers have done this next part before… because it’s new to me.
To publish and earn money from a Unity game, should I start a company first and have the money go into that? What do people do?
Assuming I need to start a company, like a private limited company, what’s a good territory to put it in? I’m a UK citizen living in France, and I’m not sure what my options are. My French sucks so if I can pay my taxes somewhere in English that would be sweet I’m open to any suggestions.
Thanks in advance for any experiences any of you can share. This will actually be my 8th published title, but all my previous games were published when I worked at a large company in England and I had a salary there. I’m hoping that going indy will be as successful as it’s been fun, but to make it I now have to learn how to get my affairs in order. Help!
This will ideally need to be replied to by someone in the UK or France. I’m in the USA, but I’ll share what I did in case it helps.
I had written a book which is self-published on Amazon Create Space, and also had made a couple of asset store assets which were starting to sell. So my income from this was starting to exceed the minimum requirements of US law, ie anything over a few hundred $$$ and you have to start paying taxes on it. At first I was claiming that income on my personal taxes as self-employment wages, but this was a bit messy. It’s better if you can keep your business stuff separate from your personal stuff.
So given that I anticipated continuing to make an income this way, albeit fairly minimal still at the moment, I opted to start an official legal company. I initially did some research to learn via some books - here Nolo makes some great books about taxes and starting businesses. But it still seemed daunting so I put it off a lot. But then I couldn’t ignore it. I went to an certified accountant who was going to do our personal taxes anyway, and he offered to help set up the company for me. So I paid him a small sum to start the company. Pretty much all I had to do was decide on a name for it and what type of business entity it would be. Here in the USA they have a Limited Liability Company which is different from being a sole proprietor, whereby the company is legally separate from my personal finances. This offers a certain degree of legal protection or barrier should someone be unpleasant and try to sue for some reason - the LLC protects somewhat by allowing the company’s money to be sued for but not my personal money. Hopefully that never is something anyone has to deal with but I felt a bit better about taking some of the risk away since I am the family breadwinner and support my wife who cannot work.
So it was pretty easy to go to an accountant, get them to start the company for you and pay a small fee to be mostly free of the burden of having to figure out how to do it. Their experience is invaluable. It doesn’t mean you don’t have to learn about business and taxes and trademarks and other stuff pertinent to what you do, but it made the process a lot easier for me. If you anticipate making money from your ventures then you probably want to set up a proper company based on whatever is best suited to your needs. I presume that being a UK citizen you could register the company in the UK even if you operate it from another country.
I will say also that there can be a tremendous sense of self empowerment by setting up an official company and getting a business bank account and having everything legal etc especially if you have always worked for other people and dream of independence.
I’m in the US and I’ve been wanting to start a small company/business. I want to wait till I actually have a larger product to present such as a game. Can you use Legal Zoom to set it up instead of having to track down an accountant (which I have absolutely no experience in dealing with). Also what do you do about the Federal Tax Returns? I have a job so I get the usual W2 but if I have my own business but I’m interested if you know what to do about that.
Ok, I have a small company based in the UK so this is the situation if you’re based in the UK.
You don’t have to set up a limited company and unless you’re there’s the possibility that your business will have liabilities its probably not necessary.
You do have to register as self employed with the tax people (HMRC www.hmrc.org.uk) and submit “self-assessment” tax accounts.
You can get an accountant to do this for you but if you can work a spreadsheet its not that difficult to do yourself. HMRC run pretty good courses which can get you up and running pretty quickly.
The most important thing is to keep a record with reciepts of any money you’ve spent on the business so you don’t have to pay tax on it.
You don’t need to have a business bank account - I’ve used a standard current account, but its a good idea to have a separate account for the business so you can see what’s going in and out.
Most app store like payment systems do want you to have some kind of debit/credit card. They also like you to have a web site domain and an address, but that’s about it.
Really not sure about the implications of living in France and registering in the UK. My gut feeling is that to register in the uk you have to be living their for at least 6 months in the year but you would need to check with an accountant or HMRC.
Going to an accountant is EASY… it is nothing more than finding someone you feel comfortable with/can trust and asking them to set up the company for you. Only do this if they have experience in doing this, otherwise find someone else. If they are experienced they will know exactly what is needed and what forms have to be filled out and how the taxes are handled and they will do the legwork for you. If your make your company an LLC then it’s like $125 for the first year and $35 for each year after that to keep it running. The accountant might cost you $70 or something. Your personal dayjob will have nothing to do with the LLC, nor the W2’s. That’s your personal stuff. You’d still need to do your personal taxes or give them also to the accountant to do for you. You really don’t need to know much since they will tell you what needs to happen. I happened to choose to let the same accountant do our personal tax return because that made it a bit simpler, but wasn’t necessary. With an LLC the company’s finances are separate from your own. If you choose to be a sole proprietor then things are different and an accountant would be able to help to tell you what to do there, or will do it for you anyway.
Ask your self the below questions and review the answers.
Do you expect to sell physical goods?
Yes: Then get an LLC. Reason being is you’ve liability with physical goods.
No: Continue to Question 2
Do you expect to expand and employee others? (this excludes contracting others)
Yes: Then get an LLC. Reason being is you’ve liability for employee action and risk (they could sue you for whatever reason).
No: Continue to Question 3
Do you expect to ever have investors?
Yes: Then get an LLC. No one will invest into a sole proprietor as record keeping and business profit proof will be mixed with personal and no investor will want to take the risk.
No: Continue to Question 4
Do you expect to ever sell your business?
Yes: Then get an LLC. No reason to explain, it’s required for ownership transfer.
No: Continue to Question 5
Do you fear risk of being sued? Is your product edging on copy right infringement of some other?
Yes: Then get an LLC. Reason being if you are sued without an LLC they are suing YOU. With an LLC they are suing your company. This means if they are suing YOU then you could have a lien placed on your house, car, etc… and lose everything… assuming you lose the lawsuit. Not this is massively unlikely to happen for an indie.
No: You don’t need an LLC and can simply be a sole proprietor.
In the US if you have no employees, but you get an LLC it’s not really a full LLC. It’s a SMLLC which is a single-member LLC. It holds, sort of, the same protections of a corporate level LLC but it hasn’t been tested in court much so there is really nothing to use in your favor. When being sued normally previous cases similar to yours are used in your defense, but in case of SMLLC there really isn’t any so it doesn’t really offer much protection. Also if your business is sued and dissolved they can still take you to civil court and sue you personally so it’s not even a guarantee of protection. Also an SMLLC tax wise is done exactly the same as sole proprietor so tax wise it’s not anymore complicated.
Personally I prefer sole proprietor with a legal alias (business name) that I do business under. It’s the appropriate path for a single person indie team. If you have 5 employees though or something of the sort you should absolutely form an LLC, apply for business insurance, create a business account, and pay out wages via W2, etc…
Thanks for the pointers so far; really helpful. I’ve been looking today at independent financial advisors - there are some English ones in France that know French and UK law and it looks like a friendly chat with one of those is in order. Registering in the UK may well be the way to go… though what as I’m not sure yet. The hardest part is probably figuring out who I need to talk to, and you guys have been very helpful with that.
just an idea but if u start up this company im sure a number of people out there in situations similar to your own would pay you the same amount as any accountant. you could advertise this as a publishing company and people with game designs are published through you. you funnel the money as a middle man situation and deal with the paperwork (for a small fee) and they reap the benefits of creating their game. maybe thats a stupid idea but having read this it came to mind
I would say, set up a Limited company in UK or similar. You will then not personally be liable for any liability; your company will. This means if something you make kills someone (yes that is extreme i know) or something you make blows up someones TV or PC etc, your personally wont be liable. Also, say you use a 3rd party assets which is unknowingly ripped off and someone sues you; again you won’t be personally liable.
If i was a plumber i would go down the route of Sole Trader, but i think for game dev, limited is a better option. Yes it is more expensive to set up (slightly) and the ongoing yearly costs are higher (slightly) but the benefits outweigh the costs. Especially when you can leave monies in the company and pay a lower corporation tax than income etc (well, it’s like this in Ireland).
Bottom line is… pay a few notes to speak to a Solicitor and an Accountant in your area… you will be surprised just how much you will learn and how good the experience will be. It’s better to know ALL the facts in advance than stumble in and have things bite you later.
Yeah you should have better to setup your company outside of France.
For what I know, taxes are high in France and too much papers to care. Horrible deal.
Try to check in UK if there is something with less constraint matching to your profile…
This is pretty true. Although there is the auto-entrepreneur status, which is pretty easy to set up, but it has a lot of limitations regarding the income you can get.
Lets be clear an LLC doesn’t instantly protect you from liability. Directors, shadow directors, or people acting like directors can be held personally liable for any number of corporate liabilities. Even more so when the company has a single share holder who is also the director.
In the end talk like all these question talk to a professional (in this case an accountant) that you trust.
Yeah it sucks.
I already applied for it when I came back 3 months in France the last year thinking the French system better than the Japanese one.
Auto-Entrepreneur is easy :
—> They take you 24% of your complete income (this cover health card, money for old age, and social stuff from French system, years taxes)
—> you cannot earn over 31 000 euros a year or you will be get extra heavy fees.
—> you cannot subtract all extra fees from hardware, software or other from the 31k euros basis.
—> I selected the monthly paid system and I have to log on their website every month to list my income. Since I prefer to pay in Japan, I just write 0 euros.
—> from a new law on this last January, if you forget to log and list your income (0 euros or more doesn’t mind), they fee you 75 euros.
I am going to wait the end of this year and maybe contact the RSI to close my account for now if I do stay Japan.
I run a company in the UK only a small computer reapir one but I registered it all myself and its pretty easy to do.
Saying that its not cheap running a company in the UK… corporation tax is 20% on anything you earn… then of course if you pay yourself a wage out of that as well then there is tax on top of that. Well thats if your a limited company, you could register as a sole trader and then just pay personal tax on your earnings…
Best do what the big companies do and start up a company in a low tax country LOL… it really annoys me how the big companies, google, amazon, starbucks and so on get away with not paying any tax.
Okay, I have some leads to follow. I’m really leaning towards setting up a private limited company just to be on the safe side. I think I’ve found someone who can help me set up, too. Thanks for all your advice, I’ll post again once I get somewhere.
edit: and of course I’ll keep reading the thread in case any more gems turn up
Get a chartered accountant, he will guide you and some even manage your business for you. Since you don’t have a business yet, you may be paying more tax than you need with a company. Talk to the accountant to find out more.
I’m open to any suggestions.