Just some really quick question for officially registered sole proprietors:
Do you need a business license if you’re working at home and plan to sell your game digitally?
If yes for above, do I need the license as soon as possible or only when I start selling my game?
I officially registered my business name recently so I can legally the name. However, I may have jumped the boat a bit too early since I don’t plan to sell my game until late 2014. I was hoping some experienced Unity members here will have answers to my question.
You definitely don’t need to do anything at all until you’re closer to complete on the game itself.
Beyond that it really depends on the country that you’re in, and the platforms that you intend to sell on (e.g. if it’s iOS you will want to get all the paperwork out of the way as soon as you’re able to).
I definitely may have jumped the boat a bit early, but I was hoping I don’t need to do anything else now until my game is closer to release. I’m from Canada, so things may be different from where you live. I wasn’t sure (and still not) if I was required to legally have a business license after I officially register myself as a sole proprietorship. But anyways, I sent an email already to my city asking about this kind of question hoping they could answer it.
About the iOS. I don’t think apple lets you do DBA anymore and that includes Sole Proprietorship. So I’ll have no choice but to be registering as an individual later.
You need to work it out before you release a product OR before you make significant purchases (ie computers, Unity license, etc). Apple doesn’t allow DBA, and they will require official materials to prove your company name if you register as a company. In US, LLC is very effective and allows for future expansion, whereas a sole proprietorship is easier, but locks you in, if you plan to have a more significant presence later.
Whether you should get a business license (or other similar things depending on your country) may be more of a legal question than anything. Which really then boils down to any advice you receive on the internet may well be worth less than what you pay for it.
That said, there are two points I think anyone considering this should keep in mind:
Is this something I’m actually going to use? Just like with models, code packages, sounds, and other parts people buy before their game really needs them, you can end up wasting time and money if it’s something you never end up getting any actual use out of. (In this case, if you realize that game making isn’t for you or that you’d rather just do it as a non-commercial hobby.)
What do your local laws require? This is something you are going to have to find out locally, either through your own research or by hiring a knowledgeable professional like a business lawyer. Laws vary widely by country and, at least here in America, vary widely by your location within the country.
In general, what I’d suggest is being aware of is how when you get your official business documentation affects your taxes and your legal protection. For instance, here I could count the purchase of a model now off of my profits next year, but only if I do things properly. If I hire someone to do some work for me before my company is a LLC, I don’t have those protections in place if they sue me for some reason.
There’s also the little things to remember about location. For instance, you might have an apartment lease that forbids you to register a business at the apartment’s address.
@Gigiwoo2, I actually never knew I was suppose to work those out before I make any software purchases. Thanks for that. I wish I could research more about that, but I’m not exactly sure what keywords to search for. I’m going to assume it’s something related to tax purposes or to save money? @Socrates, thanks for the tips!
I actually did do a great deal of research on starting up a company, so I know the basics. Then after I realized I officially registered my business name, I totally forgot I didn’t do research on what happens after I start one. So this will be an interesting experience…
I read books on small businesses, LLCs, and sole proprietorship. Even some ‘Dummy’ guides. And, even after I had learned a bunch, I still used LegalZoom for the simplicity and security of it. And I did all of this before I purchased a Macbook, Unity Pro, and an iPad. Then, at the end of the year, when it came time for taxes, I had all my ducks in a row. And we filed the taxes ourselves.
A few months later, when we realized we had made mistakes, we went to a local accountant. Those purchases were ‘losses’, and he got us a HUGE additional return - and since the gov owed us $$, there was no penalty.
Gigi.
PS - I want things that simplify my life: Legalzoom, Dreamhost, WordPress, and … of course, Unity. The 4 of them were perfect for my new business.
I wouldn’t worry about it. I’m not sure about Canada, but in the U.S. it’s not going to make a huge difference if you’re just talking about a few thousand dollars in hardware and software. It’s just for a small tax break, and in the U.S. at least, if you’re going to be a sole proprietor instead of an LLC and file as yourself, the standard deduction is probably going to be more than what you could get by filling out manual claims anyway.
