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Hi,
So, we’ve been holding out for as long as possible before incorporating our lil game development business, but as one of the entry mechanisms to the Games Ireland Gamespace, we thought we might as well get it done.
So, I guess we’re looking at a private company limited by shares.
We currently have the business name registered with the CRO as a partnership, but that’s all.
What steps do we have to take?
How much does it cost?
What are our liabilities each year?
I’ve done some research on it, but as I’m quickly finding out, what certain official websites tell you, can often be somewhat out of step with the reality.
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Thanks for the advice :)
Yeah, accountant is somewhere on the list, but we don’t really have any assets (apart from our mad skillz :P ) to pay them from or have them work with. Once we release our game in the next few months, then we might take a look, but I reckon we’re at such a small scale that we should be ok for the next few months.
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If you can get away with it, I would go down the alternate route for entry into the Gamespace. Try and release a game yourselves first without the added stress of a company.
Or if you do need a company, set it up only just before you REALLY need it to get in there, and then hopefully someone in there will be able to help direct you towards a solution.
If you are small scale though, I highly recommend staying away from the entire company thing for as long as possible
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+1 on accountants, also there is a free legal advice thing in Trinity http://www.meetup.com/Legalworkshopsdublin/
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Well we want to apply for Game Space ASAP, and our first title isn’t due for release for another 2 months at this stage, so company would be the quicker way.
Also think we might need to be a limited company to get a company name for the app store. If I recall correctly, they require an identifier number (is it D.U.N.S ?) that stopped my sole trader company name from getting on there last year (unrelated to this current company.) So, we might need to incorporate before release anyway.We’re a small operation, but we’ve big ideas :D So at some point during the year we’re going to need to incorporate, especially since I don’t fancy putting my personal ass on the line when we get to the stage where people might get suey. :D
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Sorry, was replying when you posted Andrea.
Oooh, free legal aid looks good! That was the bit we were most wary about.
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there are company formations agencies who can set up all the paperwork for a fairly modest fee, but remember incorporating means you need two directors, and also share capital (usually 100 will do), and you will then be legally liable for the debts of your company later on.
http://www.citizensinformation.ie/en/employment/types_of_employment/self_employment/setting_up_a_business_in_ireland.html has a lot of information too
re:
So at some point during the year we’re going to need to incorporate, especially since I don’t fancy putting my personal ass on the line when we get to the stage where people might get suey.[/quote:32fbb50e13]
This is where being a limited liability company is important, as it’s seen as a seperate legal entity than you, but you still have directors responsibilities, and outsourcing this is a good option so you can focus. but you just do it through revenue online, and as long as you do it in time you shouldn’t have a problem. I’d also suggest getting some accounting software like sage or quickbooks which will help you keep on top of accounts, payroll, what you’ll need to put aside for taxes etc.
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This:
Hire an accountant.[/quote:760d76cb12]
Most software and tech entrepreneurs who want to start business for the first time are not very good at running one. As soon as you can hire an someone to run the business for you, do.
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:D I hear ya RedXIV… but even with zeroes the paperwork has to be filed… so I reckon on average its gonna cost more than 150 quid! Again, if ya have someone to do it for 150 please pm the details :lol:
But on a more serious note, Ltd might be more hassle, but if ya dont mind the extra costs, its the way to go in my opinion..
… a good accountant should pay for themselves!
I also presume you guys might want to go for funding.. maybe CSF, in the future.. then its always good to have this in place for share allocation etc
Just my 2cnts
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If you are a small studio with 0 income, raise some money by getting the team to do a few small web design/database or work for hire projects for a month or two and then use that to fund the work on a game for a month or two.
I know a few people who are using this model right now to bootstrap things.
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If you are a small studio with 0 income, raise some money by getting the team to do a few small web design/database or work for hire projects for a month or two and then use that to fund the work on a game for a month or two.
I know a few people who are using this model right now to bootstrap things.[/quote:a0214dfe3d]
Just to point out, that this is what we tried to do also. We learned a huge amount from setting up a games company, unfortunately most of it is what NOT to do. While this may be a good idea in theory, we found ourselves getting dragged into project after project with no time for our own stuff. Worse yet we even agreed to a project with a payment of "half the profits". NEVER EVER TAKE THIS PAYMENT PLAN!!!!
I don’t mean to come across as overly negative, I just don’t want people making the same mistakes we did!
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If you are a small studio with 0 income, raise some money by getting the team to do a few small web design/database or work for hire projects for a month or two and then use that to fund the work on a game for a month or two.
I know a few people who are using this model right now to bootstrap things.[/quote:8846263e17]
Yeah, it’s a handy thing to say when you’ve got that sort of background, but the majority of our team don’t.
We’re already stretched timewise doing part-time jobs to fund living (the usual pains such as rent and food.) I’ve spent the last six months doing just that sort of web dev contract work, and while I was able to scrape by on it, it didn’t generate enough extra to invest in a company. Plus I’m still chasing down clients for my money.
It kind of seems counter-productive to work for two months before dedicating two months to the game, where at the moment we’re giving three days a week to the game. Much of a muchness, except taking two months off means an end to blog updates and progress publicity. -
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Hi,
I don’t want to step on anybody’s toes but… here you’ve got some good advice and some really misinformed one. So consider this: if you are a legal partnership you are good already. Incorporating makes things more difficult and you can just leave it in case you actually need that. When do you need incorporating? Well… easy: when you see some money running in. With money come also difficulties and taxes, so at that point (on only at that point) do incorporate, so your taxes will be almost erased and your liabilities as well, because the members of a limited liability company are not liable in person, but only via the funded shares. Never incorporate an unlimited liability company! Banks love that because they can come after yourself as an individual to recover money in case the company can’t pay a loan. So botton line, do not incorporate unless there is money flowing (or you got a startup funding) and always incorporate as a limited liability company ;)
And when you get there… do appoint an accountant and an external secretary, or you will get in troubles with all the paperwork that entails running an incorporated company.
-Pino
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the members of a limited liability company are not liable in person, but only via the funded shares.
[/quote:276e42f58d]This isn’t entirely true – If you try seeking a business loan from a bank I understand they will often get shareholders to give up some limited liability before approving a loan.
Banks love that because they can come after yourself as an individual to recover money in case the company can’t pay a loan.
[/quote:276e42f58d]I am sure that a determined bank will attempt to recover their money by any means necessary, limited company or not.
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I agree with DFTGames in the sense that you shouldnt incorporate unless you have to. There are pros and cons of partnership, sole trader, ltd company.. but depending on your own circumstances… so you need to look at yours and decide.
Alot of the advice offered so far is typical of a "ltd or not" discussion thread.
We all know Ltd is more hassle and costly to manage…. so having incoming revenue helps alot! If client work is not something you guys plan on doing as it eats into the development time of your own IP, then you probably wont have any income until the game is released and it makes money (hopefully). You may look at a period of client work then… when you have a published title under your belt.
Reading your original messages, you mentioned you need to incorporate to enter Game Space…. and to get a Company App Store account
For Game Space, you could go the "have released a game" option to apply for space… but from what I gather, you want to apply now, before you have released your first game… so that pushes you toward the Ltd route.
You also mentioned the App Store issues with company names as sole trader, you are correct, this is not possible. This is "informed" advice…. as I have just been through this very recently myself.
So, bottom line, whether Ltd is more expensive or not, whether you have revenue or not, if you dont want to use an individual name as publisher on the App Store and you want to apply for Game Space before you release your fist title, seems to me the decision is made for you… .
I hope this helps…
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Small correction to the above info: no need to incorporate for the App Stores.
We are a family business (not incorporated) but we are on all the App Stores (Apple, Amazon, Google, Nook, Microsoft) as a company, because they do see the partnership as company as long as you have a registered business name.
Behind the scenes I’m the one that has registered the business name and fetched the ITIN from the IRS so to get an EIN as DFT Games. Bottom line, we have all the benefits of a company but none of the incorporation hassles (anyhow we’ll incorporate this year to reduce the tax burden).
-Pino
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Sorry DFTGames, I put Partnership/Ltd Partnerships in the same box as LLCs…. when referrring to the App store Company Dev Accounts.
I viewed partnership as being hassle too.. so I would just skip and go LLC. Like you imply, if you make money, LLC has advantages.
I found this an interesting read when looking into this myself.
http://www.mhc.ie/fs/doc/publications/Irish_Tax_Review_Gavin_OFlaherty_Muireann_Brick_April_09.pdf
I am no expert on it, and you have found it a good choice… I’d be interested in hearing the pros and cons of Partnership vs LLC from you guys
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I’d be interested in hearing the pros and cons of Partnership vs LLC from you guys[/quote:d1097ac2f2]
Well, from where we stand the sole difference is tax related because we are a family, hence all the hassles that might come from partnering with other people do not apply ;)
Taxwise partners are treated as individuals, all self-employed, so in the PRSI Class "S" (a bad class indeed!) and all net income is taxed at the income tax rates.
Incorporating you can avail of the corporation tax rate (way lower!), and the company can hire the members to cover work tasks (because shareholders have no obbligation to actually work in it unless they have decided so in a separate financial agreement). So, being hired, the members are in the PRSI Class "A". Most of the expenses related to the trade are deducted by the company itself, and having now a few years of tax exemption (tied to the employed amount of people) so if there is enough money flowing in you really want to incorporate ;)
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Small correction to the above info: no need to incorporate for the App Stores.
We are a family business (not incorporated) but we are on all the App Stores (Apple, Amazon, Google, Nook, Microsoft) as a company, because they do see the partnership as company as long as you have a registered business name.
Behind the scenes I’m the one that has registered the business name and fetched the ITIN from the IRS so to get an EIN as DFT Games. Bottom line, we have all the benefits of a company but none of the incorporation hassles (anyhow we’ll incorporate this year to reduce the tax burden).
-Pino[/quote:0761bd50ea]
Did you have to get a D.U.N.S. number? Seems to be a requirement for the App Store (though I’d be happy to hear otherwise) and the D.U.N.S. number is for separate legal entities. Not sure if a partnership is a separate legal entity. We’ve registered the business name as a partnership but the D.U.N.S. is still a no-go AFAIK.
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Did you have to get a D.U.N.S. number? Seems to be a requirement for the App Store (though I’d be happy to hear otherwise) and the D.U.N.S. number is for separate legal entities. Not sure if a partnership is a separate legal entity. We’ve registered the business name as a partnership but the D.U.N.S. is still a no-go AFAIK.[/quote:a63ca95571]
The DUNS number requires company registration via the CRO.
It takes about 5 working days AFTER you have completed company registration. I would apply via Apple’s online form if you are as it works far better than the one of the D&B website.Apple will allow you to convert from a sole developer account to a company one once you have a DUNS number. It requires contacting their support and can take a few days but I have seen it written on the internet that it is possible.
With regards to company registration, I would suggest you do things properly from the start. I ignored some advice early on about this and am already regretting it.
You should have a clear shareholders agreement in place and a list of the hats people have to wear. Also unless you are registering for Tax (i.e. are buying or selling stuff today) you can do it yourself via ROS using the TR2 form.
For VAT you will need an accountant, but it can wait until just before you start trading.
As for the GamesSpace, fair play and good luck. I would imagine that there is some competition for spaces in there right now. If you will be looking for potential investment then service contracts are not the way to go. Investors (as hard as they are to find for Games content companies) will want you to focus on the products you own, not someone elses.If you are just using them as a means to an end then there has already been some great advice, but I would also suggest that if you are not already familiar with it, you should maybe get some Project Management training (free online or paid if you can afford it). There are a few basic PM skills that people often forget (have even seen some very experienced PM’s neglect to follow them) that will make your life easier.
One of the better ones is making sure your clients sign a Project plan for the project which states the milestones clearly and the feedback loop structure. So much time gets lost by the back and forth of feedback so if you lock down the process early on it will help.Best of luck to you.
If you require company set up there are a number of them online, but I would refer you to the ones that helped us:
http://companysetup.ie/
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