Usually when I talk to people about making games, I will say that I have plans to start my own game company. In general, I had the idea that I would start out by filing as an LLC, which is a limited liability company. I didn’t think that incorporating was necessary or even desirable, as I would be a one man company. An LLC allows me to keep it as simple as a sole proprietorship while getting the liability protection of a corporation.
Which is all well and good, but I haven’t really been doing anything about it. I can’t always plan to start my own game company. At some point I have to actually start it. Looking at my written goals, I don’t see anything that says, “Incorporate GBGames by MONTH DATE, YEAR”.
I think the reason why I didn’t put it up as a specific thing to do is because I just assumed I would handle it when I had games to sell. Why create a formal company when I’m still trying to make something for the company to make revenue from?
Then a friend of mine incorporated his company recently. I can see that many of his expenses can actually be applied towards his taxes, many expenses that I myself have. Also, he is really kicking into gear with his business. At the moment I can take my time since nothing is pressing me to make games or try to sell them, but if I had a formal company, it would force me to actually do something. I’d get a feeling of urgency since I have a business to run. So maybe incorporating now wouldn’t be too early.
I’m not sure of the answer, so I need to update my research on this topic. Did double taxation laws change this past year? Are LLCs still the best compromise? Any reason why a formal corporation would be better? Should I form a company before a product is actually created? What responsibilities do I need to take on if I do create a formal company? There are quite a few questions, but at the very least it gives me a new set of topics to blog about. B-)