Ask HN: Solo app-developer, to incorporate or not incorporate?

https://news.ycombinator.com/item?id=4980950

by iaw • 14 years ago

6 7 14 years ago

news.ycombinator.com

So I'm working on an iOS app that could bring in a fair amount of revenue (compelling product with no direct competitors).

What I'm trying to ascertain is whether it makes sense to try to incorporate/start an entity or to publish as an individual. Anyone with some experience on either end care to chime in? I don't ever expect this project to go beyond me and the single app.

slater2• 14 years ago

I was always under the assumption that you should incorporate, if only to avoid (some?) financial risk if Patent Troll Company #981271 comes forward with a "Method or Apparatus for [whatever your app does]" patent and sues you for $bajillions$

slater2• 14 years ago

(IANAL, tho)

iaw2• 14 years ago

Thanks. That's the impression I'm under as well and there will be a small risk of litigation that I've already recognized.

The problem with incorporating is that I've heard that the legal shielding properties of corporate (or llc) status are not that protective for sole-proprietors and that the company's liability is still the owner's liability.

thejteam• 14 years ago

Depends on how big the potential judgement is. If you are looking at small numbers, then nobody is going to go through the work to prove you personally liable unless you really screwed up and made it easy. If you are looking at 10 million dollar judgements... if this is a risk buy liability insurance.

yurka• 14 years ago

A couple years ago I wanted to publish an iPhone app under a business name but I was a solo developer with no clue about the legal aspects of starting a business. In the end what worked best for me was registering a DBA / Fictitious Business Name, which for a modest fee and a trip to downtown allowed me to pick a business name to use in the app store.

If you go the single member LLC route (which I found in my case was overkill), note that California has an $800 minimum tax. If you register in Delaware and want to do business in your local state (e.g. open a bank account), you'll probably have to register as a foreign corporation and pay any applicable local taxes in addition to Delaware's fees.

iaw2• 14 years ago

Thank you. I think a fictitious business name may be the best route for me, I don't know if I want to throw the cash at creating an entity if there isn't a clearly defined benefit.

nanijoe• 14 years ago

I would publish the app first and see what the returns are like, before I worry about incorporation.."A compelling product with no direct competition" , usually means the product is not-quite-so-compelling

Ask HN: Solo app-developer, to incorporate or not incorporate?

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