Ok, not a new game post, but curious what some might say on the topic of starting a business. What are the benefits to game designers just starting out? Is it truly necessary? At what point should someone take it into consideration? What are some pitfalls?
Lets Get Down To Business
Tue, 09/24/2013 - 08:45
Tue, 09/24/2013 - 23:09
#1
Gaming LLC?
Well I guess your questions are related to owning a business or not. I'm not an American, so I don't know what the law is in the USA. However in my country we have sales tax on just about everything (with the exception of food - which does not include junk food or meals at a restaurant). So when your company is selling products, you are expected to charge and collect sales taxes for your products and services.
Typically, on a yearly basis, you must declare the company's income (for that year) and then pay applicable earning taxes which vary. Usually corporate income tax is lower than your standard individual income tax. And of course you can have deductions such as professional fees (Artists, Graphic Designers, Web Developers, etc.) and other sources of deduction provided they are in relation to the activities of the company. If you want to know the advantages of owning a company I suggest you speak to an accountant from your area so he can explain benefits for your area.
However as an individual you also have certain rights to commercial activities. And therefore you can sell, provided you declare the revenue on your individual/personal income tax. So if I am an artist and I get paid $5,000 for artwork, all I need to do on my personal income tax is state that I have earned $5,000.
The other advantage to having a LLC (company) is branding. If you publish a few games, your branding could make your future product more recognizable (because of your brand). Personally, I feel my games should be the *recognizable* brand... So I would want my "Quest Adventure Cards(tm)" to be the brand which is recognize. Yes it is a game - but it is also a brand in itself.
The other thing about owning a company is that you need to file Corporate income tax. This obviously means that you need an accountant who can do your yearly income tax (for the LLC) and complete your financial statements. Obviously because this is corporate income tax, the fees for filing (using an accountant) are usually quite a bit higher. And remember you need to file each year even if your company is *inactive* (no income earned). Add to this registration fees for maintenance of the company (which vary). So owning an LLC has additional costs especially when it comes to dealing with corporate tax.
