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mx12
Jul 3, 2010, 09:28 PM
So I have started writing an app and I am planning on selling it on the app store. My question is that I'm in college and I was wondering if I should start an LLC or other type of company to sell the app, or just use a personal account. It will more than likely be just me, but I may hire a friend or two to design the icons and other things. Any thoughts? This is my first time writing and sell my own software, and any advice would be helpful.



IronLogik
Jul 3, 2010, 09:44 PM
So I have started writing an app and I am planning on selling it on the app store. My question is that I'm in college and I was wondering if I should start an LLC or other type of company to sell the app, or just use a personal account. It will more than likely be just me, but I may hire a friend or two to design the icons and other things. Any thoughts? This is my first time writing and sell my own software, and any advice would be helpful.

It's always helpful to separate out taxes and such by using an LLC. This way your finances are separate from business finances. Removes liability in case of infringements on software patents and such as well (well, it makes the LLC liable, not yourself).

It does require a tad more in the tax department. But if you pick up a number of books you can figure it out. Do some research on it and you'll see there are clearly pros and cons. Hopefully others will have some suggestions on where you can look for more info.

mlts22
Jul 5, 2010, 10:31 PM
It's always helpful to separate out taxes and such by using an LLC. This way your finances are separate from business finances. Removes liability in case of infringements on software patents and such as well (well, it makes the LLC liable, not yourself).

It does require a tad more in the tax department. But if you pick up a number of books you can figure it out. Do some research on it and you'll see there are clearly pros and cons. Hopefully others will have some suggestions on where you can look for more info.

You might also find a LLC may benefit you in the US, tax-wise. You can charge off expenses such as your developer membership, Macs, iPhones, and other items.

The biggest thing to remember, if using a LLC for protection, is to keep business accounts and personal ones separate. If they mingle, and later on the LLC gets sued, a judge may be able to "pierce the corporate veil", and make you personally liable, as opposed to just the corporation.

Disclaimer: IANAL, IANACPA. Check with someone who knows tax and corporation law to make sure because tax laws change yearly, and what might have been perfectly legit deduction wise one year may not be the next. There are some sticky issues like who should own hardware (the LLC or you) that also vary from state to state.