Corporate Designation

[Keith Senkowski]

I was wondering what seems to be the best route for company creation.  What is the most common form of corporation?  Might it be better to simply work as a private individual (like a freelance designer)?  Am I being too vague?

To let you know where I am coming from I wrote a game.  I have lined up and editor and artist for the cover, but I am not sure if I should form a corporation when I only plan on writing the game and then a quarterly 32 page magazine to support it once it is out there.  I am also planning on using one of the POD options available out there, though I am not sure which way to go.

Thanks
Keith Senkowski

[Ron Edwards]

Hi Keith,

Check out the thread Game company: Why? for some previous discussion about this issue.

Also, more thoughts or comparisons are welcome from anyone.

Best,
Ron

[jdagna]

Well... there is no one size fits all answer for this, since it depends on where you live, what you have, and all that.

In general, it's my opinion that you should only go corporation when:
1) you have resources (be it loans, partners, investors) that are not yours and that you might lose and not want to pay back.
2) you can actually start drawing a significant income from the business.

Stay as a sole proprietorship otherwise*.  This is particularly true because if a corporation run by one person is funded by that one person, courts may rule that the person is responsible for debts, eliminating the protection of a corporation.  Sole proprietorships are cheaper to set up, allow you to deduct more losses from your taxes, and are easier to file taxes for.

Naturally, you should really talk to a tax professional and/or incorporation specialist for the pros and cons for your particular situation.  Since there are many types of corporations, one may be what you need... but I'd be surprised if sole proprietorship wasn't the best way to go.

* Although, depending on where you live and how much you'd make, you may not need to register at all.  Check with your local chamber of commerce on that one.

[Keith Senkowski]

Thanks alot.  You guys answered my questions.

Keith Senkowski