Founding company?!
by Romano Del Vecchio · in General Discussion · 02/22/2005 (1:10 am) · 7 replies
In past few months I saw many help wanted ads and dev snapshots.
There are so many companies mentioned, can you explain me how is this possible? I have feeling that most of them are just teams who are planning to evolve to company.
In Croatia for company founding you need basic budget (I think it's about 2000$), MANY forms, you also must pay founding fee, you must have office, and above all if your (small) company doesn't make profit for one year they shut you down. Last part doesn't apply for newly founded companies (and beeing fresh from college, gives you some credit), first two years are considered as adaptation.
What's the deal with so many companies? How are they founded in USA? And what's the deal with internet companies?
Help me to clear this.
There are so many companies mentioned, can you explain me how is this possible? I have feeling that most of them are just teams who are planning to evolve to company.
In Croatia for company founding you need basic budget (I think it's about 2000$), MANY forms, you also must pay founding fee, you must have office, and above all if your (small) company doesn't make profit for one year they shut you down. Last part doesn't apply for newly founded companies (and beeing fresh from college, gives you some credit), first two years are considered as adaptation.
What's the deal with so many companies? How are they founded in USA? And what's the deal with internet companies?
Help me to clear this.
#2
South africa has 12 different entity types.
These are known in most Countries...
- Sole propiertorship (Spelling)
- Corporation
- Closed Corporation (CC)
- PTY ltd (Every Country has these)
- Partnership
- Incorporated
Your countries' Deparment of Trade and Industry should help you... About that $2000... That sounds very expensive... Think you should dig more.
02/22/2005 (1:56 am)
Romano... Depends on what type company you want. They all have their positives and negatives... relating to Tax, liquidation... etc... It is different for every country.South africa has 12 different entity types.
These are known in most Countries...
- Sole propiertorship (Spelling)
- Corporation
- Closed Corporation (CC)
- PTY ltd (Every Country has these)
- Partnership
- Incorporated
Your countries' Deparment of Trade and Industry should help you... About that $2000... That sounds very expensive... Think you should dig more.
#3
Send ~$10 to the state to have your corporate name searched for in the state records, if it doesn't exist, your corporate name is reserved for 90 days.
Once you have your corporate name, write your articles of incorporation (rules of your company) which surprisingly doesn't really need to be a whole lot of information. Include your Corporate office address (must be located in the state, if you live out of the state in which you are incorporating, you must have a representative within the state). State the number of shares you're corporation will have, this can be from 1 to 1 billion trillion million. List the officers of your corporation (President, Vice President, Secretary and Treasurer) which I think needs to be at least 2 different people (might depend on your state). Send the state $50.
Once the state approves your articles you have yourself a corporation. I've heard varying statements that the IRS will let a new business lose money for 3 - 5 years. Canada is almost identical to the U.S. It's the European nations that seem to make it difficult. When I was working in Germany you needed to have at least, well at the time it, 50,000 DM (which is about 25,000 Euro. From what I understand, the money was the "Limited Liability" reserve fund. I think that way creditors new your assets were at least 50,000 DM. But like Sourth Africa, I think Germany has a large number of different entity types.
02/22/2005 (5:48 am)
To form a corporate entity in the U.S (generally speaking).Send ~$10 to the state to have your corporate name searched for in the state records, if it doesn't exist, your corporate name is reserved for 90 days.
Once you have your corporate name, write your articles of incorporation (rules of your company) which surprisingly doesn't really need to be a whole lot of information. Include your Corporate office address (must be located in the state, if you live out of the state in which you are incorporating, you must have a representative within the state). State the number of shares you're corporation will have, this can be from 1 to 1 billion trillion million. List the officers of your corporation (President, Vice President, Secretary and Treasurer) which I think needs to be at least 2 different people (might depend on your state). Send the state $50.
Once the state approves your articles you have yourself a corporation. I've heard varying statements that the IRS will let a new business lose money for 3 - 5 years. Canada is almost identical to the U.S. It's the European nations that seem to make it difficult. When I was working in Germany you needed to have at least, well at the time it, 50,000 DM (which is about 25,000 Euro. From what I understand, the money was the "Limited Liability" reserve fund. I think that way creditors new your assets were at least 50,000 DM. But like Sourth Africa, I think Germany has a large number of different entity types.
#4
02/22/2005 (8:37 am)
In Canada I think it will cost a total of about $40 and take a couple weeks to set up a Sole Proprietorship. More elaborate entities cost more and are more involved to set up.
#5
02/24/2005 (9:48 am)
Most states allow one person to incorporate a business, depending on the state the fee is more then $50 (ex texas is around $400 for class C), Corporations can loose money for the entire existance of the Corporation and still not be considered a hobby (unlike DBA), The corporation is now its very own legal intity it even has an employer ID number (EID) which is similar to a persons social security number, mycorporation.com has alot of documentation for those of you who are interested in learning more of the legal aspect of game development or just forming a corporation in general.
#6
02/24/2005 (10:40 am)
I don't have it so I can't make any personal judgement on it, but assuming it delivers on its promise (and you're in the US) the kit available at http://www.gamedevkit.com/ looks like it could be pretty good.
#7
I have three companies. Two Sole Proprietorships and one LLC. It was very simple to set up.
Sole Proprietership:
(Use your own name as the company name): Wake up in the morning and say "I'm a company." You are now a company. It's that simple. No money needed.
(Use a ficticious name): Same as above, but go register with the county clerk ($5).
LLC:
Register with the Secretary of State: $100
If you need a sales tax license then it's $20 for 3yrs.
In any case, getting an FEI (Federal Employer ID) from the IRS is free. Just file an SS-4.
Other costs that may be incurred:
Bank account setup, other business needs, etc.
Starting a business in the USA is extremely easy and cheap. Staying in business and making a profit is where it gets tricky.
02/24/2005 (3:51 pm)
It really depends upon what State you're in. I have three companies. Two Sole Proprietorships and one LLC. It was very simple to set up.
Sole Proprietership:
(Use your own name as the company name): Wake up in the morning and say "I'm a company." You are now a company. It's that simple. No money needed.
(Use a ficticious name): Same as above, but go register with the county clerk ($5).
LLC:
Register with the Secretary of State: $100
If you need a sales tax license then it's $20 for 3yrs.
In any case, getting an FEI (Federal Employer ID) from the IRS is free. Just file an SS-4.
Other costs that may be incurred:
Bank account setup, other business needs, etc.
Starting a business in the USA is extremely easy and cheap. Staying in business and making a profit is where it gets tricky.
Torque Owner Drew Hitchcock
I am not an expert on business law, but I believe that in the US it actually doesn't take much to start one. For a small fee you can get a business license, and I believe you have 4 years to make a profit. The conditions vary from state to state, but generally it's not a big deal to start one.