I agree, it is nice to see it really isn't that hard. But I wonder about things like how do you decide between Sole Proprietorship and LLC? I don't know the differences enough to even make an educated guess about it, is there a resource somewhere that lays it all out? Or what do most indies do? Also, at what point do people typically incorporate? Like, after the game is up and running or before you do anything else?
http://www.entrepreneur.com/encyclopedia/sole-proprietorshiphttp://www.entrepreneur.com/encyclopedia/limited-liability-companyI don't know the conditions in USA but here in Belgium, even for a sole proprietorship, you have to pass a business exam about these kind of things to be authorized to start a business, that's the bare minimum....
I have started several businesses in the US and there is no exam necessary. Requirements and the type of business formed vary from state to state, but there are some universal requirements before filing your entity. Getting an EIN from the IRS is necessary with most forms of filings although there are a limited few that allow you to use your personal SSN instead.
Changing the filing status of an entity can get complicated. The advice that I and the investors I work with always recommend is to look at what your plans are in the future and what sort of barriers might be prevented by specific types of filings. If you are planning on seeking private investment or taking on an institutional round of funding, it is important to know what is the most ideal structure to allow that to take place. Even if that is late stage or something that is not your first choice, it is worth considering things not going exactly according to plan and accounting for a plan B or C in your funding plans.
I generally recommend a C Corporation. It allows for shift in equity and is beneficial for all parties. It is a little tricky to set up initially. I don't recommend Sub S class filings. Filing as a standard LLC works as well. What is most meaningful are the details of the operating agreement. This will determine what ownership and management capacity each individual partner/owner/shareholder will have. In many cases, the absence of an operating agreement will revert all decisions rights to an equal partnership from a legal standpoint.
An example would be 3 partners - Albert, Brandon, and Charles. Albert owns 50%, Brandon owns 19%, and Charles owns 31% of the company. They have an operating agreement which gives each an equal vote in board meetings and Brandon has full operational control of the business as the President. Albert is the CEO, Brandon is the COO and Charles is the CFO of the company. Inside the agreement there are guidelines for how the business is supposed to be run and specifics about when board votes are to be called. Outside of that, day to day operations and decision making falls to Brandon. Though he has the lowest ownership, he has operational control based on the operating agreement. If they were to take on outside investment, Brandon would still remain in his positions unless a new operating agreement is drafted as part of the investment deal.
This is a very limited example and the details can get far more complex. It is important to note that doing this ahead of time and having knowledge of this is attractive to people looking to make a placement in a company. With most indie games, I have found that early stage placement hinges on the faith in the team rather than the project. Bet the jokey, not the horse, so to speak. There are a lot of business resources out there and with a site like this I am sure that there are people who can point you in the direction of a mentor, consultant or industry veteran who can help you out.
Sorry for the long winded post and the thread necro. It caught my attention and if this was addressed somewhere, I will post there from now on.