This might have been touched upon in another topic, but what are the laws for a teenager (that'd be me) owning a business and selling things? Is it any different from an adult owning a business?
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Originally posted by Brqgn:
This might have been touched upon in another topic, but what are the laws for a teenager (that'd be me) owning a business and selling things? Is it any different from an adult owning a business?
Yes.
I believe laws vary by state, but I would imagine that in the majority of states you can not own a business until you are 18. Until then you must be represented by a parent or guardian who may file for your business in your name.
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Though of course you can still sell things without incorporating. You'd need checks made out to your name instead of the "companies" name, but other than that it would be pretty much the same as if it was a real incorporated company. Unless you expect to make some serious money, I wouldn't bother incorporating at all. Just say that you're in a "company" but not do the legal side of that. Much easier.
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I say I have a company called M Cubed. It is just easier than saying me and my friends made this
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Originally posted by diddlysquat:
Unless you expect to make some serious money, I wouldn't bother incorporating at all. Just say that you're in a "company" but not do the legal side of that. Much easier.
I'd advise against any sort of earning revenues without "doing the legal side of things." The IRS has no sense of humor.
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Just to clear some things up:
If you're underage, then your parents will have to do it.
Being incorporated is just one way to have a legal company. The easiest and most efficient way to begin is to begin a company as "sole proprietor" with no employees. This is as legal as an "incorporated" company and is just as real. Go to your county courthouse, to the clerk, and ask where to go to register a new company. The clerk will know, if it isn't done right there. You'll have to pay a fee, and they'll check to see if your proposed company's name is already taken in the county. If not, then you're set. If so, then choose another name. I pay $10 every five years, just to give you an idea of the cost.
When the courthouse registers your company, then you're legal. But that means that you also have some legal responsibilities. You need to be careful about misrepresentation. That easily turns into fraud and your life turns into a mess. (No, I've never experienced it.) You also need to set up a system to get the product to the client at a reasonable time and a system to deal with problems and deal with them immediately.
Then there's taxes. Right now, there's no internet taxes (which translates into federal taxes) but there ARE state taxes. You will be sent, by the state (at least in Michigan, but I can't imagine other states doing things much differently) a packet for you (your parents if underage) to fill out. If you send a client, who lives in your state, a cd with a game on it, then you'll be responsible to keeping track of it and sending the sales tax to the state. In Mighigan, this happens in February. If your client downloads something (so a product is not physically sent to them) then there's no sales tax. I doubt that this will happen much longer, however.
As for federal taxes, you need to fill out the "C" form (I think) and pay federal taxes on whatever you, personally, pocket from your company. This is income or loss depending on how your company did.
I happen to have a person who takes care of the sending of products and keeping the books. This person is NOT an employee. She gets a percentage of whatever comes in. 25%
As for servers, there are a few companies who will host your site. Most of these companies will offer a free site, but full of popup ads. I find the basic ad-free category at the lowest price (from $10 to $15 a month, less if you pay by the year) to be quite reasonable and large enough to handle anything I have to offer. I use hypermart.net (who accepts ONLY business sites) but send some of my clients to 1-host.
I'm thinking that eventually I'll set up my own server, but only for my own business. But my business will have to grow considerably before I do that.
Hope this helps.
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-- Debra
Danillitphil Productions
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Setting up your own server is easy (or as I understand it is). All you need is to have a computer that is on and connected to the internet all the time. Then go into websharing and select your website folder and homepage. Then turn web sharing on. I'm not sure about stuff like bandwidth but I assume you'd have to contact your ISP.
As for the company thing. If you do not plan on having a registered company but do want to sell things I think that that is all right. You have all checks and thing made out to you personally but you have the company name/logo on your website and in your game.
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Pilky
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Originally posted by Pilky:
**As for the company thing. If you do not plan on having a registered company but do want to sell things I think that that is all right. You have all checks and thing made out to you personally but you have the company name/logo on your website and in your game.
**
In the U.S., it is not all right. Fraud happens when you indicate that you have a company when you do not. Fraud gets nasty when you take a person's money. The IRS gets nasty if you do not pay taxes.
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-- Debra
Danillitphil Productions
(url="http://"http://www.danillitphil.com/graphics/index.html")www.danillitphil.com(/url)
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Originally posted by Pilky:
Setting up your own server is easy (or as I understand it is). All you need is to have a computer that is on and connected to the internet all the time. Then go into websharing and select your website folder and homepage. Then turn web sharing on. I'm not sure about stuff like bandwidth but I assume you'd have to contact your ISP.
If you are keeping proprietary files on it then security becomes a major issue. If you don't know much about security then you are running a large gamble. There is a reason that there are many companies around that offer secure servers.
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Originally posted by Debra:
**Just to clear some things up:
Hope this helps.
**
Yes!!! This post has been extremely helpful to me, thank you very much Debra. I'm curious though, can you design a game under a name but not call it a company?
(You know, this sounds a lot like a registered company.... :eek:
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-The ZeroWarrior
Like what I do.
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Pilky
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You can design a game under a name but not call it a company. The name then becomes an alias for your own name. The name, as an alias, will not be a legal alias. And that opens the door to being sued and fraud charges. (edit: If you sell something.) To become a "legal alias," you'd be registering it as a company (a business).
You CAN have a website like M Cubed but know that it's a personal website. Nothing illegal about that!!! And you've called it what you will, like M Cubed, and there's still nothing at all illegal about it. You can post whatever you want on it. The sticky-wicket comes when you sell something from the website, even if it's your services that a person pays for (like making web pages, which is what Danillitphil Productions started out doing). Bottom line, if you sell anything via shipment or download or upload or anything, you need to be a business. Because our society in the U.S. highly values free enterprise, it's very cheap and easy to register your business. BUT if you're going to sell something, then you need to take the responsibility to pay taxes, maintain client needs, and to have a professional method of doing business that is cost effective.
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-- Debra
Danillitphil Productions
(url="http://"http://www.danillitphil.com/graphics/index.html")www.danillitphil.com(/url)
(This message has been edited by Debra (edited 09-16-2003).)
I know it may be different here in the UK but would giving people the option to send a check to cover the cost of a CD and shipping if they cant download a game count as selling stuff? If the check was made our to me personally then it would be legal I'm guessing.
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Pilky
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Cheesiest film line of all time "Flash I love you but we only have 14 hours to save the earth" from Flash Gorden
Of course it "counts as selling stuff." Selling is selling. You recieve money. You ship product. That's selling. What's so hard to understand? You are looking for a way to beat the system and you won't find it. You may continue for a while before you get caught or shut down, but you would be breaking laws. I'm sure things are not that different in the UK. Do some research.
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Yes but me paying you for a CD and you giving me that CD is not the same sort of selling as has been mentioned in this post
I am talking about someone giving me money and me giving them a CD in a personal sense. If I was to give my game to a friend on a CD but they were to pay for the CD that would be legal so what is different to me sending it to someone around the world?
You are not paying for the software but infact for the shipping of a CD. It is like me giving you money to send me a package.
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Pilky
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Cheesiest film line of all time "Flash I love you but we only have 14 hours to save the earth" from Flash Gorden
Quote
Originally posted by Pilky:
**Yes but me paying you for a CD and you giving me that CD is not the same sort of selling as has been mentioned in this post
I am talking about someone giving me money and me giving them a CD in a personal sense. If I was to give my game to a friend on a CD but they were to pay for the CD that would be legal so what is different to me sending it to someone around the world?
You are not paying for the software but infact for the shipping of a CD. It is like me giving you money to send me a package.
**
Sounds like selling to me..... 
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-The ZeroWarrior
All kidding aside, this sounds like donationware to me in a sense (if there is such a thing). Or maybe its freeware thats not so free...... hmmm......
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-The ZeroWarrior
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Originally posted by Pilky:
**I am talking about someone giving me money and me giving them a CD in a personal sense. If I was to give my game to a friend on a CD but they were to pay for the CD that would be legal so what is different to me sending it to someone around the world?
You are not paying for the software but infact for the shipping of a CD. It is like me giving you money to send me a package. **
If you give your friend your car but they were to pay for the car, you would still be selling it.
The fact of the matter is that small time friend to friend sales are not reported thus the government never finds out. If you were to make sales via the web you run a much larger risk of being discovered.
At the end of the day the choice is yours: follow the rules or break them. If you choose the latter then there will be consequences if you are caught.
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