I'm wanting to start a game development studio on the Gold Coast but I'm not sure what legal structure to choose and I'm looking for feedback. It's only a small team of 2 at the moment but we want to formalise things before we take on more people. If we register a business name we can only trade in the state in which we register, is this an issue for game studios? a company has pretty high start up costs and then there's all the paper work, is there much need to register as a company this early on?
Any advice from people that have done this before would be greatly appreciated. I seem to get blank stares from people outside the industry when I ask about this.
But also keep in mind a piece of advice quite a few industry veterans have offered "Do it while your young and have less to lose" (mortagage, loans, family, etc.).
IMO industry experience is only really "neccessary" when you plan to actually put a studio together. If it's just you and a couple mates working together, then go for it, but keep in mind if things do go your way and you end up facing the prospect of expanding into a "real" company, you might be well off thinking about employing people to do project management and business aspects, even if you could get in a weird situation where the producer is telling the boss what to do, because you're the boss, but also just a programmer :P
CYer, Blitz
I think you should see about registering a business name as soon as possible, it's relatively cheap and you'll find most contacts you make will take you more seriously if they see a trading name instead of your own personal name.
You'll also want to take into account that you'll be wanting a website and we all know how difficult it can be securing a domain name of your choosing, and it's getting more difficult all the time.
The two of you could eventually form a partnership or a company, but make sure you nut out who'll do what and clearly define your roles at the outset or you could run into trouble further down the line.
Yes HazarD, you do have to qualify but in a certain way.
You'll have to provide details about the location you'll start your business up in as well as marketing aspects, in other words, get a partition in your location stating the need for your business. I'm not sure of all the details but I have a friend that did go through NEIS, so if anyone needs any general info, give me a yell or go talk to a sarina russo job access place and talk to them about it.
I hope everything works out for you. [:D]
As for legal responsiblities at your stage of development I would highly recomend having some form of written agreement with those that will help you so they don't give away anything.
The agreement should include the fact that - any information given to any other person in the project is not to be given out or released in any public form; this information includes, but is not limited to, design documents and code.
All you need is a written statement from them saying 'I agree'. This little bit of precaution can save many headaches in the long term.
The other one that seems quite interesting is setting up a discretionary trust with a company as the trustee. The trustee determines the pay-outs from the trust, so this would allow paying developers as per their contribution to a project. This seems to be a way of having "shareholders" that have different value shares according to what projects they've worked on. It's kind of drifting more toward a cooperative than a company.
I'm currently looking at this kind of structure with three mates, allowing a couple of different projects to be happening at once, without having to mess around with shares (each of us would hold the same stake in the company, and we wouldn't be changing this).
Got any thoughts about this kind of structure? I'm interested to hear 'em :)
With regard the partnership thing, do keep in mind that you can be liable for your partner's expenses, whereas so long as you have not acted in a negligent manner, as a director of a company, they cannot go after your personal assets.
As far as i know, they do not. However, the best they can do is buy it off you (Ask for a ton! [;)]) or register a similiar domain such as whatever.net.au. But they may also try to register the domain name when it expires before you do which could be a pain. None the less its up to you.
Im pretty sure your in the clear [:)].
Bugger :(
This whole thing is like a cart and horse, can't do one thing without another etc. etc.
Got some more questions :)
Those of you working as indies or startups, how have you funded yourselves?
How many people or what stage of development did you get to before you bought/registered a business name, or company name?
Do you have a cart and horse [;)]?
I bought a domain with hosting back when i was 13, mind you it wasnt gaming related it was an Anime fan website... i basically just wasted $110 on nothing but a few images and one or two PHP scripts. http://www.anime-sphere.com i thought it would work out but it didnt [;)].
But as for funding im pretty sure that indie developers use the money that is at hand from like pocket money or their small job at a grocery store etc... a big budget never means a good game, always keep that in mind.
Littlemo, sorry should have explained that you only need the ABN for .com.au domains - you can register a .com domain without an ABN though. I think I paid AU$22 or so for a .com domain (12 Euros through www.gandi.net, which included email redirect and web redirect for no extra cost!) No, I'm not a shareholder or anything, just a satisfied customer [:)]
I've been working for 10 years as a software engineer, writing game code as a hobby and am about to go full-time on indie games stuff. Only getting to setting up a company now. Funding for me is going to be a combination of savings, a bit of contract work on the side and having a partner who works.
Sorry to keep asking more questions and drift further off the point...
Are any of you guys going to the indie game conference in Melbourne this weekend?
Being up here in Queensland kinda sucks for conferences. AGDC is a hike in itself but it's worth it.
What are the odds of someone recording the conference this weekend and selling them? I'd pay $30-$50 happily. There's gotta be other people who can't make it to Melbourne who'd be willing to pay for a video/cd/dvd of the conference.
I have looked into the NEIS program from centrelink. Its legal to run a company on the dole, but there a few problems.
Your company needs to earn revenue, not profit.
Stage 3 of NEIS your company needs to earn profit.
I would look into grants or that new gov scheme for game developers.
One reccomendation. Plan and plan. Then register your business name its a little known fact that you can't do a thing unless you have a ABN or registered business name. Trust me on this. Been working on the game for 6 months and the business for 7 months.
If your ever in the vercinity of Brisbane give me a bell we are doing the same thing you are. Slightly larger team though.
It is possible to get NEIS assistance for a game development project. I've done it. It's just not easy.
Ignore the other grants and focus on your product. You won't get a look-in unless you have something you can sell. They'll be wary of you even if you have a list of published titles you've worked on.
Realise that the people you'll be buzzwording and enthusing to haven't even seen computer games, and know nothing about the market. Also realise that on paper the games business is the worst business model available.
You're not a business until you're making a turn-around. People won't give you money until you're a business.
The most important thing to focus on is the product. If you don't have a product to sell, then it doesn't matter what kind of businessman you are. When you've something to show you can get to the full-time task of running the business.
I'm full of things to say, but I'd turn this post into a book. Good luck with your projects. Anything is possible.
Scott.
In my opinion, if it's just a couple of you, theres no real need to register the company...in fact it's probably a bad thing depending on your situation...
eg. If you are unemployed atm and collecting the dole, if you register the company, i don't think you can collect dole anymore which will mean having to get another job for income which means less time developing!
If you're basically trying to throw a demo together to get a publishing deal etc., then i'd wait until you have the demo finished and you're actually trying to sell it before registering the company. If you end up having to borrow money etc. to start up, hopefully you won't spend as much time with a big debt if you wait until you can secure funding.
However, you should knock up a written agreement with the person/people you'll be working with which defines what does happen once the company is registered (eg. who owns what share of the company etc.) to avoid anyone doing something nasty later on.
If you have a lawyer type friend who can look it over for you that would be good, and even hiring a solicitor to knock up a standard agreement for you would probably not be too expensive.
Remember, all this is just my opinion and is not neccessarily true or legal! :P
CYer, Blitz