How does one legally form a freeware gaming studio?

[Stumblebum]

First off, I am based in the U.S. if that is of any consequence.  Anyway, I am wondering how fellow AGS developers go about forming their studios. i e. Grundislav Games, Crystal Shard, Infamous Adventures, etc...  I have some experience working with the corporations division of the secretary of state and am less concerned with the process than with what type of company I need to form.  Is it common to create an LLC, or would a sole proprietorship be more appropriate since no one is actually paid in the freeware business?  Are either of these even necessary, or do some of you simply copyright the studio name and run with it?  Also, could a freeware studio qualify for nonprofit status, particularly if some of the games made were considered educational? 

I would appreciate any tips in forming my own studio and am also just curious to see how everyone on here approaches the business end of creating and distributing great free games.

[Eggie]

They're just names. Usually nothing's been registered with anyone apart from maybe a website domain name.

[Stumblebum]

Thanks, I suspected that might be the case with a lot of people.

Also, if I were to set up a site that accepted donations, would that require any sort of registration? 

It is free or extremely cheap to set up a sole proprietorship depending on what state you live in, so I am still considering doing that even if no one else does.  It could be particularly handy for tax purposes if I did create a donations option on my site or obtain nonprofit status.  The gaming studio would also more than likely be a division of an entertainment umbrella company I am attempting to set up that would cover everything from freelance writing sales to indy film production.  Of course the film production aspect is currently a dream and would not really work under a sole proprietorship, but there's no point in wasting money on govt. registration for aspects of a company that I have no intention of implementing for at least a couple years.  I can just register for it to become an LLC. when I can actually pay to hire people

[Gregjazz]

First of all, you need a DBA for your company. Although this will not protect your business name (you need a trademark for that), it will allow you to legally operate under your company name.

Depending on where you live and if you're going to sell games (also depending on if you will have an inventory of physical games, or if you are selling digital downloads) you may need a business license and a sellers' permit. Look into your local county and state laws to figure out which one(s) you need.

For your purposes, probably a sole proprietorship is the best route, IMO.

If you hire people, they are independent contractors, not employees or partners. Make sure you clarify your relationship with anyone working for/with your company.

[Stumblebum]

Thanks for the advice.  I really enjoyed both Apprentice games by the way and definitely want to buy Super Jazz Man as soon as my financial situation becomes a bit more stable. 

I am leaning toward trademarking the game studio name and ultimately getting a DBA for the sole proprietorship under which it and my other projects will operate.  I will not be charging for any games until my skills are a LOT more developed if even then, so the trademark should suffice until I actually start doing real business that will more than likely not even involve the game aspect (except maybe as a marketing tool). 

Anyhow, thanks again.  While my freelance writing endeavors don't legally require any sort of business identification, I have been considering forming a sole proprietorship anyway.  Small publishers and production companies are much less reluctant to accept material without representation if they are provided a company name and a TIN. 

[RickJ]

Go with sole proprietorship until you get above $50k-$100k/year.   

[Stumblebum]

Thanks all, It looks like I will try forming a sole proprietorship in May when I move back to Louisiana.  I know attorneys and people in the local government there, and it seems cheaper in general than here in Tennessee even without connections.  I had decided on that a while back for a sort of all encompassing freelance writing business, but it is nice to know that the same plan will work for anything I manage to crank out with AGS as well.

[magintz]

or do some of you simply copyright the studio name and run with it?

Also, just a note about Copyright as a lot of people seem to not understand this. You do not need to physically copyright anything it is an automatic process on any original piece of work and last for something like 70 years since it's creation when it's open to the public. Disney have recently been fighting court battles IIR because a lot of their works are losing their copyright and thus them lots of potential pennies.

As for the studio names, I believe they are just fronts for recognising the person/persons who make the game rather than officially established companies. On the other hand people like Dave Gilbert who make their games commercially (check out http://www.wadjeteyegames.com/) have to go through the whole legal process of establishing their company which I'll assume is different depending on where you live and plan to set up the company.

If it's just a freeware "for-fun" studio that you plan to set up you should be okay just by using a name that is identifiable with you, if however you're planning to make loads of freeware adventure games that will be mass distributed you might want to look at Creative Commons; but for the most part they are going to be freeware games so you have no legal responsibility to really do anything.

[alex]

I've registered an ABN which is free, and have a sole proprietorship for Southern Studios, which I have listed as an IT, Design and Development business.

That's in Australia.

Registering a business over here provides a small degree of protection against IP infringement and lets me operate under that name.  if another company tried to take the name "Southern Studios" I could sue for damages if I felt it conflicted with my ability to carry on under my name however for real protection I would need to get a trademark registered, which is expensive and not worth it unless I am raking in more money.

[Stumblebum]

Also, just a note about Copyright as a lot of people seem to not understand this. You do not need to physically copyright anything it is an automatic process on any original piece of work and last for something like 70 years since it's creation when it's open to the public.

Retention of a copyright actually differs from place to place and even between mediums, (I believe in most places music has a relatively short copyright but is often renewable) but I completely forgot about the fact that the U.S. finally signed the Berne Convention in the late 80's.  That's good to know.  I won't have to waste time, money, or stamps.  Although for screenwriting, I may still send myself a poor man's copyright just to establish the date I completed a work via postmark before sending it to major production studios.  They have a habit of trying to not pay writers and I would just as soon have everything in order.  Hell, even the Tolkien foundation had to sue New Line for money they were owed from the trilogy movies.  Stinkin fat cats.

To Alex, I will probably end up with the US equivalent to your set up for the time being. (also until I am pulling in insane amounts of cash)  I still haven't decided on every detail, but you have all helped me narrow it down a good bit.