Heya.
Ok, here is the situation.
1) I'm a game developer currently working alone on a project.
2) I'm going to be taking it to get funding very soon (with amount to be
raised enough to run the company for about 2 years)
3) I currently do not have a company registered
My issue is, do I need the company founded before I receive the funding? Or,
can I see if the funding stage is successful or not and THEN immediately
found the company and divert the money into it?
How will this be taxed if I wait to start the company after being handed the
money? Will I need to pay personal income on the money?
Technically, the funding stage counts as sales (as I'm offering rewards back
via crowd funding). So...that definitely complicated the issue (so it can't
be considered as a gift).
Any thoughts? Really stuck on this one ~_~
You need to have registered your business name and entity type before you
seek funding. You may want to register as an LLC or an S-corp, depending on
your circumstances. Only sole proprietors and one-person LLCs who choose to
be taxed like a sole proprietorship pay personal tax on funds.
You may want to talk with a CPA and have him/her create an accounting system
for you. You will also need a business banking account into which all funds
you receive are deposited. Be very careful to keep your personal and business
funds separate and to keep accurate records of everything.
jtowbin | Community Moderator |
10/29/2012 - 3:00 pm
Hi, Check out the resources available in our Filing & Paying Taxes section. Also, you might want to consider getting in touch with a local Small Business Development Center or SCORE, two of SBA's resource partners. They're located across the country and provide free business counseling and answers. Visit our local assistance guide to find your local SBA resource partners by entering your zip code. Good Luck
BizResearcher | Window Shopper | 10/31/2012 - 2:51 pm
seek funding. You may want to register as an LLC or an S-corp, depending on
your circumstances. Only sole proprietors and one-person LLCs who choose to
be taxed like a sole proprietorship pay personal tax on funds.
You may want to talk with a CPA and have him/her create an accounting system
for you. You will also need a business banking account into which all funds
you receive are deposited. Be very careful to keep your personal and business
funds separate and to keep accurate records of everything.
jtowbin | Community Moderator | 10/29/2012 - 3:00 pm
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