So over a year ago (… wait, really? o_o…) I wrote a little article explaining the basic differences between Inc. and LLC. I ended the article saying that for a fledgling indie developer like A Jolly Corpse, LLC was the natural choice. They’re super easy and cheap to set up, free from complicated taxes and regulations, and still give the owners much of the protection Incs do. So if you’re also starting a little studio, it may be for you, too!
But it’s so scary!
It’s really not. You may be thinking you need to prepare thousands of dollars, hire a lawyer and an accountant, and file hundreds of forms with your local bureaucracy, because that’s what I was thinking. But this couldn’t be further from the truth. Sure, if you’ve got the cash, definitely hire a lawyer and an accountant. But I didn’t have the cash. Once I worked up the nerves and decided to take the plunge, it took a total of like 15 minutes and less than $90. I honestly felt almost silly afterwards. So you just have to decide to do it!
Start an LLC checklist:
- A name for your company
- A document filing service or Secretary of State website
- That’s all!
First, if you’re ready to start a company, chances are you’ve already got a name. If not, make sure it’s something that’s easy to read and pronounce, easy to remember, and has some impact. No “Crystal Interactive” or “Ninja Games”. And definitely nothing like “Wyv and Keep” (more on that later). Also make sure your name hasn’t been taken! You can do a simple Google search to see if it’s obviously already another company, and if it doesn’t appear to be, do a quick search at the patent and trademark website just to make sure. Your state’s Secretary of State website should also have a search tool too. It’s also a great idea to go for a name whose domain is also available (check available domains on GoDaddy or somewhere similar), because you’ll have a website soon, too, right?
Second, you’ll need to file the documents! Some states may allow you to do this yourself online, which is awesome. It looks like Colorado does now, and since this completely takes out the middle man, it’s definitely what I would recommend. But two years ago when I formed A Jolly Corpse, LLC, they didn’t have this option online – you had to file by mail or physically visit the office in Denver. So I searched “form an LLC” on Google and checked out all the competing document filing services.
Warning: There are a lot.
The prices vary vastly, so be careful about who you go with. Check in detail what you’re paying for. Most filers will try to upsell you with special, deluxe, and premium incorporation sets, which include stuff like deluxe embossed binders, company seals and ledgers, framed copies of your documents, etc. Mostly worthless crap. So just ignore these and focus on the actual service fees. I went with a company called SmallBiz because, despite (or because of?) their amateurish website, the filing fees were the least expensive I could find at only $25. Some other companies charge $50 or $100 or even more just for the filing.
Once you’re at the website, it’s as simple as could be! Just pick your state, fill out contact info, enter your desired company name, and you’re done! When picking state, the best idea is to use wherever you currently reside, but if you have an address elsewhere, you may want to consider using a different state. When I was researching, I lived in New York, whose fees were much higher than Colorado’s across the board. My family lives in Colorado, and I sometimes do as well, so that’s where I decided to file. Remember to add either “, LLC” or “, Limited Liability Corporation” to the end of your company’s name, as this is required. You should get notice of approval in 2-3 days, and the hard copies of your official documents soon after.
That’s it! Easy as pie, no?
You may need to file something called an Operating Agreement, but this is separate and depends on state. We’ll talk about this next time!