Just a simple question about the legal business structure of game studios.

For most game developers, they have some kind of name for themselves. Such as 'interplay', 'black isle', 'square soft' etc.

Obviously for the big studios they are a company / corporation.

What about small indie developers? Do they simply trade mark their studio name and have no registration with the government?

Or do they at the least register a business under sole proprietorship / partnership?

I'm curious, thanks for feedback! :)

If you are serious you should register a business, it is almost always beneficial(and in some countries, required) to have a registered business when you're doing business (if you're selling a product you are doing business).

Registration is easy and free in many countries.

Hi Simon,

Yea but under which structure should a small indie team use? sole proprietorship?

A good Accountant can probably explain the pros/cons of each type structure. If you have one you should speak with them. Might not be a bad idea to speak with an Attorney too.. just so you'll understand the responsibilities and liabilities of each.

Good luck with your project.

I do have knowledge about this as I studied business at one point. But I was curious as to what is the 'common' structure most studios adopt in actual practice.

Hi Simon,

Yea but under which structure should a small indie team use? sole proprietorship?

That really depends on where you live, different countries have different business forms and different advantages/disadvantages for them, your local government should be able to provide you with most of the information you need. (Most governments are extremely helpful when it comes to starting businesses since they want people to create jobs and pay taxes)

I am not a laywer - since you are about to start a business (even if just 'for fun'), you really need talk to one.

What about small indie developers? Do they simply trade mark their studio name and have no registration with the government?

You have to register trade marks, and they cost about $275+ apiece in the USA.

Also, what some indie developers do out of ignorance, and 'seem to be okay', doesn't mean it's a good thing to do.

Or do they at the least register a business under sole proprietorship / partnership?

You actually don't have to register sole proprietorships, as far as I know (which admittedly isn't that far), but you can optionally register them.

However, they don't offer you any protection. If your game software accidentally wipes out my harddrive, and I sue you, even if your EULA says, "No responsibility for damages caused to your PC", EULAs haven't actually been proved to be legally binding in court, so I can sue you anyway, and if you lose, I can take your house and any other possessions you own, even the ones unrelated to your business. This makes you a good target for lawyers, knowing you have money, and knowing you are vulnerable to lawsuits.

However, if you're a LLC (Limited Liability Company) or a LLP (Limited Liability Partnership), your legal losses (liabilities) are limited to only what the business owns, and not what you personally own.

Again: I am not a laywer.

I'd figure out if I am doing it for a hobby, or for extra income on the side, or as a business. That'd change how I'd approach it.

As a hobbyist, I wouldn't bother with any of it.

As extra income on the side, I'd just take some small precautions (maybe an LLC but not bothering with trademarks).

As a business, I'm personally planning on doing first an LLC, then later expanding to a Series LLC with several sub-LLCs, for segregating separate parts of my business once things get underway. But I plan to talk to a lawyer once I get closer to release.

I do have knowledge about this as I studied business at one point. But I was curious as to what is the 'common' structure most studios adopt in actual practice

It depends.

It depends on company size, company type, country, business model...

Hi everyone,

Thanks for the feedback but I think I've found my answer.

I think LLC is the way to go, not sure if its the same in other countries but LLC over here has many advantages, including:

1. limited liability

2. certain tax exemptions

and many more goodies!

You have to register trade marks, and they cost about $275+ apiece in the USA.

If you trade using an kind of name or logo (a mark) it also becomes an implicit trademark. You can optionally use the (tm) logo to show that you're explicitly stating that you claim something as your own mark, even without registering that fact.

At one big international corporation I worked for, we stopped using the (tm) mark altogether, because our lawyers decided that it implied that only the marks that we explicitly (tm)ed were protected, and a nearby mark without a (tm) would be interpreted as having no claim. Their logic was that if we (tm)ed nothing, then the trademark claims were vague, and we could sue anyone for copying any of our imagery.

What country are you in, Red?

Here in Australia:

I have a sole-proprietorship, which I was required to register in order to work as a software contractor - this registration was free via the tax office website. This just lets other businesses treat me as a business, and pay money into my personal account.

My indie games company is an LLC with 3 owners - there are fees involved in administering this with the government corporations agency. The limited-liability is kind of important, because it allows your business to fail, without causing you to personally go bankrupt along with it.