Hi all, I'm working on a hobby game project with one or two other people from different countries. Right now we're essentially just garage dev'ing, but we want to start up a company instance so we can start publicizing. We have a name selected and a website domain and everything ready - however we can't figure out what route we should take for company forming. I can't seem to find any info on forming companies or partnerships from multiple international members. We have professional degrees in other fields but we are not business experts :) . My initial thought is that we have to set up a company in one country, then it's just a matter of having international employees but I can't find much info about that either. We also want to avoid having it feel like one person is the owner and the other is just an employee; really we're each taking lead roles as company founders.

Countries involved are Canada and Germany in case anyone has some specific info, although I think my question is general enough that any advice could apply to most countries.

If anyone might be able to either provide examples of how they've seen other small companies or partnerships formed from international members, or provide any advice at all, it'd be greatly appreciated!

I don't have experience on this kind of partnership. But I hope that this book could help you some: http://www.amazon.com/Distributed-Game-Development-Harnessing-Winning/dp/0240812719

Anyways, you must incorporate some tools for managing the development process at remote locations: a task management tool like Assembla or the cloud services from Atlassian that allows you to share documentation and tracking the commitment of development tasks. Also you must implement some kind of digital contract system for ensure the agreement of your join collaboration and non-disclosure terms f.e. The use of some kind of escrow mechanism for ensure commitments based on paid task to freelancers etc.

Right now we're essentially just garage dev'ing, but we want to start up a company instance so we can start publicizing.

Make several games and a company will form around them, you don't need a company to publish a game.

As for legal matters in different countries, it's often not worth it. If however you do need to make a case against some one in a other country it will often be a Civil matter, meaning you will need to appear in court in the country or end up losing. I also advise contacting a lawyer from the country, you will be surprised at how much laws can differ.

After drawing up legal agreement that I provide to all customers, I haven't once needed to take legal action against a client. I advice you use a similar approach.

Homer, whether or not you form a company, you and your partners must execute a collaboration agreement.
Mona Ibrahim wrote a great article, at http://maientertainmentlaw.com/2008/11/collaboration/. Mona also wrote:

http://www.gamedev.net/blog/1394/entry-2254033-what-happens-when-you-don%E2%80%99t-have-a-written-agreement-part-1-contract-basics/ What happens when you don't have a written agreement [part 1, contract basics]

http://www.gamedev.net/blog/1394/entry-2254080-what-happens-when-you-don%E2%80%99t-have-a-written-agreement-part-2-real-life-application/ What happens when you don't have a written agreement [part 2, real life application]

Thanks very much for the responses guys. To clarify on our situation, we're hoping to target Steam and we don't want to operate as one sole proprietor who pays the other sole proprietor (Steam will only pay one recipient per project) - we are desiring to actually create a business entity to receive and distribute funds. I just don't know if I should be considering starting a company that has both a domestic employee plus an international employee, or should we both form separate legal entities and one business pays the other, etc... I don't know what arrangements are actually possible.

Tom: Those articles are great and we will definitely be taking some insight from them!

I just don't know if I should be considering starting a company that has both a domestic employee plus an international employee, or should we both form separate legal entities and one business pays the other, etc...

If you are a US citizen, the SBA has a free program of business mentors. Actually, they also have a new program I didn't know about before (I just Googled it). In addition to SCORE (Service Corps of Retired Executives), they also have a Mentor-Protégé Program. Get some knowledgeable advice!