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5 Comments

Start as a company or individual?

Hi,

I used to build apps on App Store, and it handles everything for me. But recently I have a few ideas on building a service. And I would probably use Stripe to charge my users.

I was wondering is it OK for me to work as individual/personal? Since I don't have any users yet, and I am not sure if I am fully committed to it. Register a company and opening a company bank account seems like adding a lot of work and cost at this stage. I much prefer to work as personal.

Are there any pros and cons on this? Any issues I might need to aware of?

Thank you very much for your help.


Edit: Thanks everyone for your response and suggestions! Forgot to mention that I am not from US (Hong Kong, actually), so a general idea would be fine.

posted to Icon for group Legal, Tax, and Accounting
Legal, Tax, and Accounting
on June 30, 2019
  1. 4

    The primary reason to incorporate is to protect yourself from personal liability, and to enable investment. Unless you are at risk for damages, I suspect its safe to wait

    1. 1

      Thank you, I understand that would be some risk, and I expected to switch to company if there are more than a few people paid it.

  2. 3

    I would suggest you go as an individual as long as you can. Even when you will start charging people for your service you can do it as an individual and the file it as personal tax income. If the business will grow up then you can register the company. But in the beginning this just unnecessary extra work which you definitely don't need.

  3. 1

    I would go find a few lawyers and just talk about the differences so you can understand. They like to do this for free to get to know you. Then you can make a informed decision about the risk tradeoff you are making.

    I think you can do some initial validation first without a corporate entity but then if you are more certain you want to setup a corporate entity for a variety of reasons that lawyers can explain better. I've done this different ways before - setting up first, validating first, not setting up and it all really depends on your specific business needs. Lawyers are trained to think about what trouble you might get into and how to keep you out of it or get you out of it.

    You can easily do this on any of the online lawyer matching sites by posting this question there. Then having a nice chat with who responds to you :) So definitely go do this and then you can make a smart decision.

  4. 1

    As stated, the only reason to form a company is to prevent a law suit from seizing your personal assets. Forming a company separates “your stuff” from “company stuff.” If you feel you are not at risk for litigation, a sole-proprietorship is perfectly viable; perhaps forever.

    • I am not a lawyer. Don’t accept legal counsel from a bunch of nerds on the internet. Seek the advice of a legitimate lawyer, if you can, before making your decision.
  5. 1

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    This comment was deleted 4 years ago.

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