Based on your experience publishing games, did you open a company?

I am looking for some info about how should I proceed.

I am planning to put a product on Steam; I would create a different account from my "player" account obviously, but mostly I am curious to know how did you do, when posting your game on Steam (or on the Apple Store/Google store and so on).

Did you create a company? I did check the steps and it takes quite a lot of efforts when you create a company; considering that you may make one product and never make another (because nobody like it, not because you become rich ); although I am not able to see any problem in publishing a game as individual.

Since many of you did release games; I was wondering if you could share some of your experience; and what would possibly be a pitfall.

Thanks in advance!

 

I made 22 cents on the initial launch of Pond Wars. So I decided not to form a legal entity.

 

before taxes or after?

It is understandable; I am aware of the fact that a game may not be so interesting to everyone; which means that there is not even need to create a legal entity.

But if the game would sell more, what would you actually do?

 

I used my steam name for publishing, why bother with different accounts (also I get a rad "developer" title this way).

I already owned a company (a small one ) before entering steam, so I just used those informations on the financial/taxing side.

The game was Army of Pixels, a pixel based strategy game, though we sold only about 800 or so.
Positive reviews, but very niche product.
http://store.steampowered.com/app/390920/

 

I see, I was told to not use the same steam ID to avoid to mix up your developer account and your "gamer" account.

26 positive reviews; that's the best that you can hope Niche market is still good, at least you don't get lost in the ton of games that look all the same.

So you already have a company; make sense to use it

 

Yeah, but you wouldn't want the customers to see how much time you spend playing games instead of working!

 

Either or. There is a tax free low income threshold here.

 

While I did not release anything yet, I plan on making a company (single person) shortly before IGG goes live, mostly to avoid troubles with Polish equivalent of IRS in case the game becomes popular. Dunno how it is in OP's country, but would check their laws before doing anything you might regret (both the law acts and how courts, etc. put them into practice even if there is no case law in your country).

 

From what I know about it, incorperating is expensive.

I mean, if you are going to just LLC yourself, you should probably have a business strategy, like are you gonna become a freelancer who needs the corperate shroud, or are you just making a company for making a company's sake? If this is your first app, theres no reason to expect it will become a smash hit. It COULD, but statistics aren't in your favor. For every Angry Birds and Crossy Road, you have thousands upon thousands of apps that make no money. So if you pay all the money thats required to actually start a legal entity, and like, 12 people play your game, you are deep in the red

On the other hand, if you have a team and you are already paying people, then yeah, you're gonna want that liability protection. Or if you do end up having the next KSP, you might want to use some of those early earnings to start your company.

Just look into how expensive it actually is to start an LLC and you'll understand

 

An LLC is usually fairly inexpensive to set up, but it varies from state to state. I would recommend looking into setting up an LLC.

 

Better known as the "It costs us more to process the tax forms than it would be worth for that silly low amount" tax policy.

 

It's worth noting the way tax works wherever you live. If you release a game and it's not under a company(Or rather it's under the wrong kind of company) you could pay a f**k tonne of tax(Like 50% or more) where you could pay nearly none if you do it correctly.

The fees make it not really worth it, IIRC it's like $600 to set up a company here and it's probably a waste of money for most people.

The way the store works can also help. Potentially you can do it under a cheap company and then if the launch is successful change it before the company actually makes any revenue.

EDIT: I'm also not an accountant or lawyer and if this advice get's you sent to prison it's not my fault

 

Having a company can also be important if you're working with others. If you're just solo then it's not as big a deal.

 

Mine were in Oregon. Both times it was an LLP (limited liability partnership). It wasn't expensive, and really it was just kind of a paper work thing, didn't really affect how we worked. Though, it did let me get business rates on my mobile plan.

 

The biggest benefit I've had of running a company for the development of SuperTrucks Offroad is that all the expenses I've incurred including software, internet, hosting, contractors etc has been a tax deductible expense.

So this means I'm not paying money out of my personal income, but straight from my company income that will never be taxed because its an expense. In addition, any money I loaned to the company out of my personal pocket, gets paid back without it being taxed as income.

Although there are downsides, I need to pay accountants $800 each year and of course the registration fees etc but all in all I'm way better off from a tax perspective doing everything through the company.

In New Zealand, and I would assume in most other countries, companies are only taxed on their profits. So make sure to check the tax restrictions/benefits in your region before making any decisions.

 

I don't assume anyone here took up business law, but does a DBA count? I plan on being solo. My understanding of the system is minimal at best.

 

I use the one account for Steam too - both as a player and developer.

I guess this question would depend on the country in which you live, but here in Australia you only really need an ABN for taxation purposes, which you can just apply for under your own individual name.

 

I'd recommend creating a separate dev account (irrespective of company structure). If you launch a successful game, you'll get a lot of friend invites from players you don't know. You can either choose to ignore them, or accept them. If you accept, you may find yourself signing out of steam so you don't keep getting interrupted.

I wouldn't recommend to anyone to conduct business without the protection offered by a limited liability company. If you ignore this, at least make sure your terms of use include a maximum cap on liability equal to the value of the transaction against all forms of damages.

 

In Poland... you can put virtually anything into company expenses, the only thing required is that is somewhat tangentially related to the company. Unity license? Expense. New computer? Expense. Freaking plant to liven up the place? Why, of course - expense!

You don't have to have beancounters either, most of the time - all you need to prove is a special kind of receipt called "faktura VAT" (not sure how it is called in US and other countries) that is written in company's name (and you have to keep it for I think 5 years or so in case of tax control). If you're clever enough, sometimes at the end of fiscal year the government may even pay YOU!

 

Thanks to all of you that replied. I do realize that the topic is incredibly widespread, especially because nobody had the guts to make one international set of rules for a certain type of companies (or legal entities for business purpose ). I am naive, I know

I am in USA; I did check about what it takes to open a company; and money wise is not a big deal, but it takes time, and most of all, require to hire a lawyer....here they aren't cheap at all.

Now, considering that Steam and Apple store does not require you to be a company; I think that the best approach may be to see first if the game even sell enough to pay the fees Although there is a downside: if I create the company after the release; I believe I have to do a ton of work to actually change the application itself, to be legally compatible with it being under a company status instead than a individual...which is not ideal I believe.

Whatever I do; most likely it will be a mistake (Murphy's law ); especially because neither the Apple store nor Steam, supply with a phone number where you can call and ask legal guidelines. They rarely even reply to you when you send a mail to support

As now it is just me; I did buy some assets (both on the store and on other 3d asset companies; so legally I believe I am covered by such licenses. But for any other kind of work; I need necessarily to have a company setup to protect my personal bank account, if someone's computer explode
The IRS here, if the application is profitable, will ask me to pay taxes based on the income, I have to ask if a company has a different bracket system, compared to an individual; which may be better. And also as you noted in your comments; being in a company allow me to deduct the cost of equipment and software. Which is great, considering that if I will sell 100 copies I will feel accomplished My product is sub-niche; I do not have plans to retire to a desert island after release

Thanks for all the great comments; it helps a lot to know how others release their products.

 

Yeah, I don't think you would even get taxed on the app if it made less than $500 or something like that, I forget what the taxable threshold is for something like that (I know nothing about taxes, I just know theres some sort of threshold before you can be taxed on these sorts of things)

And yeah, this thread was more educational about business stuff than an entire class on it was in college.

 

Actually in some states, you can set up an LLC without a lawyer. You don't need a lawyer just to set up the LLC, but it can be useful to have a lawyer to get advice about what to do and how to best optimize your business legally to save money on taxes.

 

Certain platforms require it, such as consoles.

 

I have been looking into this for a variety of reasons. We have other projects in motion other than games so we are putting together a "company" to handle profits and losses from those creative endeavors.

I found an interesting free book that may be helpful. You can find it on Amazon here.

I learned a lot reading it!

 

A company is realistically for spam and privacy control when you are 'disregarded entities' which would include about 99.9% of Unity users. And on the small chance that your business does make enough money to become a tax headache, it's also legal protection for you personal belongings like home, car, and so on.

It generally in most locals costs less than $100 in most US states to set up an LLC business. You can choose simple to be a disregarded entity in the USA and that's free it you go the disregarded entity route and just claim a EIN for that disregarded entity from the IRS (in the USA). It doesn't even much matter what you call the disregarded entity although you'd be wise to avoid calling it Apple or Microsoft although legally you could get away with calling it Apple Games or Apple Farm Supply if that was the legitimate business they were in..

However, Apple and I think now Microsoft will not allow just an EIN be the basis for you opening an account in their stores as a legal business, you have to establish an LLC at the US state or the appropriate jurisdiction in foreign countries. Google, doesn't really care, but your real business address (which is my home address actually) is exposed to the general public which hasn't been a problem for me yet - you'll get more junk mail and scam phone calls by virtue of having a credit card or simply living in the US.

 

After looking into things with a lawyer specialized in small companies, I did realize that an LLC is quite expensive and cost even if you do not sell anything. At least in California.

To open it, you need a simple form, an Operation Agreement, and 70 dollars + 20 in taxes. But this is just the beginning! Then you need

- A registered Agent: you can be one, but your name and address goes public; which means if you work at home; you get a ton of spam and such. The agent cost an average of 200 to 300 USD per year. They are the ones that get legal communications and summoning. This is different from being on any spam list, like when you get a loan to buy your house or car. Harassment is not nice.

- A $800 yearly fee to the LLC corporation (forgot the name); you can't work around this, even if you are single owner of an LLC. You pay this just to have the LLC open, either if you sell or not. It is in place even if you are a "disregarded entity", at least in CA (which is the equivalent of a single person LLC).

- A EIN number for taxes purposes, this is free

- A business bank account; because if you keep LLC money in your account; bad things happen, either if you are one person or 200. The cheapest I found is 20 dollars per month; or free if you keep at least 5K in the account at any time.

- Potentially a lawyer that write correctly the documents, like the Operating Agreement

Why you want to do that, I told myself; and the answer that I was given, is purely for legal and tax purposes. Most companies accept submissions independently if you are a company or simple user. Apple require you pay the developer fee, which is $100 per year I believe; but no need for a company. Same for Google and Steam.
On console is different, you need a developer agreement with them; which is given only to certain companies with certain requirements, and I am not planning to go on console anyway, since it is more a hassle IMO

When publishing, you can get sued; I was told of various real cases; for using assets for non commercial products, in a commercial one, up to disagreement when a game hit the store and someone say that you used a trademark name or a name that is too close to their trademark name and so on.
Issue happens even when you do your homework, because smart people try to milk you even if they do not have legally the right, due the fact that they bet that you will not follow in court, and scare you.

So the whole thing is a matter of weighthing the costs, vs peace of mind to not have to deal with bad things.

 

There are many other options to start a company in the US. Do some research. If you are not making any profit at the moment, it is not expensive.

 

Agree, but the LLC is the only one that guarantee that your finances remain separated from the company (which is why it is a favorite, being limited liability).
"sole proprietorship" or a "partnership" have the owner being liable for everything related to the company, and your assets are on the line. A corporation require to have multiple members and it is way too complex for a startup.
I've been searching for a bit, and there is no "perfect" solution; each one has pros and cons, but for a single person, the LLC is in my opinion, the safest, from the point of view of peace of mind.

Then of course, if a person has no assets; there is no risk in opening a "sole proprietorship" or a "partnership"

 

In california that may be the case, I heard about that $800 fee. In Colorado there is no such fee I was able to form a LLC for $50 total and I did not use a registered agent, just my home address. I have received no spam.

Also I should add once we got our EIN we opened a business checking account which was also free with no minimum balance, helps keep the business expenses sorted from personal.

 

Yep, I did hear that each state has its own way to handle fees. In CA sadly it is quite expensive, like everything else.

Technically you can open a "out of state" LLC, but it is a pain; and it may end up costing more than the 800 dollars yearly fee.

If you don't own your home, it is still safe to use your address; you will eventually leave and the hasle is gone once you leave
The business checking account is also not a big expense, compared to the others; as long as you have cash in it, they don't charge you, but they limit transactions (there are many things that they won't tell you when you go talk to the associate; I did figure it out checking on the bank website).

 

Exactly. If one has not yet published the game, then they do not need liability protection. Afterwards, yes.

Only $125 here in Florida. So yeah, the fees vary widely.

 

It's worth pointing out that a limited liability company may not provide as much protection as you expect.

The shareholders of a LLC company are protected, and only liable for the value of their shares. However the director of an LLC can often be held personally liable, especially if the company is mismanaged. This essentially puts the sole owner of a LLC on the same basis as a sole proprietor.

Consult a lawyer or accountant before taking this advice. Laws vary dramatically across jurisdictions.

 

That may be a case, but it is very rare. I did talk with a lawyer that does only LLC in CA, and he said that the LLC with one owner, is the safest way to go.

Each member of an LLC is not responsible at all, the company itself is responsible in the measure of what the company own. So if your LLC bank account has 1000 dollars, that's all that can be taken. There are ways to "pierce the corporate veil", and go against the owner of a LLC, but it is not simple, and all boils down to what you write in the Operation Agreement. Which is why it is always good to pay a lawyer to write one.

At least this is what he said; since my main concern was to not loose what I own, because the LLC get sued.
Obviously the better is the lawyer that goes against you, the higher is the chance to get the corporate veil pierced...nobody is safe in the end.

 

Wait, there is a difference between your assets and the company asset.

The moment that you create the LLC, you need to put money in it; which has to be "appropriate" to the type of business that you run. For a gaming company, it should be enough to pay for a computer, some software and such.

These are the assets of the company; this is what can be taken away; even if you never published a game yet.

Although if you do not have an LLC, they could come after your assets...if you own a house, savings, or whatever it is, they are assets that can be taken away from you to pay for whatever issue may happen.
Which is why you do not want to have anything but an LLC, if you own anything considerable.

So even if you never published a game; you should consider an LLC, if you own assets.

 

This may be one of those jurisdiction things. The last time I studied accounting (over a decade ago in NZ) an LLC was only considered worthwhile if you have investors that didn't operate the company. The investors got protection, but directors didn't.

Anyway I'm simply pointing out that there are differences in laws between jurisdictions. And it's worth consulting a local expert rather then looking for advice over the internet.

The appropriate response to protecting your own assets in NZ is generally public liability insurance. It will probably do more for you then a LLC.

 

Agree, each country is different, and even from state to state, you can see quite a lot of variety.

I was not inquiring for a legal service on a public forum BTW; I was asking what others did, and get an idea of what is the solution that did work for each case; and obviously they differ from country to country.

Once I did get some advice, I did pay a local lawyer that gave me some options; but I never trust a single source, since the lawyer may be pushing his own agenda to get more money. It is not like I don't trust them, but I prefer to hear more bells and then make my own idea about things

Thanks for sharing your experience, even if I don't live in NZ, it is still useful

 

Who will come after us? Why? I have talked to a professional. Everyone's situation is different. Not everyone needs an LLC.

 

Wouldn't this discussion go great in a Business Forum? ......................


Incorporation was $150 for me in Nevada. I use LegalZoom. Not exactly the same fiduciary relationship as using a law firm, but good enough to get started. I moved from California, and when I heard that incorporation was $800 there, it made the purchase that much more justifiable.

Although I feel that I incorporated too early, I don't regret doing it. The process is fairly straightforward. There are many steps, over a period of time, but the learning process of the whole experience was invaluable. Over time, as I learned more about business, entrepreneurs are known to set up companies and dissolve them if they fail, a lot more often than you would think. It's like, starting up a new project and trying to kindle the fire, of course, after generating some initial spark.

I don't think there's a way to identify the most appropriate time to incorporate. You just have to use your best judgment. In my case, I wanted the legal protection of my assets used to generate the business, as well as the tax deductions, which indeed save you when it comes tax time.

One major misstep I took on my entrepreneurial endeavor is shelling out a large amount of money for a CPA. It was incredibly unnecessary, since I went through 1800Accountant, instead of finding an in-person CPA. It was expensive, and I didn't even use it, since my loss was greater than my profit. TurboTax Home & Business is great for sole-member LLCs. It even says so on the box =). Mind you, I don't know if I'll be audited, but I highly doubt it, at this stage.

 

Who? Anyone really...from some person that demand copyright on something that you used, to IRS that question your tax declaration
Nobody needs an LLC; you can just get an EIN number and go with that, but then when things go south; what would happen? If you speak only with professionals, I pay them

Obviously every situation is different; which is why you need to figure out what is best for your specific case. I don't believe I have ever said that LLC is the solution for everyone

 

I was told to not use any of the legal services DIY online, because they do not have legal people working there; they collaborate with lawyers, but workers in such companies are people like any other, so not always able to foresee problems. But they are cheap after all, so there is that positive side.

The 800 dollars fee is only for LLC I believe, if you have a no-profit you don't have to pay, nor if you have a different type of company. If you can keep the company in NV, I would say that it is a great deal.

I did look into creating a company, purely to protect my assets; but the tax dedictions aspect is also an interesting one. I would gladly save the hassle, since I would be the only member of the company, if there was a way to put a game out there and not have to risk. But this happen only if you find a publisher, and it is not really an option for me, since I am nobody, nor I have a big name behind.

Some have this passion to become entrepreneur; I really prefer to focus on what I know best; leaving all the legal stuff to whoever has the knowledge to take care of it After all I've been working for almost 2 decade as employee in big companies; got spoiled in thinking only about my duties.

 

I am not worried about the IRS. We are using a tax professional to help us through the tax laws and preparation of our forms.

As for copyright, we have not published a game yet. So there is nothing there for us to copy. When we are ready to publish we will consider that. But to worry about it before there is any thing to sue us over is a waste of time. Besides, we are not making a mobile phone clone.

I am not saying you should do as I do, btw.

 

For me IRS is a big scare...especially when they can call you for an audit. Usually they back off with big corporations, so they have to bully the small fries Heard horror stories of people that for innocent mistakes, got in big troubles.

Just to get an idea, how much is an accountant that does taxes for a company, instead of an individual? My current tax guy is in the 200+ range per tax year, but he does not deal with companies; just individuals.

Copyright is another big concern; I am saving EULA for anything that I download or buy; just to be sure that nothing could possibly go wrong. Although it is borderline impossible to prove documentation in electronic format, since there is no date associated to the document; nor you get notified when it change.
This happens very often, from what I was told; people sue you for anything, even if they are wrong, hoping that you will settle without go to court.

I get your point; and I appreciate that you share your experience I did work hard to get what I have, and having a family that depends from such assets, put me in a situation where safety comes first That's why I go more on the defensive

 

Our CPA is a good friend and works with a lot of small companies. Costs will vary based on where you live and what you need from them.

I am not worried about IRS. As long as we are not using the company to cheat the government by deducting huge amounts of stuff...such as office space (which I hear is red flag) or equipment we also use for personal use, or any of that sort of stuff, I am not worried. If we are audited, which I doubt will happen, I will make sure our books are in order and that we did nothing wrong. I have heard horror stories too...but I betcha lots of people try to cheat as well.

EULA have to do with licenses and yes, you should keep all those safe and make sure they are up to date. Don't use pirated assets, don't use student software, read licenses carefully, etc.

Copyright is not the same as EULA. But..it is very hard to sue someone if the names or ideas are similar. I have read everything about it and other than the actual code and maybe a game that is way to similar to another, again..I am not going to worry about it.

I have a family too..but we do not depend on the money from the game or assets we sell. For us, it is a side business and a family business.

At this stage in my life, I have learned to worry about things that are probable rather than things that "might be". That doesn't mean we don't do research and get advice from professionals, but life is just too short to live anticipating every bad thing that can happen. Do what you need to do to feel safe, make sure you are doing what is right within the laws of your state/country, and then enjoy what you do.

I have kids to worry about...I am not going to waste my time worrying that the IRS is going to hunt us down for a few small deductions.

 

I see; I was trying to figure out what does your CPA does for you and ballpark. I will check with locals.

IRS can be nasty at times, usually they mess up people that are legally OK and just make mistakes...while others that behave badly, end up getting away. Not always, but that's what I heard

EULA are a pain; I would rather have a signed document from someone, at the moment of purchase; so it won't matter if things change, you pay for something, at these conditions, and you show that if sued for breach of the EULA. Pirated assets are not a concern, I am 40 and work for top companies as engineer in CA, so I am not really in need to get pirate stuff

Copyright issues arise often for ignorance; you may call your product like some remote product that a company in Asia make (as crazy as it may sound, it happened); not because you want to copy voluntarily, but beccause you just have the misfortune to not check enough. Even trademark registers does not hold all the entry in every country; and you will know that there is something wrong, if someone has the same name as something that you did

Copying something from someone in software is also hard to prove; even checking the code, unless it is line by line copied, it is not easy to prove. There is a whole legal branch about software copyright; I did try to read about it but I do not have such patience. Unless you make a carbon copy of some famous product, you should be fine; but dangers are right behind the corner (people sue Apple and Google, imagine how hard would it be for them to sue a small unknown company )

As someone that have kids, my concern is to send them to college I woudl rather loose everyting for my choice, not because I was short-sighted and made avoidable mistakes with my business. We see things in different ways, due to our different approach It is always nice to see an opposite position, to see pros and cons of each approach.

 

Darshie.....you will receive a letter from a lawyer about copyright issues and will be able to solve the issues before they take you to court. If you choose to fight it, it will cost you money, regardless of your LLC. If you fix your game not to violate copyright issues, you will be fine.

I have a kid in college, two teens and an engineer manager husband. So I am in about the same place as you.

Audits are usually when someone does something really stupid. Read the book I mentioned above. It might help you. IRS is not the bad guy. If you follow the law, pay your share, then you won't have an issue. If you do, you can more than likely diffuse the situation without a fine.

Even with a LLC, if you are audited, and they find cause, you could lose your business, including your equipment which you used as deductions. You can protect your house and personal belongings, but your business assets will be threatened.

The real advantage of the LLC is if your company goes into debt and can't pay their bills. In our case, I cannot see how that can happen as we are not paying more money out than we can afford. Most of our expenses will only be partially deductible, such as equipment, because they are also used for non-business purposes.

So..unless you have investors or a Kickstarter event, it is probably not necessary to have an LLC.

Separating money from the company and your day job income is important regardless, as you want to avoid the hobby status. If you can't prove to the IRS that your business is not a hobby, registering as an LLC is not going to help you.

I suggest you get some advice. If you can afford to start an LLC, you should be able to pay a tax expert to help you. It is the cost of doing business.

PS. I am basing this on my research and advice from professionals. Really do nothing that I say. Talk to someone who is a REAL professional in these areas please.

 

You may get a letter from a lawyer, and it may say "you broke copyright; here are the details, you may settle or go to court". If they are nice people, they offer you to change the name or remove the part that cause the issue; others are not that easy, and go for the full offensive.
Just to give you an idea, while working for a company, I have been summoned to testify, to show that we didn't break any agreement or copyright. The thing went on for a while...not pretty, even if you win.

I have never been audited as individual; but my relatives did get summoned for the audit; they didn't do anything wrong; still it happened. IF you are wrongdoing, I am totally ok with being punished; the concern is only on innocent mistakes. Although one thing is to loose 5K in company assets, another is to loose what you own; which is why I favor the LLC solution.

Indeed an LLC cost big time, more in experts that avoid you mistakes, than in actual money spent in the company (at least at the moment...without doing anything it cost already 1400 per year). I did spend already some money to pay a laywer, just to get info...without even submit the paper yet.

Thanks for the suggestions; no worries, I won't summon people in court, because of advice on a forum I've been around enough to respect anyone's advice and opinion, but always verifying thoroughly before acting.

 

Well personally for my LLC, the only assets it has are the games and apps that I have created and profits it has earned. My computer and such things used to create those things I treat as personal possessions. Asset Store purchases and all that are personal purchases. I'm not trying to be cute with my taxes and such here. If I was someone that was actually earning a living wage via the Asset Store and self-employed then I'd declare computers and software purchases and such as deductible but for games that are hit or miss and without a success that sort of paper shuffling is a waste of time from what you should be working on.

Realistically speaking no one with any sense is going to sue my LLC unless I make massive amounts of money and they'd make up some excuse to do that via something I published since that's the only thing they'd even have any access too so that my LLC has no assets except it's published property and it's profits is the safest legal choice for myself. There are legal protections in the USA for ownership of one mode of transportation and one home so lawyers can't circumvent the law or write the law themselves to suit themselves or the businesses they work for, whether they call it an EULA or something else.

People that worry about getting sued forget that courts take a dim view of people and organizations that waste the courts' time filing suits in an effort to make money with no moral ground to sustain the suit and often reward the innocent that were sued legal damages.

 

Interesting how the asset for a company may vary wildly between companies, even of the same type.

The few people that I know that operate an LLC, were almost forced by their lawyers to have assets and at least a balance in cash for the company; but from your example; I guess that it is totally unnecessary at this point.

Not sure about the car, but you can loose a house, even if it is your only house, not used for office purposes. My ex coworker did open a company; went upside down and creditors actually forced him to sell the house to pay the debts. I don't believe he had an LLC, but I do not know all the details that went behind the scen of course; since it is none of my business.

What you say about court work is true; I've been working in a company that mostly was suing others for patent infringment; that was their main revenue, beside other side projects; and when they would go to court; you can tell that everyone was taking side with the sued person (although that won't help in regards of the outcome; since if you infringe something, you end up paying for it).

I used to live in EU, and the legal situation was nothing like USA. I noticed that in USA, there is a sort of love toward legal actions; while in EU, most of the time you settle things among gentleman, via phone, without even the need to file a copyright violation or similar infractions.

 

If you operate while insolvent and your LLC acquires debts that it cannot pay, its not likely the LLC will offer you much protection at all.

 

Bankruptcy. LLC will protect you from losing personal assets if your company goes bankrupt. It won't,however, protect you if you file for personal bankruptcy due to loss of income from losing the company's assets. You could lose your house most likely, depending on your state laws regarding bankruptcy.