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I'm currently a college student (US) for computer science and a few of my friends and I are going to develop a few games for PS4, Wii U, 3DS, and possibly soon the Switch. We're all fine developing these games for free, at least until we get a couple games released to bring in some profit, but we want to do it legally under a business. It's kind of iffy with the NDAs for gaming companies like Nintendo, Sony, etc to sign separate NDAs as individuals and work together (not to mention tricky to accomplish). I was going to make an LLC that we could all work under, but it's obviously not that easy. From my research I've found that I would need worker's compensation insurance and I'd obviously have to pay the employees. Is there any way to have like minded people working without pay under a single legal entity?

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    This sounds like the definition of a partnership. – Tim Lymington Jan 16 '17 at 10:53
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Tim Lymington got it right in the comment. If they don't get a wage, but expect a share of profit and/or loss, they are your partners and would be "members" of the LLC. Then you don't need workers comp or even to pay any salary at all. Of course, they will also be entitled to a share of the business, but from the description it sounds like they should be.

  • I was thinking about that before but it seems like a bad idea to have a 5(+) way partnership when everyone has no business experience. It seems like there's too many ways for that to go wrong. For example if its an LLC wouldn't all partners be in trouble if one of them decided to not pay taxes? – user3441843 Jan 16 '17 at 17:25
  • @user3441843 I am not a lawyer, nor am I a CPA, but I think that when you have an LLC owned by multiple parties (i.e., partners) then you lose the ability to do pass-through taxes; the owners must file their own individual taxes AND the LLC must file separately. Problems with the individual owners' taxes would be the individual owners' responsibilities, not shared, and problems with the LLC's taxes would be shared - though any criminal wrongdoing related to that (tax fraud, for instance) would be on whomever committed it. For multi-owner LLCs, I think having a CPA do the LLC's taxes is normal. – Patrick87 Jan 16 '17 at 17:33
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    @user3441843 You only need a lawyer if somebody sues you. Or you sue each other. Or some local/county/state/federal agency determines you've done something wrong and need to pay. Or if you want to avoid those things in the first place. – Patrick87 Jan 18 '17 at 1:48
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    @user3441843: Going into business without being able to afford a lawyer is like driving a car without being able to afford insurance: even if it's legal, you're taking too much of a chance. – Tim Lymington Jan 19 '17 at 14:27

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