LLC just to publish a couple of apps?

October 14, 2016 5:27 PM

I plan to release a couple android/iOS apps in 2017. Personal projects that I do mostly for enjoyment and to gain new skills. I’m considering whether it’s really worth it to form an LLC just to release these apps and have some basic liability protection. I've read in a few places it's good to be paranoid about this kind of thing in our hyper-litigious country.

I do see lots of people releasing apps as themselves ( not under an LLC) and I wonder if it’s really low-risk to do this. I mean, if you don’t enable in-app purchases, and don’t collect or store any user data, then is it absolute overkill to form an LLC just for the liability protection? Is there a simpler way to go that also offers some protection, but perhaps with less overhead/paperwork than maintaining an LLC?

And yes, I could just write these apps and toss them without publishing, but I don't see the fun in that. Too paranoid, or better safe than sorry? I understand YANML.

posted by quantum to Law & Government (3 answers total)

A TOS with good disclaimers and mandatory arbitration in an expensive place is probably more valuable as a litigation deterrent, but forming and using an LLC consistently is also helpful. You need to join the appstores, publish and interact with users, and take and make payment by way of the LLC'S bank account. The LLC has to own the copyrights and trademarks. Remember that an LLC cannot have unreasonably small capital, so the bigger your operation gets the more value it should retain.
posted by MattD at 7:58 PM on October 14, 2016 [1 favorite]

The most important liability protection is real legal advice and counsel when you need it (ahead of time and if issues arise) but from my own non-lawyer experience, liability insurance is the next most important--which is probably more relevant if your app is being used to conduct business functions but worth looking into just to see if it's recommended in your space. This can also protect you to some extent if you inadvertently violate a software patent.

LLC status is often overhyped as a protection mechanism on its own when the CEO of a one person company will find themselves on the hook in many situations regardless of LLC or SPP status. A technological consultant touching business functions typically needs this sort of insurance for things like "errors and omissions". A $1M plan can cost as little as $500-600 per year.
posted by aydeejones at 12:28 AM on October 15, 2016 [1 favorite]

See this recent thread. It's kind of expensive and complicated to setup and maintain an LLC.
posted by w0mbat at 10:32 AM on October 15, 2016