mobile-apps, taxes, united-kingdom, incorporation, app-store-optimizationWondering if I could submit a free app to the Apple App Store using a UK limited company without “activating it” for tax purposes.
My aim is to incorporate the Ltd, list the app as free and keep the company dormant to save all the hassle till I find investors. I think it looks way more professional if the app is published by a company
I have found this on HMRC but I am not sure if have the App listed would be considered advertisement or trading even when it’s free, anyone has experience with the matter?
I am not a legal advisor, nor an accountant but I have successfully operated a UK Limited Consultancy company for 20+ years. Hopefully my experience counts for something.
The Company is an entity. Entities require registration not just because of taxes.
Trading is when an entity is offering a service, which is what you would be doing. Trading creates good will (basically brand recognition).
Trading carries responsibility. If your app was to interfere with someone elses service, give wrong advice or made false claims, or thrashed the device, the entity behind the app could still be held responsible. Even if your terms and conditions say “use at your own risk” many jurisdictions prevent you from divesting all risk.
If you were a doctor or financial adviser and gave out free advice, and someone was hurt by this advice, you could still be held liable. The courts would have to decide if your advice was given under false pretenses or with ill intent. A penalty against you is not guaranteed, but you would have questions to answer because you would be the person held accountable.
Having a company as opposed to private name behind an app is advisable to cover liability. If you have your private self named as source of the app, and it was to hurt someone, your home and every asset you have could be used to help pay for damages. If you have an entity, then the entity is held responsible. (Exceptions apply whereby the law proves the directors of the company were negligent in there duty/care).
Some of the online app stores perform checks on the company. Android do minimum checks, but Apple and Windows stores perform checks.
Saying that, it is unlikely that anyone will find out that a dormant company is behind an app until things go wrong. But if they did go wrong, the judge would not likely appreciate your efforts to skip some paperwork.
Watch the 2001 documentary called “The Corporation”. It is a powerful documentary and will make you understand why companies are entities, much the same as people. Someone somewhere must be held accountable.
I would create a Limited Company at companieshouse.gov.uk and once a year fill in what amounts to about four sheets of paper that says zero trading. It would significantly reduce risks.
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