Startups Stack Exchange Archive

Do I need an LLC for my app which would charge commission per user transaction?

I am finishing my iOS app which would essentially be a free app in the App store and there won’t be any subscription fees either. The app will result in a transaction where user A will pay user B (for something) and we will charge a commission on that transaction. We would be thinking VC funding at a later stage once we have enough users but not at this point so we are bootstrapping pretty much for now. We will be using paypal as the method of payment between the two parties for now but the next phase will utilize using Apple pay and apple’s newly announced Cash Card. So here are my questions -

  1. Does the company needs to be an LLC at this stage?
  2. There deosn’t seem to be any charges for using Apple Pay in the App but can Apple charge the 30% service fee even if the app is free and has no subscription model or in-App purchases?

Answer 12867

The purpose of an LLC is to protect your personal assets if your company ever gets sued. Is it possible that a customer could sue you for a large amount of money? For example, if user A sells a diamond to user B and the diamond is fake, you could potentially get sued for a lot of money. If your biggest risk is that customers might ask for a refund of money they paid to you, then you don’t need an LLC.

I don’t know about Apple pay so can’t help you with that.

All content is licensed under CC BY-SA 3.0.