tech-company, business-registration, partnership, sole-proprietorshipRecently, a friend and I started developing apps for iOS. At this point, we have released one app, kind of boring (we really just wanted to get something out there), however we are working on two more that have the potential to turn a decent profit.
At which point, if at all, should we convert the iOS development that is in my name into a business? And if we do, should it be a partnership or a sole propriety?
I would recommend creating an LLC to protect yourself against any liability issues (e.g lawsuits).
Since there are two of you, you’ll be classified as a LLC partnership.
If you do not intend to ever seek outside investment, there is no need to become a C Corp
What is you relationship with your friend? Do you want him to be your partner? Does he want to be your partner? If you decide on a partnership or any entity with a 50-50 ownership, have a written agreement. Make sure there is a provision on how to resolve a dispute. Since many fail to follow this advice, lots of lawyer fees are spent and the business flounders. Forced buy-out provisions tend to work. And there are others that work also. Just have the provision, it will help save the business.
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