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Ask HN: Should I incorporate a company for software side projects?
21–30 of 73 posts
Re: Ask HN: Should I incorporate a company for software side projects?
#22- only if your idea is already profitable beyond ramen profitability, i.e. you can quit the job and survive from the income, and you have a financial buffer for ~1-2 years
- hire an accountant, 100EUR/month and you don't have to care about taxes that much, unless you go wildly profitable
- LLC/GmbH is a better idea than having your life on the line if SHTF (though corporate veil might require at least 2 partners in some countries/states)
- Estonia doesn't seem very recommended lately (the only easy part is to get e-citizenship but the rest seems to be overly complicated). UG in Germany might be what you need, but your taxes will still be around 50%. Did you think about moving to Switzerland/Luxembourg instead?
- think about having a company in Delaware for flexibility reasons. International taxes are more complicated though and Germany would still be your tax domicile, and demanding its share of your profits while bombarding you with unending bureaucracy, often years after
Re: Ask HN: Should I incorporate a company for software side projects?
#23You probably need an accountant to answer tax questions.
Re: Ask HN: Should I incorporate a company for software side projects?
#24- only if your idea is already profitable beyond ramen profitability, i.e. you can quit the job and survive from the income, and you have a financial buffer for ~1-2 years - hire an accountant, 100EUR/month and you don't have to care about taxes that much, unless you go wildly profitable - LLC/GmbH is a better idea than having your life on the line if SHTF (though corporate veil might require at least 2 partners in s…
"only if your idea is already profitable beyond ramen profitability"
I don't know if this applies in EU, but in the US, incorporating would give the separate benefit of protecting your personal assets in the case your company was sued. So, it might be worthwhile even if you aren't profitable.
Re: Ask HN: Should I incorporate a company for software side projects?
#25Earlier quoted context omitted.
Can you describe the mess Atlas creates?
Atlas is built to form a registered Delaware Corp with an agent and a corporate bank account in the US. If your goal is to be acquired or go the traditional startup route then it's perfect. If you just want to roll a new entity for legal/financial protection it is akin to combating mosquitos with a grenade.
Because atlas costs $500?
Re: Ask HN: Should I incorporate a company for software side projects?
#26- only if your idea is already profitable beyond ramen profitability, i.e. you can quit the job and survive from the income, and you have a financial buffer for ~1-2 years - hire an accountant, 100EUR/month and you don't have to care about taxes that much, unless you go wildly profitable - LLC/GmbH is a better idea than having your life on the line if SHTF (though corporate veil might require at least 2 partners in s…
"only if your idea is already profitable beyond ramen profitability" I don't know if this applies in EU, but in the US, incorporating would give the separate benefit of protecting your personal assets in the case your company was sued. So, it might be worthwhile even if you aren't profitable.
I was given the same advise. Specially if your business is using a unique skill to solve the problem (e.g: ML, .. etc)
Re: Ask HN: Should I incorporate a company for software side projects?
#27There are two main reasons to incorporate - the 1st is to shield your other assets from liability - this is more or less important depending on if you have substantial assets and how likely the business is to incur liability (everything has some risk). The second is that with good accounting practices and proper structuring it is often the case that running a business as a legal entity will be more efficient for tax purposes - but this only starts to matter as your business starts to really make $.
Re: Ask HN: Should I incorporate a company for software side projects?
#28Check out https://www.leapin.eu/ for an easy way to set up an Estonian company and manage the accountancy around it. You can probably also contact them how it works with their German customers, and what your obligations and taxes would be exactly.
Pretty sure if you keep all your revenue inside the legal entity, you don't have to pay any taxes. Only once (if?) you distribute profits or pay yourself a salary it'll require paying taxes and might become a bit complicated due to you being based in Germany. From what I understand that's not yet your intention, which would mean it's pretty simple.
Re: Ask HN: Should I incorporate a company for software side projects?
#29i'm not an attorney, nor should my advice be taken as legal advice. i would strongly suggest getting a lawyer to handle this. i can suggest, however, the main things to consider are separating your personal and business income tax and absolving yourself of personal liability in case something overbearing happens like a lawsuit, these are good things of incorporating. again, i'm not a lawyer, and this is not legal adv…
> i'm not a lawyer, and this is not legal advice, i know nothing of eu laws either
Why do you feel the need to comment then?
Re: Ask HN: Should I incorporate a company for software side projects?
#30if your located in the U.S. a single member LLC is one of the most convenient ways to go.
You should strongly consider incorporating in the jurisdiction where your business operates as just because you form the company somewhere else does not stop local tax liability (and in fact if done wrong could incur new additional tax liability in the other jurisdiction where you incorporate)