GeneralJist said:

All of them said C corporations were the way to go, and I was unsure if we started things correctly.

Ya we are small right now like less than 10 people.

Do most people here on this site form llcs or some other entity?

It seems a lot of people here don't form business entities, but just have everything signed over to one person?

Asking what is most common on the site may not be best for you. The most common on the site is beginners and hobbyists.

For small businesses an S corp is more common than a C corp, but each state has a bunch of different laws regarding both, so it varies wildly. LLCs are very similar to S corp in how their tax systems work, but they are also quite popular. Both S-corp and LLC allow for pass-through taxes, which means you can file taxes once for yourself as the owner of a small business instead of filing twice, once for you and once for your business. It can also make bookkeeping easier, simplify the requirements for record-keeping at meetings, including meetings by yourself which still need records kept.

The big reason I've read people like Delaware so much is because of how some of their courts work regarding corporate lawsuits and usury. On the usury laws, it means if you owe a company money they can potentially charge very high interest rates; in some conditions they have no limit on interest rates. For another popular reason, they have a separate process called the Court of Chancery where corporate law disputes can be addressed with judges who specialize on corporate law and can do so quickly. BUT ASK YOURSELF — can you afford to survive a lawsuit, and travel to Delaware? Or are you in a position where you are issuing credit or loans? In addition, you must hire lawyers to maintain it as a legal home in addition to filing documents for doing business in your own state.

Some recommend west Texas for similar reasons, courts that tend to be more business friendly. But unless you actually live in west Texas it adds expenses, and it really only has a potential benefit if you've got a major corporate lawsuit, which is unlikely.

Right now you say you have “less than 10 people”, a sadly common response I've heard from many people disguising that it is just one person, as well as from organizations with two or three people pretending to be bigger than they are. But whatever, it's where you are at.

If you have anything more than one person, you need some legal documents. Exactly which you need depends on your relationship. You might consider a collaboration agreement, a written document that describes what the intentions are, who maintains ownership and custodianship, and how payments will be made if any. (The best option is usually to offer discretionary payments, but talk to your people and a real life lawyer.) If you are going to employ people as contract workers you need proper contracts in place, which often requires a real life lawyer to get everything right. And if you're hiring someone as an actual employee you definitely need things like an incorporated business of some form, a business license, tax numbers, unemployment benefits as required by the government, and more, which is best navigated with a real life lawyer.

The Small Business Administration (SBA) has people who can answer non-games business questions, and they have local offices wherever you are in the country.