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Can my other company fund my game company?


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#1 afliii   Members   -  Reputation: 464

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Posted 03 August 2012 - 09:28 PM

This may sound like an obvious yes, but hold tight and hear my thoughts.

I own a home improvement company and I'm thinking about trying to fund my game developing company with earnings from it. Let me clarify even more. Xsealer Asphalt Maintenance LLC (XAM) is the home improvement company I own and operate. I generate a pleasing amount and the actual company is only a month old. Broken Limits Media LLC (BLM) is one full year old and we are almost finished with our first game. Therefore, BLM has no money.

I'm pretty sure it is perfectly fine to have one LLC (a legal entity) pay another for whatever agreeable reason(s), but is there a specific way I should do this for records, taxes, and/or other legalities?

Really. Can't I just give my own company the funds? Or is there some kind of loop hole that makes it wrong? I'm worried about taxes or some other financial inconsistency. Maybe I'm overthinking it way too much. I kind of feel like I am, but I had to ask.

Also, does it matter to have some kind of written contract between the two? This sounds crazy, as I own both companies. Again, just making sure. Whoever answers this legitimately, I would appreciate additional advice if you see a place for it in any way.

Sponsor:

#2 Promit   Moderators   -  Reputation: 7335

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Posted 03 August 2012 - 09:31 PM

Is...is this really something you want to ask a forum about instead of a licensed lawyer in your legal distict/county/state/country?

#3 afliii   Members   -  Reputation: 464

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Posted 03 August 2012 - 09:53 PM

I've recieved some pretty good advice from moderators before. I'll take that as a misconception to the reliability here. If nothing else, my questions may be eye openers to others...

#4 Tom Sloper   Moderators   -  Reputation: 10062

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Posted 03 August 2012 - 10:31 PM

You really need a lawyer on this one.
-- Tom Sloper
Sloperama Productions
Making games fun and getting them done.
www.sloperama.com

Please do not PM me. My email address is easy to find, but note that I do not give private advice.

#5 Promit   Moderators   -  Reputation: 7335

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Posted 03 August 2012 - 10:43 PM

Also consider an accountant. The costs start adding up, I know, but that's the life of business.

#6 afliii   Members   -  Reputation: 464

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Posted 04 August 2012 - 05:27 AM

Got it. Yea. I've been running a small business for some time now. Costs certainly rise and pop up out of nowhere. I've been thinking more and more about getting a lawyer to help figure these kinds of things out.

Is there any website or community you know of where I could locate a lawyer familiar with video game development law?

#7 Tom Sloper   Moderators   -  Reputation: 10062

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Posted 04 August 2012 - 07:11 AM

Is there any website or community you know of where I could locate a lawyer familiar with video game development law?


Yes, I posted links in one of your other threads.
-- Tom Sloper
Sloperama Productions
Making games fun and getting them done.
www.sloperama.com

Please do not PM me. My email address is easy to find, but note that I do not give private advice.

#8 Orymus3   Crossbones+   -  Reputation: 9938

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Posted 04 August 2012 - 10:02 AM

Is...is this really something you want to ask a forum about instead of a licensed lawyer in your legal distict/county/state/country?


Provided you've had two of these questions lately, and that you appear to have good chances at making actual money, you should probably not just counsel someone but keep them on retainer for future concerns (as there will be!).

#9 anttoo   Members   -  Reputation: 210

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Posted 04 August 2012 - 11:46 AM

Hi,

I work as an accountant, and this should not be taken as instruction or advice in any way shape or form.

The only concrete advice I can give you is: get an accountant!

If you own two companies, and one buys something off the other, essentially, they cannot make a profit. (As this is what you would be doing, it just happens that you are buying nil items for $XXXXX.) This is pretty much one of the most ilegal things that you can do, just imagine how this could be abused! (This would be a #1 way of avoiding tax for example. As well as directors stealing money from there organisation. But this is very very complicated, so, get an accountant!)

You have to withdraw money in the usual way, being taxed on it, and then put it into the other organisation as capital. Or else, you could pay zero tax by constantly 'reinvesting'.

But for the love of god, GET AN ACCOUNTANT!

P.S.

A general tip is never to fall into over-trading. Where you are running a business off cash reserves (in this case, a first company), you should be spending revenue on running your business.

P.P.S

Get an accountant! Posted Image I hope this helps.

Edited by anttoo, 04 August 2012 - 11:48 AM.





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