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CaossTec

How to legally start a game business

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I had read the “Legal Issues for Rookie Development Studios” series here in gamedev. But I’m concerned about some legal stuff. Supposing I’m the leader of a team named XXX, and they are some guys working with me to make a game named YYY. Following the words of the previously mentioned articles, I make a legal entity by registering it. Question 1: Where should I register it? Any link to where are the forms to fill and explanations of how to get registered will be nice. Question 2: Supposing there’s no way to register a new company in my own country. Is it possible to create one some where else (in the ZZZ country)? So, let’s say that I had created a company named XXX. All the fellows working in the team agree to receive a percent of the game incomings and also agree to not be part of the company itself but just employees. We create a written agreement where each fellow assign their Intellectual Property (the models used in the game, the engine, the music, what ever, etc) to the company. In the agreement is also reflected how is going to be the royalties distributed and that they are not going to receive a share of the company but just to be employees of it. Exceptions are also handled. The agreement is sign by every person involved. Question 3: Just signing that piece of paper makes it legal? After the company receive all the IP and establish how it is conformed; the game is copyrighted. As the country where the members of the company live don’t allow creating companies, it’s impossible that the company copyright the game there. So it’s copyrighted some where else, let’s say in The Copyright office of the ZZZ country, by filling the online forms. Question 4: Is it possible to copyright a game in a foreign country? Question 5: Will that copyright allow the game to be worldwide protected? Supposing all the above, the company is registered and has all the IP and Copyrights of the game. Question 6: Is there any thing else that left to be done before launching the game to the publisher/distributor? I mean, legally speaking!

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Original post by CaossTec
I had read the “Legal Issues for Rookie Development Studios” series here in gamedev. But I’m concerned about some legal stuff. Supposing I’m the leader of a team named XXX, and they are some guys working with me to make a game named YYY. Following the words of the previously mentioned articles, I make a legal entity by registering it.


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Question 1: Where should I register it? Any link to where are the forms to fill and explanations of how to get registered will be nice.


The area in which you live has a legal jurisdictional boundary, either at the city, county or province level (not familiar with cuba but familiar with business law), just surf the net and find it, or pick up the phone and call city hall and ask about business permits, business licenses. The forms are either online provided by the municipality or whatever legal authority your residence falls within. Fill out the forms, register your fictitious business name, and pay the fee. There may be additional requirements, such as having business insurance for the company, a legal address for the business to recieve business related mail at, and eventually, once your company grows, a board of directors upon which will sit the company legal counsel, who will have a separate address at which all legal correspondence for the company will be sent to and replied from.

There may be safety issues such as the amount of power you are drawing (many large computers can stress an ordinary office power system), and conditions may have to be met for that, such as getting more powerful circuitry in your utility delivery infrastructure. Find out all the things you are going to have to comply with in order to have that necessary information for the legalities to be satisfied, as well as for the start up budget to be properly forecasted.

Your friend in all this process is a good smile, reliable notetaking and a positive attitude. I used to project manage the most environmentally and politically sensitive projects in the state of california in private construction, outside of municipal development, and there is no substitute for solid people skills.

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Question 2: Supposing there’s no way to register a new company in my own country. Is it possible to create one some where else (in the ZZZ country)?


Of course you can, you just have to determine whether or not it is legal to do so where your jurisdiction lies. One of the great secrets of giving you company a big boost is to do as much legwork yourself as you can, creating as much positive representation for your company as you can at every level of the government, and once you are as informed as you can be, and have more questions still that are beyond your ability to gather, that is the time to put on a suit and tie and go see a laywer. A good impression upon a solid attorney where you live that you have done your homework, are not going to fade away, can demonstrate you are planning for success and stability and can create and maintain strategic relationships in government and business communities is worth its weight in gold.

A lot of American companies have created companies offshore in the Cayman Islands and lot of other places in order to avoid paying US corporate income tax, and have taken some public relations hit because of it, but basically are doing smart business with respect to their bottom line. Again, check what the legal requirements for doing business where you live work for the kind of company you want to create, and, there's no shame in relocating for better business conditions. If indeed you do live in cuba, you might be able to sell an article to a major publication globally on your travails of starting a capitalistic enterprise of this nature in a country with that type of political climate.

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So, let’s say that I had created a company named XXX. All the fellows working in the team agree to receive a percent of the game incomings and also agree to not be part of the company itself but just employees.
We create a written agreement where each fellow assign their Intellectual Property (the models used in the game, the engine, the music, what ever, etc) to the company. In the agreement is also reflected how is going to be the royalties distributed and that they are not going to receive a share of the company but just to be employees of it. Exceptions are also handled. The agreement is sign by every person involved.

Question 3: Just signing that piece of paper makes it legal?


Yes and no. A contract is as binding as the integrity of the people who sign it. Two, an unfair contract is usually unenforceable, if the party who gets the short end of the stick puts up for their rights. Let's say you do own all the intellectual property for their models and engines and other things they make for the game. Well, suppose the game makes no money. They made the code and art in good faith expecting you to fullfill your end of the agreement by selling it, honoring their participation stipulations and paying them consideration for such. You failed to make anything, because your marketing was lousy, or distribution issues, or more than anything, design issues that didn't make the game fun to play, leading to critical pans and lackluster downloads of the final executable.

They could certainly put up a fit for their property, and just might. In fact, were you to actually negotiate a good agreement, you might just put in a clause of performance conditions where if you fail on your end of the deal, their property reverts back to them. There is endless middle ground for these kinds of negotiations, and, negotiate you should.

I've signed dozens of NDA's in my time in the film business, and a few in the game business. There is no law that says you can't negotiate for as advantageous a deal as you can get, but at the same time, quality of life issues recently discussed by the IGDA, and throughout the industry in everyday negotiations might indicated that a different take on employee equity in the product might be considered as well as offered. I prefer employee equity ownership in some cases, because it works best for the cash flow projections for the enterprise. In other cases, a different kind of legal deal is warranted. These are all things you are going to have to learn, or pay for an attorney to protect for you if you are going to be the head of a game company.

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After the company receive all the IP and establish how it is conformed; the game is copyrighted. As the country where the members of the company live don’t allow creating companies, it’s impossible that the company copyright the game there. So it’s copyrighted some where else, let’s say in The Copyright office of the ZZZ country, by filling the online forms.

Question 4: Is it possible to copyright a game in a foreign country?


It is possible to establish intellectual property protections worldwide using the mechanism designed for it, it is called the ICCA, I believe, or Internation Copyright Convention Accord, if memory serves. Specifically copyrighting them in a foreign country of your choice might have some residency restrictions, and a little research or asking an attorney that practices this kind of law will be useful here.

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Question 5: Will that copyright allow the game to be worldwide protected?


Theoretically, yes. In practice, well, there are all kinds of things that you can do in the code itself to protect piracy and IP theft, as well as dealing with reputable distributors and retailers or other distribution schemas you may devise. Most of all, I would police them myself, by finding out what kind of distribution controls I could negotiate and what kinds of protections I could integrate into the final release executable.

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Supposing all the above, the company is registered and has all the IP and Copyrights of the game.

Question 6: Is there any thing else that left to be done before launching the game to the publisher/distributor? I mean, legally speaking!


I would see the above, and, in any case, and all cases, do your own homework, because in the end, templated advice might be well intended, but your location and product are unique, and thus unique legal and business circumstances apply to it. Thus, you have to do your legwork, and be glad to learn about this, because the challenges involved in this process are generally what dissuade and filter out most of your would be competition.

Good luck,
Adventuredesign

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