Ask HN: Incorporate first, develop later?

4 points by gilaniali 14 years ago | 6 comments

With the rise of patent trolls and Lodsys actually filing against developers today, should all developers publish apps through limited-liability businesses or corporations rather than as individuals?

So, even if you get sued, you can take existing earnings as dividends and shut the company down without any personal ramifications, change the apps and republish through another company? Will this work?

JoeCortopassi 14 years ago |

I'm actually very curious to hear from someone who has real world experience in this. $800 a year ( California ) is a big expense for me when I don't have a finished product, but I would hate to go bankrupt because someone like Lodsys rained on my parade

pash 14 years ago |

With some exceptions, yes, it will work, so long as you live in a jurisdiction that allows individuals to trade with limited liability. (The United States and every member state of the European Union do.)

Limiting liability is the prudent first step in doing business. It boggles the mind that so many developers never take that step.

gilaniali 14 years ago | |

What are the exceptions? Any legal source for your claims that this will work?

staunch 14 years ago |

Not something to worry about unless you know you're working in an area with known patent trolls ready to pounce.

gilaniali 14 years ago | |

I doubt any of the developers being sued by Lodsys knew they were infringing on these patents.

And there is no sure way to know which small thing is under patent than to spend hours going through the patent archives or hiring expensive patent lawyers.

staunch 14 years ago | | |

Yeah, and something like 7 out of 1 million developers are being threatened by Loadsys. Exactly my point.