4 ms·

Don't tell your employer. Don't incorporate until after you've quit your job. If you want to launch before quitting your job, consider using a merchant of recor

Don't tell your employer. Don't incorporate until after you've quit your job. If you want to launch before quitting your job, consider using a merchant of record (e.g. Paddle) so you don't even need to incorporate. I'm assuming you're not competing with your employer, nor are you building your startup on your employer's time or with your employer's resources, in which case there's nothing wrong with this approach ethically.

fire 4y ago
Can you explain a bit about the Paddle thing and not needing to incorporate?
- fastball 4y ago
  Merchant of Record services mean that when someone "buys" something from you (e.g. subscription or other product) they're actually legally interacting in all ways that matter with the MoR. Effectively you can think of it as a mostly transparent re-seller. The MoR (e.g. Paddle) is buying the subscription from me and selling it to you. Because I'm never actually interacting with the customers for payments I don't need to deal with regional taxes, refunds, etc – that's all handled by Paddle. In exchange they take a heftier cut than what you'd get if you used a service like Stripe.
  - blowski 4y ago
    Is this like Gumroad as well?
    - that_guy_iain 4y ago
      Yea
  - Kiro 4y ago
    Don't you still need a company to sell it to Paddle?
    - remyp 4y ago
      Yes, and Paddle will ask you to prove it.
    - vruiz 4y ago
      In many countries you can issue invoices without having a company or being a freelancer up to a certain amount. That should be everything Paddle needs. Also, once upon a time, I checked with FastSpring (another alternative) if they could just withhold payouts until incorporation and they told me they can do that.
    - steve_taylor 4y ago
      Not according to Paddle's signup form: https://vendors.paddle.com/signup https://vendors.paddle.com/signup "Business type" options include Individual, Company, Partnership, and Non-Profit.
onion2k 4y ago
Don't tell your employer. This may make it less likely that your employer will take you to court, but if you do this and your employer does choose to pursue a case against you after you leave the court will see it as intentionally deceptive and it definitely won't help your argument.
- deleted 4y ago
  [deleted]
- laserlight 4y ago
  My reasoning is the opposite. If one tells their employer about their side project, the court is likely to interpret this as an admittance by the employee of potential conflict of interest. Otherwise, employer could defend by stating “Why would I seek approval from my employer? This is clearly outside the scope of my employer's business and of my employment contract.” Above reasoning is in line with why companies don't search for existing patents when developing new technologies. If they search for prior work and are found guilty of infringement, that's considered willful infringement, in which case damages are tripled.
  - capableweb 4y ago
    > Above reasoning is in line with why companies don't search for existing patents when developing new technologies. If they search for prior work and are found guilty of infringement, that's considered willful infringement, in which case damages are tripled. The (US) patent system is so fucked up (granted you're talking about the US), where if you try to lookup patents, you might be fucked. If you don't try to lookup patents, you might be fucked as well. Damned if you do, damned if you don't
AlchemistCamp 4y ago
Nearly everyone I know doing side projects from YT channels to ebooks to WP plugins to mobile apps to games has started without being incorporated. None of them use Paddle or ever encountered problem that required them to. Paypal has supported personal accounts since the 90s. Stripe supports personal accounts. Google/Apple/Amazon/MS/Steam/Gumroad and others will all work individuals as well as businesses.
- kavalg 4y ago
  Depending on the jurisdiction (EU), you may be asked by the tax authorities to open a company after certain transaction volume.
  - AlchemistCamp 4y ago
    Interesting. I wonder what the motivation for doing that is. It seems like it would be less of an accounting burden to just treat the revenues as personal income (which it is).
  - michalf6 4y ago
    In some jurisdictions you won't even be asked, but fined. It's seems wild how much simpler is it for Americans to try out a business idea when you read comments like this - just start selling, and pay your income tax (unless I'm getting the wrong impression). Where I'm from, you're required to incorporate upfront and deal with the legal, accounting, VAT and social security hassle before selling anything to anyone - few days to a week of stress added.
    - cercatrova 4y ago
      > It's seems wild how much simpler is it for Americans to try out a business idea when you read comments like this - just start selling, and pay your income tax (unless I'm getting the wrong impression). This is likely by design and is both a prerequisite and consequence of America's lax attitude towards businesses. It is likely one of the pivotal reasons why America has many more businesspeople (even just counting Silicon Valley companies) than Europe.

fire 4y ago

Can you explain a bit about the Paddle thing and not needing to incorporate?

fastball 4y ago
Merchant of Record services mean that when someone "buys" something from you (e.g. subscription or other product) they're actually legally interacting in all ways that matter with the MoR. Effectively you can think of it as a mostly transparent re-seller. The MoR (e.g. Paddle) is buying the subscription from me and selling it to you. Because I'm never actually interacting with the customers for payments I don't need to deal with regional taxes, refunds, etc – that's all handled by Paddle. In exchange they take a heftier cut than what you'd get if you used a service like Stripe.
- blowski 4y ago
  Is this like Gumroad as well?
  - that_guy_iain 4y ago
    Yea
- Kiro 4y ago
  Don't you still need a company to sell it to Paddle?
  - remyp 4y ago
    Yes, and Paddle will ask you to prove it.
  - vruiz 4y ago
    In many countries you can issue invoices without having a company or being a freelancer up to a certain amount. That should be everything Paddle needs. Also, once upon a time, I checked with FastSpring (another alternative) if they could just withhold payouts until incorporation and they told me they can do that.
  - steve_taylor 4y ago
    Not according to Paddle's signup form: https://vendors.paddle.com/signup https://vendors.paddle.com/signup "Business type" options include Individual, Company, Partnership, and Non-Profit.

onion2k 4y ago

Don't tell your employer. This may make it less likely that your employer will take you to court, but if you do this and your employer does choose to pursue a case against you after you leave the court will see it as intentionally deceptive and it definitely won't help your argument.

deleted 4y ago
[deleted]
laserlight 4y ago
My reasoning is the opposite. If one tells their employer about their side project, the court is likely to interpret this as an admittance by the employee of potential conflict of interest. Otherwise, employer could defend by stating “Why would I seek approval from my employer? This is clearly outside the scope of my employer's business and of my employment contract.” Above reasoning is in line with why companies don't search for existing patents when developing new technologies. If they search for prior work and are found guilty of infringement, that's considered willful infringement, in which case damages are tripled.
- capableweb 4y ago
  > Above reasoning is in line with why companies don't search for existing patents when developing new technologies. If they search for prior work and are found guilty of infringement, that's considered willful infringement, in which case damages are tripled. The (US) patent system is so fucked up (granted you're talking about the US), where if you try to lookup patents, you might be fucked. If you don't try to lookup patents, you might be fucked as well. Damned if you do, damned if you don't

AlchemistCamp 4y ago

Nearly everyone I know doing side projects from YT channels to ebooks to WP plugins to mobile apps to games has started without being incorporated. None of them use Paddle or ever encountered problem that required them to. Paypal has supported personal accounts since the 90s. Stripe supports personal accounts. Google/Apple/Amazon/MS/Steam/Gumroad and others will all work individuals as well as businesses.

kavalg 4y ago
Depending on the jurisdiction (EU), you may be asked by the tax authorities to open a company after certain transaction volume.
- AlchemistCamp 4y ago
  Interesting. I wonder what the motivation for doing that is. It seems like it would be less of an accounting burden to just treat the revenues as personal income (which it is).
- michalf6 4y ago
  In some jurisdictions you won't even be asked, but fined. It's seems wild how much simpler is it for Americans to try out a business idea when you read comments like this - just start selling, and pay your income tax (unless I'm getting the wrong impression). Where I'm from, you're required to incorporate upfront and deal with the legal, accounting, VAT and social security hassle before selling anything to anyone - few days to a week of stress added.
  - cercatrova 4y ago
    > It's seems wild how much simpler is it for Americans to try out a business idea when you read comments like this - just start selling, and pay your income tax (unless I'm getting the wrong impression). This is likely by design and is both a prerequisite and consequence of America's lax attitude towards businesses. It is likely one of the pivotal reasons why America has many more businesspeople (even just counting Silicon Valley companies) than Europe.