Legal Question in Business Law in Oregon

I'm starting a new business and I'm not sure which path to take (sole proprietor, LLC, s corp, etc.).

I'm going to be selling apps for the iPhone on the app store. The first application I'm developing I'm doing in partnership with another person who has a sole proprietorship. The second one I'm developing I'll be the owner of, developer, etc, but I'll be hiring graphic artists and others to do some work on it.

It looks like my long-term business will primarily be the latter of these two situations, but I will collaborate on a 50/50 basis at times as well.

Should I form a "partnership" when i do that or do I stay as a sole proprietorship and just write an agreement with my partners. I'll be disbursing half of all revenue for these applications to my partners in those cases and none of the revenue to the contractors in the other situation. I'm not clear if there are tax implications that favor one set-up over another.

Thanks!


Asked on 10/14/09, 1:34 pm

1 Answer from Attorneys
Daniel Meek Daniel W. Meek

I would stay a sole proprietor. Creating partnerships also creates obligation to file partnership tax returns for each one. There is no significant tax advantage to a partnership. And breaking up a partnership can create litigation and big hassles.

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Answered on 10/20/09, 3:02 am


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