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Author Topic: Advice with starting a software business  (Read 486 times)

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Offline starter_up

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Advice with starting a software business
« on: June 14, 2016, 12:16:11 PM »
I am a game developer who is about to enter a partnership with another company (a publisher) in the US.

This is how it works:

- I build a game and send it to the company
- they publish it on my behalf (with their account).
- they do marketing, etc. and we share profits from ads. That is, they send me money monthly.

I don't even know if this will be profitable. So, is it worth registering a company for this just to start out?

Note that I'm not really worried about my agreement with my partner company in the US, but more worried about whether I'm violating any Indian laws in the process.

There are three aspects I am concerned about:

1. my partner company is abroad and I will be receiving money from abroad. What kind of business model does this fall as? It is not freelancing, it is not software sale (because I am not selling anything). do I need to get a service tax registration or VAT registration or anything else?

2. Is it illegal to start out without registering a company / sole proprietor account?

3. anything I should safe guard against because it is an international activity?

Thank you

Please advise.

Offline advabdul

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Re: Advice with starting a software business
« Reply #1 on: June 14, 2016, 07:51:50 PM »
You are using their platform to showcase your creative work. You are not selling it in anyway neither directly nor through them so where is the question of VAT tax.

They will give you share of profit from advertisement. That's ok.

Govt of India will be very happy with you for getting in precious US Dollars.

Just do one thing get your products copyrighted.

Here is the link for it:
http://legalserviceindia.com/copyright/register.htm
Advocate Abdul
I am Muslim law Advisor

Offline starter_up

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Re: Advice with starting a software business
« Reply #2 on: August 17, 2016, 03:33:43 PM »
Hi,

I am so sorry that I lost this post completely.

Thanks for the reply!

can you please answer these related questions:

- can I accept money into my personal savings bank account from my publisher? or should I need a sole proprietorship account?

- do I need to pay any other tax than my personal income tax?

- do I need to do any other registrations?

thank you again.

Offline Sebastian

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Re: Advice with starting a software business
« Reply #3 on: August 21, 2016, 10:47:01 PM »
Good luck

Offline rajgopal sripathi

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Re: Advice with starting a software business
« Reply #4 on: August 22, 2016, 09:18:37 AM »
Hi
Answer to your query
1) You can write software and sell it abroad. No service tax registration or VAT registration is required as these are export income.
2) It is better to start a sole proprietorship firm and have it registered(will cost Rs3500) and also obtain import-export license (will cost Rs3000) as you are likely to earn in foreign exchange. However you can also in your individual capacity export the software and have the money remitted in to your SB account. But once the income exceeds 5000USD, it is better to start a sole proprietorship firm.
3) Once you have the firm and IEC licence in place, you can open a bank account and deposit the foreign exchange in this account.

4) If you have a sole proprietorship firm and also have a valid IEC license and also have export invoices, your Income tax will be 7.65% only.  In case you are receiving software export income in your personal savings account, you will be liable for 33% Income tax.

if you foresee an annual income of more than USD10000-/- better to have a sole proprietorship firm along with IEC code.
Hope this helps
Rajgopal Sripathi
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email:rajgopal@legalwin.in

 

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