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Casey Runnells
Courses Plus Student 5,765 PointsWould I need to start a company if I wanted to release a free app?
Hi All,
I cant figure out if the answer to this question would be yes or no, not necessary. Suppose I wanted to launch an App that costs nothing (e.g. snapchat, instagram). Would I still need to legally start a company? I'm not sure how the app would generate revenue, I guess the business model would assume the app would gain popularity and the user generated data would be sold to other companies/advertisers. Obviously there would be operating costs to develop/host this app? I feel like there is something i'm not taking into consideration here.
4 Answers
Julian Ptak
30,920 PointsNope. I have an app on the Google Play Store and I do not have my own company.
https://play.google.com/store/apps/details?id=com.take3
Hope that helps! There are a few things you WOULD need to do such as purchasing a developer license (I think it costs $45 but I don't remember). And you'd need to have your app looking ship-shape for the most part. They require a lot of information before they let you post it... screenshots, a summary about it... stuff like that. If you're talking about a web app then a free app would cost you money, as you describe, such as hosting, etc. But in no way do you NEED to have your own company to do so.
I hope that helps clarify. I'm not sure what kind of app you're describing though.
Pasan Premaratne
Treehouse TeacherWhat Julian Ptak said :) I have an app on the iOS app store without a company as well.
The one thing I will add is to figure out a business model before or alongside the development of the app. Users won't be happy if you decide to suddenly sell their data later on without giving them a chance to opt out.
Casey Runnells
Courses Plus Student 5,765 PointsThanks Julian and Pasan for the responses!
Ideally this app would allow users to login via facebook or email, setup a profile, and interact with other users in a specific manner. The way the users interact and share content with each other is what I would aim to monetize. Pasan, given your suggestion - I would likely need to include this as a clause in the Terms and Conditions of using the app correct?
Maybe a better question is does it make sense to form a company based off this idea? As an individual I don't want to assume any hefty legal or financial liabilities for a project like this.
Julian Ptak
30,920 PointsIf you're intending to monetize something (e.g. sharing content on facebook) that someone can already do for free by going to the free facebook app then you might want to rethink the idea. Generally speaking you don't NEED an LLC or anything like that. So that's the answer to your initial question. If you're dealing with money (I'm a little confused here as initially the app was free) then an LLC is helpful because if someone sues you, they beat up on your company and not you. Your company loses assets and gets dissolved and not you.
TL;DR... You don't need a company. It's cheaper not to have one and you don't have to turn a profit. If you're making money off of it and you think someone could sue you because of it, then it's safer to have an LLC.