Should i start with sole proprietorship?

[devkaran]

I'm developing an app, and I need a business to accept payments and everything business related. There are 21 different types of businesses in India, and i can't quite figure out how to choose.

The only way to lose money would be from the free trials i will be providing, and all of that will go from my personal cash. I'm not taking any loans or funding from outside, so i don't think i need to worry about liability right now. I will add an agreements page in the onboarding page just to be safe.

Should i worry about liability? Sole proprietorship fits my needs. I will turn it into private limited in future when revenue exceeds 2M inr, until then the lowest cost and least complex option seems to be sole proprietorship. Opinions?

 

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[Segawa]

I'm developing an app, and I need a business to accept payments and everything business related. There are 21 different types of businesses in India, and i can't quite figure out how to choose.

The only way to lose money would be from the free trials i will be providing, and all of that will go from my personal cash. I'm not taking any loans or funding from outside, so i don't think i need to worry about liability right now. I will add an agreements page in the onboarding page just to be safe.

Should i worry about liability? Sole proprietorship fits my needs. I will turn it into private limited in future when revenue exceeds 2M inr, until then the lowest cost and least complex option seems to be sole proprietorship. Opinions?

Today, I have learnt that there is more power in education, If you can take time and weight every business model it would be helpful in that you don't fall into status of the 99%. I say weight all the 21, find the fittest. Don't limit yourself, go through all possibilities

 

[MJ DeMarco]

Should i worry about liability?

You should always worry about liability.

Still, these are legal questions for a lawyer in India, not random folks on the Internet.

In America, a sole proprietorship could be a dangerous entity.

 

[Ajbuck68]

First, are you actually about to start taking payments, or just planning for the future? Have you confirmed interest and sales? Maybe a pre-order or pre-signup page or similar to confirm interest?

A lot of people are action faking and worry about registering their business, getting a fancy logo, and finding the perfect name all before they’ve made a single sale, often even before they’ve defined their product. I was almost one of those people before finding this forum and reading lots of input. If this is you, just worry about the product. And figure out a way to make sales before it’s even released to confirm and ensure it’s worth the fees to register.

Assuming you aren’t action faking, In the US there aren’t 21, but still a lot to understand. I used ChatGPT to understand the different options and how they would impact liability, taxes, etc.

Don’t take it as 100% truth, as any AI can be confidently wrong, but it can be a very good starting place to jump start your research.

 

[Noyaux]

free trials i will be providing

You should not provide free trials if you are an indie developer. Free trials are for big companies.
It's something big indie makers talk about and it might be good to provide one in your case but in general it isn't

 

[devkaran]

You should always worry about liability.

Still, these are legal questions for a lawyer in India, not random folks on the Internet.

In America, a sole proprietorship could be a dangerous entity.

Yep! Realised a day later that i need to meet a CA regarding this. I’m meeting one the day after tomorrow. Your advice about having a good CA and lawyer is ingrained in me because of MF book!

Thanks for the book! I’ve bought like 6-7 copies of it for friends and family lol

 

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[devkaran]

You should not provide free trials if you are an indie developer. Free trials are for big companies.
It's something big indie makers talk about and it might be good to provide one in your case but in general it isn't

I calculated the CAC for customers and that included the free trials. I need the conversion rate to be more than about 2% for the app to be profitable.

 

[GlobalWealth]

I'm developing an app, and I need a business to accept payments and everything business related. There are 21 different types of businesses in India, and i can't quite figure out how to choose.

The only way to lose money would be from the free trials i will be providing, and all of that will go from my personal cash. I'm not taking any loans or funding from outside, so i don't think i need to worry about liability right now. I will add an agreements page in the onboarding page just to be safe.

Should i worry about liability? Sole proprietorship fits my needs. I will turn it into private limited in future when revenue exceeds 2M inr, until then the lowest cost and least complex option seems to be sole proprietorship. Opinions?

You should definitely be concerned about liability.

I agree with @MJ DeMarco this is too complex of a topic to get real advice on a forum.

You need to consider a lot of factors when determining company structure type and location. But I 100% would not operate any business that I thought had any potential as a sole proprietorship.