Setting up a business for a mobile phone application

lawtz04

Hi Folks

I just wanted some advice on setting up a company and the right way forward. I've spent a while on the phone to various helplines now but am no clearer!

My situation is that I am employed full time, and I also work for myself which I do a separate tax return for and NI payments etc.

I have had an idea for a mobile phone application which I am keen to give a go, but want to keep it separate to my other work, so want to set it up as a new company. I have looked at Limited Liability Partnerships and Limited Companies but I am not sure what type is best for me. If my app does well, I would be looking to sell it so that is why I want to keep it separate.

Can anyone advise? It would like to have just myself in charge so a Limited company I am thinking?

Thanks
Si

earthstorm

If you have an accountant then best to talk to them as they can advise the best way to do this.

paddyrg

From your description, it sounds like a limited company with you as sole director and shareholder may be what you're after. You can simply raise capital by selling shares too, possibly benefit from EIS/SEIS - an accountant can tell you more.

Brassedoff

paddyrg wrote: »

From your description, it sounds like a limited company with you as sole director and shareholder may be what you're after. You can simply raise capital by selling shares too, possibly benefit from EIS/SEIS - an accountant can tell you more.

I don't think he would be able to get SEIS for that type of project. The rules for that are quite tight, I have been running a SEIS and R&D claim for a client (whoops, not allowed to underline experience on here) who fits in that bill.

I tried doing a SEIS claim for a client who had a phone app they believed would qualify, it got turned down by the HMRC on the basis that it did not suit the schemes parameters. They now tend to look for ideas that have real tangible cases.

I may be wrong Paddy, but just my recent and ongoing experience.

Brassedoff

lawtz04 wrote: »

Hi Folks

I just wanted some advice on setting up a company and the right way forward. I've spent a while on the phone to various helplines now but am no clearer!

My situation is that I am employed full time, and I also work for myself which I do a separate tax return for and NI payments etc.

I have had an idea for a mobile phone application which I am keen to give a go, but want to keep it separate to my other work, so want to set it up as a new company. I have looked at Limited Liability Partnerships and Limited Companies but I am not sure what type is best for me. If my app does well, I would be looking to sell it so that is why I want to keep it separate.

Can anyone advise? It would like to have just myself in charge so a Limited company I am thinking?

Thanks
Si

lawtz04, if you have something you really think is worth it, I would also make getting it protected as far as you can a priority.

Do not share the idea with anyone unless they sign a NDA/CDA.

paddyrg

Brassedoff wrote: »

I don't think he would be able to get SEIS for that type of project. The rules for that are quite tight, I have been running a SEIS and R&D claim for a client (whoops, not allowed to underline experience on here) who fits in that bill.

I tried doing a SEIS claim for a client who had a phone app they believed would qualify, it got turned down by the HMRC on the basis that it did not suit the schemes parameters. They now tend to look for ideas that have real tangible cases.

I may be wrong Paddy, but just my recent and ongoing experience.

Indeed you may be very right. My experience of EIS has all been in the media sector, where believe it or not, making a movie can count as R&D. Yes, really! I thought it may be applicable if the app was unwritten as all original software is, to an extent, R&D-type work.

Brassedoff

paddyrg wrote: »

Indeed you may be very right. My experience of EIS has all been in the media sector, where believe it or not, making a movie can count as R&D. Yes, really! I thought it may be applicable if the app was unwritten as all original software is, to an extent, R&D-type work.

Yes, I see where you are coming from, but all apps are written on some sort of App Builder, the one I have two apps on a platform that has some 250,000 apps.

For that reason we were turned down under the scheme as you write a portion, but not 100% of the app, due to the platform requirement.

I would say that there would be wriggle room on what the application does. That would have to be looked at on the case per case basis IMHO.

paddyrg

Brassedoff wrote: »

I would say that there would be wriggle room on what the application does. That would have to be looked at on the case per case basis IMHO.

You're probably on it here. If the app is just a quick bit of spraypaint over any other portal framework type app, then it'll be harder to argue than if it's kernel-level development! Time was when there just weren't platforms to build on!

Movie production, you're pretty much never building on any kind of platform, even though the process is well understood and documented. Perhaps HMRC will be taking a fresh line on that, too, sometime.