Setting up a Limited Company for an App I want to have created

[Ducky13]

Hi All,

I have an App idea & want to start making some progress with it. The first step would be for me to approach developers, but the problem is that the App idea is unique & I would need to draft an NDA for them to sign. I believe that in order to do that I would need to have a limited company setup in my name so that I can state the name of my company on the NDA. Is that correct? Either way, I am sure that at some point down the line I will need to have a limited company setup in my name. In light of this, my questions are -

• How do I setup a limited company? Are there costs involved?
• Am I OK to setup a limited company that isn't generating any cash-flows & won't be for the foreseeable future?
• Does the company name have to be the same name as the App?
• If I have a partner then do I need to setup the company with him? Or can he setup his own limited company?

Thanks in advance for any help!!

Ducky

 

[Scalloway]

• How do I setup a limited company? Are there costs involved?

You apply online to Companies House. It costs £12.

• Am I OK to setup a limited company that isn't generating any cash-flows & won't be for the foreseeable future?

Yes you can leave it dormant as long as you do the correct filings with Companies House each year.

• Does the company name have to be the same name as the App?

No.

• If I have a partner then do I need to setup the company with him? Or can he setup his own limited company?

That can depend on a lot of things. If you take him into your company you should draw up a shareholders agreement. Or his company can contract to work for yours.

 

[Ducky13]

Thank you Scalloway! That's really helpful. Couple of additional questions -

What would my SIC code be?
Do I have to state a company name on an NDA?

Thanks

 

[fisicx]

You don't need to set up admired company. Anyone can create an NDA.

Not that this will make any difference. There are thousands of apps, one more no matter how unique isn't going set the world on fire. Just ask the thousands of people just like you who thought their app would be successful.

 

[Scalloway]

What would my SIC code be?
Do I have to state a company name on an NDA?

SIC codes here

http://www.siccodesupport.co.uk/sic-division.php?division=62

If you are creating a legal contract you need to name the contracting parties.

@fisicx has given some useful advice.

 

[Ducky13]

Thanks guys. So from what I gather, I DON'T need to setup a limited company in order to create an App that could potentially be making me money once it is live? Correct?

 

[Scalloway]

Yes you don't need to set up a limited company.

 

[The Byre]

Hi All,

I have an App idea & want to start making some progress with it. The first step would be for me to approach developers, but the problem is that the App idea is unique & I would need to draft an NDA for them to sign.

We get about two of these posts every week.

1. I have an idea for a mobile app.
2. I need a developer, as the simple task of creating an app is beyond me.
3. The idea is unique / world-beating / revolutionary / mind-blowing / awesome.
4. They would have to sign an NDA.

In the course of the following discussion, someone points out that without a large pot of money to market the app, nothing will happen. At that point, the OP realises that launching an app into today's overcrowded market will cost real money, so he/she comes to point number five -

5. How do I get funding and/or investment for my app?

Next!

 

[fisicx]

Thanks guys. So from what I gather, I DON'T need to setup a limited company in order to create an App that could potentially be making me money once it is live? Correct?

Correct. But what you do need is a large pot of money.

 

[Ducky13]

OK thanks guys. I've already accounted for the development & the marketing, the latter being much more expensive.

 

[The Byre]

Here's my 30 cents worth, for all of those who want to launch an app and have some killer idea for a new app -

1. Find out if this will fly. Don't ask yourself, ask a range of people and give tham a choice of possible apps, inc. your own. If it comes out as the clear winner, move to step two.

2. Learn to write a simple app. There are countless tools to simplify the writing of apps and forums you can join to discuss difficulties and wrinkles involved. Learn to use these tools and get stuck into the world of mobile apps. Even if you end up hiring a developer or five, you will still need this basic knowledge to be able to understand what the hell is going on and why some things are easy to do and other totally off the table.

3. Now write this killer app, or get the thing written. If you write it yourself, then you have not (yet) spent any money on marketing and development, but get the damn thing out there and working! You can always make it bigger, better, have more options as things progress.

4. Social media is now your friend - use every tool out there! Every message board, twitter, you name it and you must be all over it. If your app now gains traction and first hundreds and then thousands of folk start using it, move to step five.

5. Plough every penny into pukka marketing, but make sure that every penny counts, so no wasteful ppc at a £1 a click or any nonsense like that. Every trick in the book and every outlet must be explored. Don't just rely on on-line marketing. If needs be, hand out leaflets at Victoria Station and along Reagent Street. Every new user may (if you app is any cop whatsoever) turn into 100 new users, so pester every possible human with a mobile phone and one working thumb!

 

[obscure]

Thanks guys. So from what I gather, I DON'T need to setup a limited company in order to create an App that could potentially be making me money once it is live? Correct?

No. That was not the question you asked in your opening post and is not the question people answered.

You asked if you needed a Ltd company in order to sign an NDA - you don't. Any legal entity (a Ltd or a Person) can sign/enter into a non-disclosure agreement. But that has nothing to do with making money.

You may earn no money from your app (that is the likely outcome given how over saturated the market is) or you may win the lottery and be one of the handful that make lots of money. In the latter situation it would most likely be more tax efficient to be a registered company. You should discuss this with your accountant.

 

[The Byre]

The last time I signed an NDA, it was to do with data error correction protocols and the use of non-binary code within a time-division-multiplexing environment for high resolution displays. It was different to all the otherwise binary systems and I was happy to sign.

Apps ain't like that! There are only a handful of basic app concepts (e.g. platform, database, gateway) and a developer would be somewhat reluctant (and bloody foolish) to sign an NDA for a concept that he or she is very likely to meet again and again and again and again!

It's like a movie. There are just ten basic movie plots, such as 'Monster in the House', 'Unrequited Love', The Journey of Life, Buddy Movies - and so on. Imagine you are a producer and some schmuck wants you to sign an NDA on a sci-fi 'Monster in the House' movie treatment.

You sign. You read the script. It's krap. You pass. Ten years later you get another sci-fi 'Monster in the House' treatment, but this one is a killer. You produce this one and Schmuck Number One sues for breach of that poxy NDA from a decade ago!

NDAs are to cover key aspects of a process, product or service. They are NEVER there for ideas!

 

[Ducky13]

Thanks everyone... Some very useful posts