/indie-business

name: indie-business
description: Business fundamentals for indie app developers — LLC/entity setup, taxes, Apple Small Business Program, revenue tracking, hiring contractors, and financial planning for sustainability. Use when user asks about business setup, tax implications, hiring, or financial planning for their app business.
allowed-tools: [Read, Glob, Grep, AskUserQuestion, WebSearch]
last_verified: 2026-07-16
review_by: 2027-06-22

Indie Business Operations

Business fundamentals for indie Apple app developers. Covers the non-code aspects of running an app business — entity setup, taxes, revenue tracking, hiring, and financial planning.

**Disclaimer:** This skill provides general guidance, not legal or tax advice. Always consult a qualified accountant or attorney for your specific situation.

When This Skill Activates

Use this skill when the user:

• Asks about business setup for their app (LLC, S-Corp)
• Wants to understand tax implications of app revenue
• Asks when to form an LLC or incorporate
• Wants guidance on hiring contractors or freelancers
• Asks about financial planning for going indie
• Mentions the Apple Small Business Program
• Wants to understand Apple's payment schedule and revenue tracking

Process

Step 1: Gather Context

Ask the user via AskUserQuestion:

1. **Location**: What country/state are you in? (tax implications vary significantly) 2. **Current status**: Full-time employed, part-time indie, or full-time indie? 3. **Revenue level**: Approximate monthly/annual app revenue (or expected if pre-launch) 4. **Business entity**: Do you currently have an LLC or company? Filing as sole proprietor? 5. **Specific question**: What business aspect are you trying to figure out?

Step 2: Business Entity Options

United States

| Entity | Setup Cost | Annual Cost | Liability Protection | Tax Complexity | Best For | |--------|-----------|-------------|---------------------|---------------|----------| | Sole Proprietor | $0 | $0 | None | Lowest (Schedule C) | Hobby / early stage / < $10K/year | | Single-Member LLC | $50-500 (state-dependent) | $0-800/year (state-dependent) | Yes | Low (pass-through) | Most indie developers | | Multi-Member LLC | $50-500 | $0-800/year | Yes | Medium | Partnerships, co-founders | | S-Corporation | $100-500 + legal fees | $500-2,000/year (payroll, filings) | Yes | High (payroll + corp return) | Revenue > $80-100K/year |

**Sole Proprietor**

• How: Just start earning. Report on Schedule C of personal tax return.
• Pros: Zero paperwork, zero cost, simplest possible setup.
• Cons: No personal liability protection. Your personal assets are at risk if someone sues.
• When to use: Testing the waters, revenue < $10K/year, minimal risk app (no user data, no health claims).

**Single-Member LLC (Recommended for Most Indie Devs)**

• How: File articles of organization with your state. Get an EIN from the IRS (free).
• Pros: Personal liability protection, flexible tax treatment, professional credibility, separate bank account.
• Cons: Annual state fees ($0 in many states, $800/year in California), must maintain separation between personal and business finances.
• When to upgrade from sole proprietor: Revenue exceeds $10-20K/year, OR you handle user data, OR users rely on your app for health/finance/safety.

**S-Corporation Election**

• How: Form an LLC, then file Form 2553 to elect S-Corp tax treatment.
• Pros: Payroll tax savings on profits above "reasonable salary."
• Cons: Must pay yourself a "reasonable salary" with payroll, quarterly payroll tax filings, more complex bookkeeping, annual corporate tax return.

**When to upgrade entity (decision tree):**

Revenue < $10K/year and low-risk app?
├── YES → Sole proprietor is fine
└── NO → Do you handle sensitive user data or have liability risk?
    ├── YES → Form an LLC now
    └── NO → Revenue > $20K/year?
        ├── YES → Form an LLC
        └── NO → Sole proprietor, but plan for LLC soon

Already have an LLC and net profit > $80K/year?
├── YES → Talk to a CPA about S-Corp election
└── NO → Stay as LLC

United Kingdom

| Entity | Best For | |--------|----------| | Sole Trader | Revenue < GBP 50K, simple setup | | Limited Company (Ltd) | Revenue > GBP 50K, liability protection, tax efficiency |

• Sole trader: Register with HMRC for Self Assessment. Simple but no liability protection.
• Ltd company: Register with Companies House. Corporation tax on profits (25%), then dividend tax on drawings. More tax-efficient at higher revenue.

European Union (General Guidance)

• Most EU countries have sole proprietor equivalents and limited liability company options.
• VAT registration thresholds vary by country (but Apple handles VAT on app sales).
• Consider your country's social security implications for self-employment income.
• Consult a local accountant — EU tax rules are country-specific.

India

| Entity | Best For | |--------|----------| | Sole Proprietor | Starting out, simple | | LLP (Limited Liability Partnership) | Liability protection, flexible | | Private Limited Company | Scale, investors, credibility |

• GST registration may be required above threshold (currently INR 20 lakh).
• TDS (Tax Deducted at Source) applies to payments from Apple (check DTAA with Ireland/US).
• Private Limited preferred if you plan to raise investment.

Step 3: Apple Small Business Program

Overview

• 15% commission (vs. 30% standard) on the first $1M in annual proceeds, applying to all app and in-app purchase revenue.
• Auto-enrollment: Apple enrolls you when you are eligible. No application needed if under $1M.
• Resets annually on January 1.

Impact Calculation

| Annual Revenue | Standard (30%) | Small Business (15%) | You Save | |---------------|----------------|---------------------|----------| | $10,000 | $3,000 | $1,500 | $1,500 | | $50,000 | $15,000 | $7,500 | $7,500 | | $100,000 | $30,000 | $15,000 | $15,000 | | $500,000 | $150,000 | $75,000 |