Legal aspects of making a for-profit website?


Disclaimer: I've crossposted on Reddit.

I'll preface this by saying that I'm in Canada, so some of the legal aspects might differ from the US, but I'm sure lots of them carry across.

I'm wondering what the legal aspects are of making a for-profit website are, and if someone could direct me to a good howto/guide about this sort of thing.

I'm making an in-browser video game, and I want to follow the model where it's free to play with ads and you can subscribe to have ad-free. The website would make revenue from ads and from subscription fees.

What I want to know is, do I need to register as a business or incorporate, or can I make profit as an individual? Are there templates for "agreements" that people sign to subscribe to the service? What resources are available for someone like me who knows nothing about the legal/procedural issues?

This is a really small startup, so paying a lawyer would be astronomically higher than any profit, or the other costs.

I'm a computer scientist, with no background in business. I'm not expecting to make tons of money off of this, I just want to make sure I don't get into legal trouble.

EDIT: For the most part, I'm looking for links to resources than for actual advice. I realize there are lots of howto guides, but I can't seem to find them.

Getting Started Web Legal Website Legal Entity

asked Oct 15 '13 at 13:50
101 points
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1 Answer


Well here is the Basic process for the US, it may be different in Canada especially due to entity structures, etc

1. Company registration: It seems Canada only has Corporation or Sole Proprietorship available as a structure. I would suggest going with a Corporation, but you have to do further research as far as Taxes go. Problem with Sole Proprietorship is basically, you are the business, any losses, legal liabilities, etc goes directly against you. You may think "Oh, I'll never get sued", but in 99% of the cases it's not if, it's when. I'm sure you don't want to lose your life savings because someone thought that the name of your game is too similar to theirs. Perfect example is Evony, they were sued multiple times for infringing characters. Also if you want to charge money, you want it going through Corporate accounts.

2. Tax Structure: In the US, you would get tax structure setup according to the entity type, either as company taxation or pass-through (basically pass-through means it's considered personal income). I'm not too sure for Canada, the little I checked online, pass-through in Canada is only for partnership and SP

3. Accounts: Get a business account, and use it to pay for everything and receive all revenue. DO NOT use personal accounts or credit cards. Using personal accounts can be used to pierce the corporate veil (protection a corp provides to share holders).

As far as legal templates go. Check a few games similar to yours and copy them, just make sure to change the names and addresses to your Company :). If they are big time games, they are usually written by excellent lawyers. Even though everyone's situation is different, if you look at the terms of service docs, they are literally 90% are nearly identical. One big thing to look at is the Jurisdiction, make sure to change US to Canada, and change Jurisdiction to your Province

answered Oct 15 '13 at 21:14
820 points

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