Christina-
I can share a few thoughts about the process I went
through in forming Necromancer Games. Now I am an
attorney, so that gave me a little bit of a leg up.
I'll take a few of your questions in turn:
1. Is getting a lawyer from the get-go necessary?
I'll take the hard one first. You are certainly
running risks in not speaking with one. Only you can
decide how to weigh those risks. I will say that I
believe that the open game "safe harbor" does
exist--look at how much stuff is out and how great
WotC is being about it. Really, this question relates
to business experience. The more business experience
you have maybe the less need for a lawyer.
You also need to measure your type of product. Are you
thinking of a whole new d20 based game system or are
you just thinking of doing a book of monsters or a
dungeon module? I would say the latter two are much
"safer" in terms of problems they might raise.
So if you are doing this by yourself, have no business
experience and want to do a new game system I would
say you really better talk to a lawyer. If you are
going to do some dungeon modules for free on the net
with some pals who have game industry experience then
maybe there is less of a need.
I think the business experience aspect might be more
important than the legal aspect. I really believe the
OGL and d20 STL (with the accompanying guides) are
pretty easy to figure out as to what you can and cant
do.
2. Should a start-up incorporate?
Choice of entity is an impoartant decision with
business, liability, control and taxation
ramifications. You need to weigh how important these
things are to you so you can decide what entity to
choose.
One of the good things about the "safe harbor" concept
of the OGL is that the liability aspect (which is
usually one of the primary reasons to incorporate)
should be less of a worry (at least once the licenses
are finalized). This should allow people to do more
stuff as partnerships or sole proprietorships without
requiring everyone to run out and incorporate.
Necromancer started as a sole proprietorship with a
few independent contractors (artists, other writer,
etc). But once the WW thing (we teamed up with White
Wolf for them to do our production and distribution)
started to materialize we decided we might actually
make some money and there might be tax issues so we
incorporated (we chose to be an S-corp for taxation
purposes). Other possible entities are (primarily)
Limited Liability Company, Limited Partnership and
Partnership (in addition to Sole Proprietorship). Your
state law controls how these are formed. The advantage
of the Sole Proprietorship is that it is real easy to
start. Usually a fictitious business name and a tax ID
number are all you need, which means filling out a few
forms at the local city hall. Other entities require
more money and more formailties. And you will probably
need to consult a tax guy.
I would say dont rush right out and worry about
incorporating. That is a big up front cost. First, if
you are serious about publishing, get some manuscripts
together and get ready to go. You cant be sued just
for working up the manuscripts. Then see where you
are. If you incorporate then, fine. But dont think you
need to incorporate before you even do anything.
But this is certainly an issue where I had an
advantage being a lawyer and having a buddy who is a
big time corporate accountant type to give me tax
ramification advice. With the "safe harbor" in effect
(which I firmly believe will happen) the biggest
entity selection issue you may face will be taxation
issues.
And by the way, incorporating doesnt necessarily
shield you personal assets. It just makes it harder to
get them by providing a layer of protection. It is not
unheard of for a sole proprietorship masquerading as a
corporation to have the "corporate veil" pierced and
the assets of an officer or director reached. I'm not
rendering legal advice on this point, just raising an
issue. I dont want you to think that incorporation is
a 100% protection against liability.
3. WotC as "Big Bad Wolf"
I understand your apprehension. I had the same
questions. But I can say from personal experience that
they are committed to the "safe harbor" approach for
persons to use d20 material in an open game context. I
have product out (with WW), the guys at Fiery Dragon,
Atlas and Green Ronin also have product out. All of us
have lots of stuff on the way. Our third product is at
the printer and the manuscript was just submitted on
our fourth product with the 5th almost completed (not
to mention Relics and Rituals and the CC2). I suspect
the guys at Atlas, etc, are in the same boat. I'm not
bragging, I am simply saying that this movement is
very much alive, WotC knows about it and has been
extremely supportive of all our efforts. I think they
are even a little surprised (pleasantly) at how well
and quickly the d20 support has gotten off the ground.
And I think all of us would tell you that the WotC as
Big Bad Wolf concern--while a proper historical
concern--is just not a current reality. I know there
are nay-sayers and conspiracy theorists but I am on
the front lines actually churning out product and WotC
has been great.
Here is a piece of advice you didnt ask for but was
probably the VERY BEST THING I DID AS A NEW COMPANY:
Contact Eric Rowe at The Wizard's Attic. Check out his
website. Those guys are awesome with new game
companies. I started with them. I know Atlas, Green
Ronin and Fiery Dragon are with Wizard's Attic also.
More than anyone else in the industry, I have Eric to
thank for helping me get started.
I hope that helps.
Clark Peterson
President
Necromancer Games
=====
http://www.necromancergames.com
"3rd Edition Rules, 1st Edition Feel"
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