The online gaming industry is one of the fastest-growing industries in the world, with a projected value of over $152 billion by 2025. It is also a highly regulated industry that requires careful consideration when starting a business. One of the most important decisions a business owner can make is deciding whether or not to incorporate their iGaming company.
Incorporating a company has several advantages compared to operating as a sole proprietorship or partnership. This article discusses some of the reasons why you need to incorporate your iGaming company.
Limited liability protection
One of the most significant advantages of incorporating a company is limited liability protection. This protection allows company owners to limit their potential personal liability for any debts, lawsuits, or obligations that the company may face. In other words, if the company goes bankrupt or gets sued, the owner’s personal assets, such as their house or car, will be protected.
This protection is particularly important in the iGaming industry, which is subject to strict regulations and compliance requirements. By incorporating your iGaming company, you can protect your personal assets in the event of issues.
Access to capital
Another advantage of incorporating a company is access to capital. A company can issue shares and raise capital by selling these shares to investors. Depending on the type of company you incorporate—whether it’s a private or public company— you can solicit donations from venture capitalist, angel investors or institutional investors to help fund players, software developers, acquisition or expansion.
This is becoming increasingly important for iGaming businesses, as the industry continues to grow and become more competitive. Starting and growing an iGaming company can be expensive, and having access to capital can help level the playing field and give your business a better chance of success.
Incorporating your iGaming company can also provide tax benefits that are not available to sole proprietors or partnerships. For example, corporations can deduct certain expenses, such as salaries or rent, from their taxable income. Additionally, some corporations may be eligible for lower tax rates, exemptions, or credits.
Incorporating a company can also help you avoid the self-employment tax, which is a tax that is levied on sole proprietors and partnerships. By incorporating your iGaming company, you can pay yourself a salary, which is subject to income tax withholding and payroll taxes, instead of self-employment tax.
Incorporating your iGaming company can also help you establish a more professional image. By incorporating, you can use “Inc.” or “Ltd.” after your company name, which can provide a more professional and established image to potential customers, investors, and partners.
In addition to a more professional image, incorporating your iGaming company can also help you gain credibility in the industry. As an incorporated company, you will have to comply with certain regulations, standards and requirements, which can demonstrate your commitment to compliance and legitimacy.
Increased flexibility and ownership
Incorporating your iGaming company can also provide greater flexibility and ownership. While a sole proprietorship or partnership can be structured in various ways, incorporating allows for more formalized structuring that can be tailored to meet the particular needs of your business.
A corporation, for example, can issue different classes of shares, holder certain voting rights, set limitations on shareholder authority and provide protections for certain shareholders. The corporate bylaws can also control management structure, define corporate officer roles and provide limitations or requirements for shareholder approval.
Incorporating can also provide greater ownership options. With a sole proprietorship or partnership, the business owner(s) have unlimited liability and no clear distinction between personal and business assets. With a corporation, shareholders can own a portion of the business through equity ownership and receive dividends or share in the sale of the company
In conclusion, incorporating your iGaming company provides numerous benefits that can help your business succeed in a highly regulated and competitive industry. By incorporating, you can limit your personal liability, access to capital, get tax benefits, establish a more professional image, and enjoy increased flexibility and ownership.
Starting and growing an iGaming company can be challenging, so it’s crucial to make informed decisions about the structure and strategy of your business. Incorporating your company is one of the most important decisions you will make, and it can have a significant impact on the success of your business in the long run.
For over 26 years, Fast Offshore has worked in the iGaming sector with a focus on corporate services. During that time, we have assisted countless entrepreneurs in launching their iGaming company. We can take care of helping you choose the right jurisdiction, incorporating a company, getting licensed, payments, compliance, and all ongoing maintenance. Find out more when you contact us today!