Modern Age is Technology Age and now more than ever people should watch their own interest. For these reasons clans should recognize the dangers they fall in without an Operating Agreement/ Bylaws of their business. Yes I said it, to be exact a business is by definition “the practice of making one’s living by engaging in commerce”. If you are a gamer or member of a group of gamers then you should have a notarized agreement of how the earnings should or would be distributed. Most of you will not even think about this subject and will later run into a argument over distributions of earnings or worse.
You and your friends decide to form a clan, you use clan tag and create a logo. Then you start streaming and gain followers. Once you start gaining followers you decide to make the clan more official. The members of the clan start earning income individually of their streams. This would become the first issue someone will be making less and get jealous and consider the other teammate “greedy”. He might be greedy but it is not his fault that he rose to fame faster than the other one. So a partnership agreement will cancel this issue, and that is your first problem to fix. What will happen when the clan start earning money and you need to distribute that fairly and equal among the members? Well if you do not a have an contract with the employees of the clan you will go by word and in today’s age your word will not uphold in a court of law and one of the parties will be left hanging. So I decided to give you a little hint on how and why you need to treat your clan as a business and what type of business should it be.
First and foremost creating a business plan and realizing what type of organization it will be is the first step.
Limited liability companies (LLCs) are one of the most flexible types of businesses. LLCs combine aspects of both partnerships and corporations. They retain the tax benefits of sole proprietorships and the limited liability of corporations. LLCs are able to choose between different tax treatments. As long as the LLC chooses not to be treated as a C corporation, it retains its flow-through taxation status. Additionally, LLCs benefit from limited liability status. In LLCs, the company exists as its own legal entity. This protects the owners of the LLCs from being personally liable for the operations and debts of the business.
Secondly get a Operating Agreement to establish the way the business is run.Oh E-Sports News what is actually an OA? Well an LLC Operating Agreement is a legal document that outlines the ownership and member duties of your Limited Liability Company. This agreement allows you to set out the financial and working relations among business owners (“members”) and between members and managers. If that is not good enough for you let me give you the link where you can find more info…..https://howtostartanllc.com/what-is-an-llc-operating-agreement
Third you need to get a Employer Identification Number (EIN). To establish that you are going to have employees and will pay them and file taxes accordingly. This form is pretty easy to file and MAKE SURE YOU PUT THE LLC NAME AT THE END…. e.i. ( my clan gamers, LLC. ) and from this point on every time you write the business name you add the LLC. It will save you legal issues and paperwork issues later on.
After this has been established get your domain on google. Get a G-Suite so you can add or remove email domains and create a website. You need to have a contact email and a email between members. You can monitor those emails so you know that your members are not subscribing to pornhub.
Open a Business Bank account, because it not only gives credibility to the clan but most importantly allows the business to collect the funding and then distribute on monthly basis to the employees among way too many things.
Gather your fortitude and seek investors, sponsors and once you have gained sponsorship remember to follow through on their requests after is your brand who is at stake. Sponsors and credibility is what is going to make the team grow fame and financially.
Now that we are talking financially this is how it goes down, ALL earnings are set to be deposited in the business bank account. Earnings from tournaments, ads, streaming and donations as well. If another member decides to hides his winnings or earnings it can be punishable because it goes against the OA. After all the money goes to Business account you can hire a manager, the manager role is to make sure you guys take part on the next tournament, make a celebrity appearance, get sponsors, talk to vendors etc. The with that money you can hire an accountant, one that manages the money of the business, file your taxes, manage budgets and payroll. (Then you will need to pay rent on a location for this official business to have HQ. ) not applicable in most cases. Members can take up to 20-25% of the earnings to be distributed between each other please do not get greedy. If greed comes in it can drive a wedge between members and drain the business in the long run.
Formation of business (IRS,OA,CONTRACTS)
Social media (business accounts)