This is something you probably want to talk to lawyer about. That sounds like it will cost money, but it will probably not be as much as you think and many lawyers can give you a consultation up-front (at no or a minimum fee) to give you a better idea of what the net cost to you would be. Additionally, it costs money to make money, and you're almost certainly better off spending the money up-front on a lawyer than spending the money later on when things get pear-shaped and you're not properly covered.

For context, the three of us who worked on SlimDX, an open-source "spare time" kind of project, formed a legal entity to act as the container for all the work.

You probably have a few reasonable options (all of these are US-specific, which should be fine as that appears to be where you are located):

• Sole proprietorship
• Partnership
• Limited liability company (LLC)

There are additional business structures available in the US (such as S and C corporations), but they are probably too heavyweight for your needs. The IRS has a nice page breaking down all the business entities and what the implications are for ownership, taxes, et cetera. I feel like I see a lot of indie developers form LLCs, but that's purely my own opinion and should not be considered legal advice.

You should settle the issue of business organization and legal issues surrounding ownership of the intellectual and physical property as soon as possible, ideally before you develop anything significant. You want to be able to answer questions such as "who owns what if this whole things collapses, what if one of the members leaves, how is our profit split up?" and more, and the sooner you do that the less complicated things will be later. Talk to a lawyer.

A lawyer friend of mine wrote this article on "The Business and Legal Issues Surrounding Game Development Team-Building" and also this chapter concerning legal challenges in a book. I'd recommend reading them.

Here's another article on a "legal crash course for indie developers" you may want to check out. Note that I can't vouch for this author in any way, I just stumbled across it while researching for this answer.

This is something you probably want to talk to lawyer about. That sounds like it will cost money, but it will probably not be as much as you think and many lawyers can give you a consultation up-front (at no or a minimum fee) to give you a better idea of what the net cost to you would be. Additionally, it costs money to make money, and you're almost certainly better off spending the money up-front on a lawyer than spending the money later on when things get pear-shaped and you're not properly covered.

For context, the three of us who worked on SlimDX, an open-source "spare time" kind of project, formed a legal entity to act as the container for all the work.

You probably have a few reasonable options (all of these are US-specific, which should be fine as that appears to be where you are located):

• Sole proprietorship
• Partnership
• Limited liability company (LLC)

There are additional business structures available in the US (such as S and C corporations), but they are probably too heavyweight for your needs. The IRS has a nice page breaking down all the business entities and what the implications are for ownership, taxes, et cetera. I feel like I see a lot of indie developers form LLCs, but that's purely my own opinion and should not be considered legal advice.

You should settle the issue of business organization and legal issues surrounding ownership of the intellectual and physical property as soon as possible, ideally before you develop anything significant. You want to be able to answer questions such as "who owns what if this whole things collapses, what if one of the members leaves, how is our profit split up?" and more, and the sooner you do that the less complicated things will be later. Talk to a lawyer.

A lawyer friend of mine wrote this article on "The Business and Legal Issues Surrounding Game Development Team-Building" and also this chapter concerning legal challenges in a book. I'd recommend reading them.

Here's another article on a "legal crash course for indie developers" you may want to check out. Note that I can't vouch for this author in any way, I just stumbled across it while researching for this answer.