The growth of the e-Sports sector has meant that, for many individuals, videogames go from being a hobby to becoming a profit-making business. And businesses are run by companies.
This would not be a problem if e-Sports were recognized as a sport, because, if it were, this type of business could be run within the legal framework of a sports club.
However, the truth is that traditional sports clubs, such as football and basketball, do not use a sports club legal framework. On the contrary, they operate either as joint-stock or limited liability companies.
In fact, most e-Sports sports clubs are set up as Limited Liability Companies (LLCs). Among the best known are Gbots, S.L., Giants Gaming e-Sports, S.L., and Gamers 2 Media, S.L.
There are undoubted advantages to an LLC that make it the best option as a legal framework for e-Sports clubs. The most important advantage is that the sports club acquires legal personality and the corresponding rights and obligations. Consequently, it can draw up contracts for events such as sponsorship or participation in leagues, championships and the like. Moreover, all the computer equipment can be put in its name and it can receive cash prizes from competitions. Finally, like any other company, the partners are not obliged to pay the debts of the club with their personal assets.
While it is true that a commercial company legal framework, whether joint-stock or LLC, is not the ideal vehicle to develop this type of business, it is the “least bad” option in the event that a hobby begins to turn a profit.
