Startup Lawyer | The 5-Second Guide to Choosing Your Startup’s Legal Entity
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The 5-Second Guide to Choosing Your Startup’s Legal Entity

33 Comments
  • David
    Posted at 01:35h, 02 February Reply

    Could you have made it the 6 second guide and removed the ambiguity about which corp you prefer? Has to be the C Corp – the rest are pretenders!

  • David
    Posted at 20:35h, 01 February Reply

    Could you have made it the 6 second guide and removed the ambiguity about which corp you prefer? Has to be the C Corp – the rest are pretenders!

  • Mark Beckwith
    Posted at 12:42h, 02 February Reply

    That was more like a 2 second guide.

  • Mark Beckwith
    Posted at 07:42h, 02 February Reply

    That was more like a 2 second guide.

  • Sandro
    Posted at 06:52h, 03 February Reply

    Haha, brilliant. I agree with @David though, C all the way. S seems like a muddled tax hell…

    From now on when asked about which type of Corp to choose, I will be pointing anyone and everyone to this post.

  • Sandro
    Posted at 01:52h, 03 February Reply

    Haha, brilliant. I agree with @David though, C all the way. S seems like a muddled tax hell…

    From now on when asked about which type of Corp to choose, I will be pointing anyone and everyone to this post.

  • North
    Posted at 13:05h, 03 February Reply

    And who needs legalzoom or any other middleman? It was easy. 89 bucks and Fiddy for a registered agent, why pay more? Well ok, an embossing seal would be neat.

    However I was surprised that DE isn't open on weekends or non-east-coast-business-hours, not even their online "check corporate status" service… weird.

  • North
    Posted at 08:05h, 03 February Reply

    And who needs legalzoom or any other middleman? It was easy. 89 bucks and Fiddy for a registered agent, why pay more? Well ok, an embossing seal would be neat.

    However I was surprised that DE isn't open on weekends or non-east-coast-business-hours, not even their online "check corporate status" service… weird.

  • Ryan Roberts
    Posted at 15:11h, 03 February Reply

    Weird. I just noticed the apostrophe(s) is a no-show on post titles.

  • Ryan Roberts
    Posted at 10:11h, 03 February Reply

    Weird. I just noticed the apostrophe(s) is a no-show on post titles.

  • Ryan Roberts
    Posted at 10:38h, 08 February Reply

    North-

    You would pay more to make sure your IP is properly placed in the corporation and issue stock to your founders on a vesting schedule. State templates or legalzoom just get the certificate of formation/articles/charter filed. That's about 1/10th of a proper startup incorporation if you have IP and/or more than 1 founder.

    • rebeca mercedes
      Posted at 18:36h, 11 November Reply

      What is the rest of the 9/10th of the incorporation about. I’m kind of discouraged now :(

  • Ryan Roberts
    Posted at 05:38h, 08 February Reply

    North-

    You would pay more to make sure your IP is properly placed in the corporation and issue stock to your founders on a vesting schedule. State templates or legalzoom just get the certificate of formation/articles/charter filed. That's about 1/10th of a proper startup incorporation if you have IP and/or more than 1 founder.

  • Rathan Haran
    Posted at 16:23h, 16 February Reply

    If you have an S-corp right now, would you advise to convert to a C-corp, and what are the pros and cons to doing so aside from 'double taxation' and more paperwork?

  • Rathan Haran
    Posted at 11:23h, 16 February Reply

    If you have an S-corp right now, would you advise to convert to a C-corp, and what are the pros and cons to doing so aside from 'double taxation' and more paperwork?

  • Rio G
    Posted at 13:36h, 24 February Reply

    North,

    Where did you find a registered agent for fiddy? Anybody else on R.A's?

  • Rio G
    Posted at 08:36h, 24 February Reply

    North,

    Where did you find a registered agent for fiddy? Anybody else on R.A's?

  • Ryan Roberts
    Posted at 09:43h, 25 February Reply

    @ Rathan – I'd seek a tax advisor if you are revoking your s-corporation status for tax reasons. I typically see startups revoke their s-corporation status when they issue a 2nd class of stock.

  • Ryan Roberts
    Posted at 04:43h, 25 February Reply

    @ Rathan – I'd seek a tax advisor if you are revoking your s-corporation status for tax reasons. I typically see startups revoke their s-corporation status when they issue a 2nd class of stock.

  • Rio G
    Posted at 12:35h, 03 March Reply

    Ok, I'll try this again with Ryan.

    Say Ryan,

    Do you know the cheapest route to go for a Registered Agent?I've been told that there are remote/online ones that are pretty good, do you trust that?

  • Rio G
    Posted at 07:35h, 03 March Reply

    Ok, I'll try this again with Ryan.

    Say Ryan,

    Do you know the cheapest route to go for a Registered Agent?I've been told that there are remote/online ones that are pretty good, do you trust that?

  • Ryan Roberts
    Posted at 15:54h, 10 March Reply

    Rio – Not sure, I use either CT Corp or BlumbergExcelsior.

  • Ryan Roberts
    Posted at 10:54h, 10 March Reply

    Rio – Not sure, I use either CT Corp or BlumbergExcelsior.

  • If I Launched A Startup | Social Matchbox
    Posted at 20:49h, 22 March Reply

    [...] Entity Choice: Corporation or Corporation (2) State of Incorporation: Delaware (3) Authorized Shares in Charter: 10,000,000 [...]

  • If I Launched a Startup | Bookmarks
    Posted at 04:00h, 31 May Reply

    [...] $("#startbox").html(" Here’s what I’d do in the beginning:Incorporation(1) Entity Choice: Corporation or Corporation(2) State of Incorporation: Delaware(3) Authorized Shares in Charter: 10,000,000 [...]

  • Top Legal Mistakes Entrepreneurs Make: Choice of Entity « Venture Best
    Posted at 13:33h, 25 June Reply

    [...] lot of confusion on which entity is best.  Some experienced West Coast start-up lawyers provide a five second answer that a corporation is recommended.  Some law firms in the Upper Midwest consistently [...]

  • Gregory Magarshak
    Posted at 06:20h, 07 October Reply

    Okay so what are the benefits of double taxation again?

  • Zee
    Posted at 22:09h, 26 February Reply

    What corporation is best to operate to operate under solo?

    What about P.C?

  • Dino Dogan
    Posted at 21:20h, 10 June Reply

    Incorporated in Delaware I presume?

  • TheFoundersDesk.Com » StartUp Checklist – If Launched a Startup
    Posted at 17:07h, 06 September Reply

    [...] Entity Choice: Corporation or Corporation (2) State of Incorporation: Delaware (3) Authorized Shares in Charter: 10,000,000 [...]

  • The Checklist Every Entrepreneur Should Read Before Launching a Startup
    Posted at 09:31h, 12 September Reply

    [...] A Startup…Tweet Here’s what I’d do in the beginning: Incorporation 1. Entity Choice: Corporation or Corporation 2. State of Incorporation: Delaware 3. Authorized Shares in Charter: 10,000,000 [...]

  • John Eremic
    Posted at 15:50h, 06 March Reply

    Mr. Roberts – if you were incorporating in New York City, would the answer be the same? Consider that NYC does not recognize subchapter S and takes a nice 8.85% bite. New York State also taxes S-Corps, although less.

  • Jake
    Posted at 08:35h, 13 July Reply

    Why not an LLC at the start-up stage? Isn’t that a much easier structure?… limited liability of a corporation, flow-through taxation like a partnership. What benefit does a Corporation have over the LLC? Is it related to the later funding stages?

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