The 5-Second Guide to Choosing Your Startup’s Legal Entity
Corporation.
Because if you can log on to the Internet, you can handle the complexity of a corporation. Don’t be scurred.
About the Author
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
Subscribe & Connect
Please consider subscribing to The Startup Lawyer, following @startuplawyer on Twitter, or contact Ryan directly.32 Responses
-
David says:
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!
-
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.
-
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 says:
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.
-
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-
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 says:
What is the rest of the 9/10th of the incorporation about. I’m kind of discouraged now
-
-
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.
-
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?
-
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 says:
North,
Where did you find a registered agent for fiddy? Anybody else on R.A's?
-
North,
Where did you find a registered agent for fiddy? Anybody else on R.A's?
-
@ 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.
-
@ 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.
-
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?
-
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?
-
[...] Entity Choice: Corporation or Corporation (2) State of Incorporation: Delaware (3) Authorized Shares in Charter: 10,000,000 [...]
-
[...] $("#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 [...]
-
[...] 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 [...]
-
Zee says:
What corporation is best to operate to operate under solo?
What about P.C?
-
[...] Entity Choice: Corporation or Corporation (2) State of Incorporation: Delaware (3) Authorized Shares in Charter: 10,000,000 [...]
-
[...] 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 says:
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.
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!