33 Responses to “The 5-Second Guide to Choosing Your Startup’s Legal Entity”

  1. David February 2, 2010 at 1:35 am #

    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!

  2. David February 1, 2010 at 8:35 pm #

    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!

  3. Mark Beckwith February 2, 2010 at 12:42 pm #

    That was more like a 2 second guide.

  4. Mark Beckwith February 2, 2010 at 7:42 am #

    That was more like a 2 second guide.

  5. Sandro February 3, 2010 at 6:52 am #

    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.

  6. Sandro February 3, 2010 at 1:52 am #

    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.

  7. North February 3, 2010 at 1:05 pm #

    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.

  8. North February 3, 2010 at 8:05 am #

    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.

  9. Ryan Roberts February 3, 2010 at 3:11 pm #

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

  10. Ryan Roberts February 3, 2010 at 10:11 am #

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

  11. Ryan Roberts February 8, 2010 at 10:38 am #

    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 November 11, 2011 at 6:36 pm #

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

  12. Ryan Roberts February 8, 2010 at 5:38 am #

    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.

  13. Rathan Haran February 16, 2010 at 4:23 pm #

    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?

  14. Rathan Haran February 16, 2010 at 11:23 am #

    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?

  15. Rio G February 24, 2010 at 1:36 pm #

    North,

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

  16. Rio G February 24, 2010 at 8:36 am #

    North,

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

  17. Ryan Roberts February 25, 2010 at 9:43 am #

    @ 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.

  18. Ryan Roberts February 25, 2010 at 4:43 am #

    @ 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.

  19. Rio G March 3, 2010 at 12:35 pm #

    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?

  20. Rio G March 3, 2010 at 7:35 am #

    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?

  21. Ryan Roberts March 10, 2010 at 3:54 pm #

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

  22. Ryan Roberts March 10, 2010 at 10:54 am #

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

  23. Gregory Magarshak October 7, 2010 at 6:20 am #

    Okay so what are the benefits of double taxation again?

  24. Zee February 26, 2011 at 10:09 pm #

    What corporation is best to operate to operate under solo?

    What about P.C?

  25. Dino Dogan June 10, 2011 at 9:20 pm #

    Incorporated in Delaware I presume?

  26. John Eremic March 6, 2012 at 3:50 pm #

    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.

  27. Jake July 13, 2012 at 8:35 am #

    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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