I’ve never had a client’s accountant recommend any legal form besides the LLC for a new startup. Even though I heart corporations, I still believe the LLC can be an appropriate legal entity for some companies and ventures. But when it comes to a startup looking to (i) raise capital, and/or (ii) issue incentive equity compensation, the corporation is the proper choice.
LLCs are great because they are “simple.” But eventually the startup will have complex legal needs and the startup LLC will end up having to draft corporation-like provisions into its documents. It ends up being much easier to convert to a corporation at that point rather than adapting the LLC to operate like a corporation.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer at Roberts Zimmerman PLLC with more than two decades of experience advising startups and venture capital investors. He is the author of “Acceleration” and StartupLawyer.com.
