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.
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Please consider subscribing to The Startup Lawyer, following @startuplawyer on Twitter, or contact Ryan directly.11 Responses
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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.
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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.
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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.
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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?
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Rio G says:
North,
Where did you find a registered agent for fiddy? Anybody else on R.A’s?
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@ 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.
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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?
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!