I never incorporated, but I formed an LLC. I did it when my startup:
1. made money
2. could become a legal liability
Ask HN: At what point did you incorporate for your startup or side project?
31–40 of 57 posts
Re: Ask HN: At what point did you incorporate for your startup or side project?
#32I have one corporate entity that I use for both my "side projects" and for consulting work. Mostly did it to ensure limited liability. Also, if one of the projects goes big, it will make things easier later on. Also, if we're talking about iPhone apps and such, a corporate name looks more professional in the app store.
> Mostly did it to ensure limited liability
Did you consult with a lawyer? I've heard that "limited liability" doesn't really apply to one-person operations, it's intended to protect liability between multiple participants - though that may depend on the state.
Re: Ask HN: At what point did you incorporate for your startup or side project?
#33Unless your customers need you to incorporate, the idea is to incorporate when you start seeing potential liability. One of the earliest sources of potential liability, is when you hire a W2 employee (in the US). So that is a great time to incorporate i.e. before hiring your first W2 employee. And if you don't intend to raise money, issue stock, or setup international offices any soon, then LLC is a far simpler, cheaper (taxation at exit) structure to setup.
Re: Ask HN: At what point did you incorporate for your startup or side project?
#34You should incorporate when you make $1500 and/or when you need to start signing contracts. Why $1500? Stripe Atlas is $500 (comes with enough AWS credits to host your app for at least a year) and your increased accounting cost will be ~$1000 which is a high estimate.
Your company will start at break even, and you will be able to start a clean paper/bank/accounting trail for your profits and expenses.
Re: Ask HN: At what point did you incorporate for your startup or side project?
#35Similar question but for those who live in a place where legal liability is not a concern and are working solo. Is there any significant advantage to incorporate until you are "big" ? It's just a lot of paperwork & compliance headache IMO.
Re: Ask HN: At what point did you incorporate for your startup or side project?
#36Formed a Florida S-Corp for my side project about 5 months ago (Single member LLCs in Florida don't provide as much liability protection as they do in the rest of the country). Started accepting sign-ups about 5 days ago. Have had 2 trial sign-ups, $0 revenue so far Maybe I should advertise? :D
Work on organic channels and improve the product. Probably it’s not very good right now, it’s hard to do things without customer feedback. Probably paying for customers now will be expensive. Assuming it’s saas even good projects can be expensive to advertise due to long payback period.
Also ad channels get saturated easily in saas in my experience. Start today building your organic channels and get the compound growth started.
Re: Ask HN: At what point did you incorporate for your startup or side project?
#37Re: Ask HN: At what point did you incorporate for your startup or side project?
#38I haven't incorporated and don't intend to. I don't need limited liability, and I am not working with companies that require me to incorporate. Incorporation would mean a ton of paper work, more taxes (in Canada at least), more complications, and 3x the accountant's fees. For what it's worth, my project nets 200k, is 3 year-old, and I have a degree in accounting and taxation.
Curious, so are you running as a sole proprietor? Wouldn’t it be eligible for the small business deduction?
Re: Ask HN: At what point did you incorporate for your startup or side project?
#39I haven't incorporated and don't intend to. I don't need limited liability, and I am not working with companies that require me to incorporate. Incorporation would mean a ton of paper work, more taxes (in Canada at least), more complications, and 3x the accountant's fees. For what it's worth, my project nets 200k, is 3 year-old, and I have a degree in accounting and taxation.
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Re: Ask HN: At what point did you incorporate for your startup or side project?
#40Not on HN frontpage anymore, not marked as dead or flagged, but just vanished. Yet older news with less engagement sit prominently on in front.