Startup incorporation checklist • Hacker News Board

Re: Startup incorporation checklist

#111

Post by eonw » Wed, Jun 29, 2016, 4:00 PM UTC

i always incorporate in my home state when starting a new venture, its much easier to manage.

all assets can later be sold to another LLC or Corp as the need arises, but doing all these steps in advance can just cause undue headache and complexities.

also, california is about the least small business friendly state in the union. and AFAIK, having a delaware corp doesnt save you all that much in taxes anyways. so glad i no longer have to deal with that state.

complex corp setups also confuse some investors, certainly if you are raising capital from those not savvy in the plethora of ways corps are setup to circumvent taxation and game the domicile game. they basically think you are a scammer(been there)

just 0.02

Re: Startup incorporation checklist

#112

Post by eonw » Wed, Jun 29, 2016, 4:03 PM UTC

swampthing wrote: post #28

elmar wrote: post #15

Earlier quoted context omitted.

Swampthing :) do you think is a good idea to incorporate in DE with only 5,000 shares? that gives a minimum anual tax of $175. The minimum tax for the Assumed Par Value Capital Method of calculation is $350. you save $175/year and any time you wish or for example receive external investment you can do a stock split or authorise more shares.

I think it really depends on your situation, in terms of how likely you are to receive external investment like you mentioned (and when), and how much that $175 / year matters to you. By external investment, I think venture capital is probably the most relevant category - other types of investors may not be as insistent. For example, amending the certificate of incorporation to authorize more shares is probably going…

why would it cost $500 to issue new shares, its just a document you sign and put in your ledger. at least that's how my texas corp does it.

though i do agree, some of these small savings may or may not make sense depending on what you want to do in the future.

Re: Startup incorporation checklist

#113

Post by swampthing » Wed, Jun 29, 2016, 5:22 PM UTC

elmar wrote: post #107

swampthing wrote: post #28

Earlier quoted context omitted.

I think it really depends on your situation, in terms of how likely you are to receive external investment like you mentioned (and when), and how much that $175 / year matters to you. By external investment, I think venture capital is probably the most relevant category - other types of investors may not be as insistent. For example, amending the certificate of incorporation to authorize more shares is probably going…

tank you very much for your detailed answer. Incorporating thinking ahead on the VC route do you think is a good idea to allocate prefered stock one or more series?

Most likely not - the rights and preferences of the preferred stock will get determined by the deal you negotiate with the VC, so anything you have before that will likely get thrown away anyways. It'd be very unusual to start off with preferred stock at formation.

Re: Startup incorporation checklist

#114

Post by swampthing » Wed, Jun 29, 2016, 5:29 PM UTC

eonw wrote: post #112

swampthing wrote: post #28

Earlier quoted context omitted.

I think it really depends on your situation, in terms of how likely you are to receive external investment like you mentioned (and when), and how much that $175 / year matters to you. By external investment, I think venture capital is probably the most relevant category - other types of investors may not be as insistent. For example, amending the certificate of incorporation to authorize more shares is probably going…

why would it cost $500 to issue new shares, its just a document you sign and put in your ledger. at least that's how my texas corp does it. though i do agree, some of these small savings may or may not make sense depending on what you want to do in the future.

I'm not familiar with Texas law, but it seems likely that there's more to it than that... at the very least, you probably need board approval before issuing equity.

But in any event, I was referring to authorizing more shares under the certificate of incorporation - which is basically setting the maximum number of shares that the company can issue. That's a different process than issuing shares (though every time you issue shares, you should make sure you have enough authorized and available for issuance).

Re: Startup incorporation checklist

#115

Post by ex3ndr » Wed, Jun 29, 2016, 9:52 PM UTC

hberg wrote: post #57

ex3ndr wrote: post #14

How we can open checking account in SVB? They rejected to open account for us saying that we are not tech vc-backed startup, but we are! Or any other possibilities?

FWIW, you can easily open a business checking account at any bank and they usually have better online services than SVB. Often you can ask your personal bank to waive the fees on a business account if you've been with them for a while.

We are not US-residence, i forgot to mention about this