How I Incorporated My Startup
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How I Incorporated My Startup
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Re: How I Incorporated My Startup
#2Thanks very much for this. I'm new to the country and have been looking for this kind of info. Much cheaper than I expected.
Re: How I Incorporated My Startup
#3Good post, getting incorporated (or making an LLC) really IS that easy, and I've not seen anyone outline the process so succinctly before.
One comment: You don't NEED to incorporate in delaware, unless you have specific liability reasons for doing so. Incorporating in your own state is usually cheaper and easier, so unless you have specific protection you want that only a delaware corporation corporation can provide (or nevada, they're also good), don't bother and just use your home state.
Also don't forget that there are upkeep costs for a corporation or LLC, certain paperwork (usually annual) that you have to keep up with and file each year to maintain the corporation.
Re: How I Incorporated My Startup
#4Good basic outline. It's too bad the difficult part of incorporating is the upkeep of accounting, taxes and everything else that goes with it. I too spent a couple hundred to incorporate, but thousands for the CPA, bookeeper, lawyers, etc.. to keep you in check. My startup is up to 11 employees though.
If it's just you or you and a friend starting something basic, a local business attorney should be able to keep you in check for $100-$150 an hour a few times a year. Early on I actually found some local contests for startups and won $4,000 in attorneys fees once, and once I got bigger applied for another one and received $10,000 in fee credit.
Look around, there are lots of people willing to help young startups. Offer to use an attorney on deferred payment status until you close at least a $1MM series A or have $1MM in revenue. From my personal experience many will do this for the chance at having you as a longtime client when you make it big.
Good luck!
Re: How I Incorporated My Startup
#5This a great, succinct guide - glad to see it.
One very important step five to add: check with your state's Secretary of State office to see if there are any additional steps that must be taken. Many states require foreign-registered LLCs and corporations to submit an "application for authority to transact" or otherwise register with them.
Depending on where you're located, a local business registration fee or license may be required as well.
It's also important to apply for an EIN number, which is generally required before opening a bank account in the business' name, and for tax purposes: https://sa2.www4.irs.gov/modiein/individual/index.jsp
There may be other steps that I'm missing, but as with any guide to navigating these waters, always ask for help in your particular situation, and don't be afraid to (indeed, please do!) consult a lawyer.
Re: How I Incorporated My Startup
#6Good basic outline. It's too bad the difficult part of incorporating is the upkeep of accounting, taxes and everything else that goes with it. I too spent a couple hundred to incorporate, but thousands for the CPA, bookeeper, lawyers, etc.. to keep you in check. My startup is up to 11 employees though. If it's just you or you and a friend starting something basic, a local business attorney should be able to keep you…
Right, and it's way easier/cheaper to keep an LLC than a corp with shareholders.
Re: How I Incorporated My Startup
#7Is it possible (or legal) for a set of foreign people (outside the country, no citizens) to create a delaware company? Would that work at all, what with banking and all? Anyone know?
Re: How I Incorporated My Startup
#8Posts like this is why I read HN. I believe the synergy in this start-up community is amazing. :)
Re: How I Incorporated My Startup
#9Nice post. A lot of people get this wrong, but the right word where you used 'stocks' is 'shares'. You own shares in a company, not stocks—when you hear people talk about "their stocks" they're talking about their shareholdings in multiple companies.
Re: How I Incorporated My Startup
#10Nice post. A lot of people get this wrong, but the right word where you used 'stocks' is 'shares'. You own shares in a company, not stocks—when you hear people talk about "their stocks" they're talking about their shareholdings in multiple companies.
Interesting, didn't know this! I edited the original post, thanks.