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Startup Company Form: LLC or S-Corp? Which is easier and which is better?
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Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#2An LLC has less overhead, from what I understand, but maybe there are buyout/VC implications? What do most startups do these days?
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#3An LLC has less overhead, from what I understand, but maybe there are buyout/VC implications? What do most startups do these days?
We went for a California LLC after doing a few weeks of research. It is the easiest structure we could find with the least expense. We don't know what the future funding implications are for it though.
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#4An LLC has less overhead, from what I understand, but maybe there are buyout/VC implications? What do most startups do these days?
We went for a California LLC after doing a few weeks of research. It is the easiest structure we could find with the least expense. We don't know what the future funding implications are for it though.
I heard that a LLC can be converted to a Corp when you get funded. I'm not a lawyer, so I'm not 100% sure about it.
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#5if you take money from investors they will require you to be a C-Corp. If this path is in your plans, it is probably easiest to start off this way.
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#6Dharmesh Shah wrote about this recently: http://onstartups.com/home/tabid/3339/bid/1303/Startup-101-Should-You-Form-An-Inc-or-LLC.aspx
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#7Dharmesh Shah wrote about this recently: http://onstartups.com/home/tabid/3339/bid/1303/Startup-101-Should-You-Form-An-Inc-or-LLC.aspx
startupping.com has had some chatter about this in its forums as well. That site tends to have some good practical discussions like this, and other things as well. It's a nice complement to this one.
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#8if you take money from investors they will require you to be a C-Corp. If this path is in your plans, it is probably easiest to start off this way.
I went for a Delaware C-Corp. Costed me $300 to incorporate + 30 in annual fees, so far for the first year. This was a relatively large expense for me so let's hope it was worth it.
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#9Ordinarily a startup should be a C corp. It's cheaper to be an LLC, but if you plan to succeed, you may as well do things right from the start.
With an LLC profits don't get taxed twice like in a regular corporation. So it makes sense to be an LLC if you expect to have substantial profits, but don't expect to grant options, sell shares, or get bought. Consulting firms and law partnerships are often LLCs. YC is an LLC.
Re: Startup Company Form: LLC or S-Corp? Which is easier and which is better?
#10if you take money from investors they will require you to be a C-Corp. If this path is in your plans, it is probably easiest to start off this way.
I went for a Delaware C-Corp. Costed me $300 to incorporate + 30 in annual fees, so far for the first year. This was a relatively large expense for me so let's hope it was worth it.
You should be able to get your annual fees down below $300 - it should only be about 1/2 that