5 ms·
I meet a lot of first-time entrepreneurs who think that a company is some sort of magic thing that will give them credibility. In reality, it usually just costs
by dlevine 16y ago
I meet a lot of first-time entrepreneurs who think that a company is some sort of magic thing that will give them credibility. In reality, it usually just costs you money in many cases.
I've learned that the most important thing is building a product, and that the actual incorporation can be done later. You technically don't even need a real corporation until much later in the process than you would expect (I have friends who run successful businesses as sole proprietorships).
As for what you can do now, IANAL, but having been in a similar situation myself (startup died and I was left with a C-Corp), you have a bunch of options. You can dissolve it right now, or hold on to it for a while to see if something else takes off. There's a certain minimum amount that having a company will cost you in taxes and fees (about a grand a year if you're in CA, and likely less if you're elsewhere). For a Delaware Corp that's actually elsewhere, you need to pay for a registered agent, which is like $200 a year. You need to file some report and pay some tax to Delaware as well, but the time/money involved with that requirement is pretty minimal.
If you want to dissolve it yourself, it isn't that hard. There are a bunch of forms you need to fill out, but it isn't all that difficult to do so (you can find them online). You could just let it die (if you don't pay the taxes/fees, it will eventually get shut down).
- groby_b 16y agoHaving a company in CA is actually not that expensive - just formed a partnership and paid about $100. Having a C-Corp/S-Corp/LLC is pretty expensive, though.
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- krisrak 16y agoThats right, you should always start working on it as a side-project and launch it, see if it gets any user base or if you can make money by monetizing. Forming a company can be done when you have VC's interested or you are making a lot of money. Until then you can just collect the money from sales or monetization and file it as 1099-MISC tax return. No company is required initially especially for web based startup
- dazzawazza 16y agoI agree but I'd just like to add the caveat that a company offers you some legal protection which depending on your market you may need or may be desirable. Of course being a director/owner also brings it's own responsibilities which you must respect.
- codeslush 16y agoIAANAL (I also am not a lawyer) but I don't think you can just "let it die" --> in fact, I think that will get you in a lot of trouble. You either need to keep it alive, or you need to kill it. A corporation is its own entity and you can't just ignore it because it will come back and haunt you. So please...don't just ignore it - kill it properly.
- x0ner 16y ago"You technically don't even need a real corporation until much later in the process than you would expect (I have friends who run successful businesses as sole proprietorships)." While this is true, it may be worth having an LLC or something more than a sole proprietorship given how people love to sue for any reason they can find.