4 ms·

Reasons to incorporate include 1. limiting your liability and 2. establishing a formal agreement between you and your friends. First, if someone were to sue yo

Reasons to incorporate include 1. limiting your liability and 2. establishing a formal agreement between you and your friends. First, if someone were to sue your company and you weren't incorporated (LLC, C-Corp, etc.) then they would be suing YOU personally and you would be liable. If you do incorporate, someone suing you is actually suing the company - the company is liable and only in specific cases can you be personally liable. The second part is that incorporating typically puts out the terms of your arrangement with your friends - right now, if the hosting is in one person's name, they could essentially be the sole owner of the company (unless you had a lawsuit over IP, or something like that). Incorporating makes clear that the company owns the site and IP, and decides what percentage each party owns of the company.

xunx 15y ago
Thanks, so I guess we have to incorporate then, in case someone wants to sue us. But then our main concern is our visa status. I am on a F1 visa and my friend is on a H1B visa. We are the main cofounders. I saw some answers by other people who say that if we incorporate, we can have shares and sit on the board but we cannot work for our company because our visa won't allow us to (While I can use opt, but my cofounder who is on H1B and who is the tech person can't). Their suggestion is to find a US cofounder, but finding a technical cofounder is hard for us...
- maxbrown 15y ago
  If you just need someone to be the "face" of the company, you could consider finding a business or legal person to come on board just for incorporating and managing. Offer them some small-ish equity in return.
- a3camero 15y ago
  What would the lawsuit be about? Is there a way that you would be sued as the actors "behind" the corporation (http://en.wikipedia.org/wiki/Piercing_the_corporate_veil http://en.wikipedia.org/wiki/Piercing_the_corporate_veil)? Will you be a director of the corporation as well? It's very common for people to sue directors of corporations (see D&O insurance for details [http://www.insurepro.net/html/directors_and_officers_explained.asp] http://www.insurepro.net/html/directors_and_officers_explain...). The liability might be less limited than you think. Liability for debt? Probably anyone that would lend money to you would want personal guarantees. You may want to consult a lawyer if this could potentially be messy. Lawyers are expensive you say! See my comment below about law schools and clinics.

xunx 15y ago

Thanks, so I guess we have to incorporate then, in case someone wants to sue us. But then our main concern is our visa status. I am on a F1 visa and my friend is on a H1B visa. We are the main cofounders. I saw some answers by other people who say that if we incorporate, we can have shares and sit on the board but we cannot work for our company because our visa won't allow us to (While I can use opt, but my cofounder who is on H1B and who is the tech person can't). Their suggestion is to find a US cofounder, but finding a technical cofounder is hard for us...

maxbrown 15y ago
If you just need someone to be the "face" of the company, you could consider finding a business or legal person to come on board just for incorporating and managing. Offer them some small-ish equity in return.
a3camero 15y ago
What would the lawsuit be about? Is there a way that you would be sued as the actors "behind" the corporation (http://en.wikipedia.org/wiki/Piercing_the_corporate_veil http://en.wikipedia.org/wiki/Piercing_the_corporate_veil)? Will you be a director of the corporation as well? It's very common for people to sue directors of corporations (see D&O insurance for details [http://www.insurepro.net/html/directors_and_officers_explained.asp] http://www.insurepro.net/html/directors_and_officers_explain...). The liability might be less limited than you think. Liability for debt? Probably anyone that would lend money to you would want personal guarantees. You may want to consult a lawyer if this could potentially be messy. Lawyers are expensive you say! See my comment below about law schools and clinics.