4 ms·

There is a much longer conversation about your eventual goals for the company and plans for monetization and hiring. However, I would keep it simple and form an

There is a much longer conversation about your eventual goals for the company and plans for monetization and hiring. However, I would keep it simple and form an LLC. LLCs are relatively easy. You might be able to get everything done (or at least the forms submitted) by this afternoon if you start right now. Forming a C-corp is much more involved and comes with a lot of hidden extra hurdles that aren't insurmountable, but they can be an extra drag on your time if you already hate dealing with the paperwork and other details. I'd look into a C-corp before you plan on bringing in other co-founders or investors or anything complicated like that, but in my experience they're not necessary at this stage. And yes, you do want to form some sort of business entity for this venture. The chances of encountering legal trouble are relatively small, but if it does happen then you'll wish you had taken a few hours to at least form an LLC to protect yourself.

ghostmatt 5y ago
Thanks for your reply I really appreciate the advice. I think I will eventually need to be a C-corp. Is it a real hurdle to transfer an LLC to a C-corp?
- trcarney 5y ago
  In most states, I think it is pretty straight forward and can be done with a service like legal zoom. As for the type of business entity, this is the best article have found that explains the different types and when you would need them. https://www.toptal.com/finance/interim-cfos/c-corp-vs-s-corp https://www.toptal.com/finance/interim-cfos/c-corp-vs-s-corp Hope this help
- fredstarr 5y ago
  Illinois resident and business owner here. Our company is an LLC (set up on the Secretary of State website for $150) but we elected to be taxed as an S-Corporation by filling out and submitting the FREE Form 2553 obtained from the IRS website. We had this set up 8 years ago and have not had any problems/issues since. I'm sure you can do the same for a C-Corp. The link to the IRS Tax-Election section is https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations https://www.irs.gov/businesses/small-businesses-self-employe.... Let me know if you have any additional questions. Good luck.

ghostmatt 5y ago

Thanks for your reply I really appreciate the advice. I think I will eventually need to be a C-corp. Is it a real hurdle to transfer an LLC to a C-corp?

trcarney 5y ago
In most states, I think it is pretty straight forward and can be done with a service like legal zoom. As for the type of business entity, this is the best article have found that explains the different types and when you would need them. https://www.toptal.com/finance/interim-cfos/c-corp-vs-s-corp https://www.toptal.com/finance/interim-cfos/c-corp-vs-s-corp Hope this help
fredstarr 5y ago
Illinois resident and business owner here. Our company is an LLC (set up on the Secretary of State website for $150) but we elected to be taxed as an S-Corporation by filling out and submitting the FREE Form 2553 obtained from the IRS website. We had this set up 8 years ago and have not had any problems/issues since. I'm sure you can do the same for a C-Corp. The link to the IRS Tax-Election section is https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations https://www.irs.gov/businesses/small-businesses-self-employe.... Let me know if you have any additional questions. Good luck.