4 ms·

Joel, good points but I would advise going with at least an LLC/LLP when more than one founder. Makes things more official and easier to do business (payment ga

Joel, good points but I would advise going with at least an LLC/LLP when more than one founder. Makes things more official and easier to do business (payment gateways, etc). Also, it takes around $100 and 5 minutes on an online form to set it up. Easy!

minouye 14y ago
Generally good advice but be advised fees and setup will vary state to state. In California, the process can take several months and you'll be on the hook for a minimum $800 franchise tax each year the LLC is in operation.
danshapiro 14y ago
Incorporating as an LLC makes it harder and more expensive to do properly later as a C-corp. I believe it can add >10k to the total costs vs. doing a C-corp from the start.
- HeyLaughingBoy 14y ago
  Yeah, but... If I get to the point of needing my LLC to become a C-corp, that $10k will be a drop in the ocean.
- tptacek 14y ago
  Living an extra mile away from your lawyer also makes it harder and more expensive to do business, because you'll pay extra for gasoline. The question is, "how much more expensive", and the answer W.R.T. plain-vanilla LLCs where the transition to C-Corporation is uncontested by all the members and all the members are still active is, "not very". I'm sure you can easily rack up more than $10k in conversion costs if you let things get complicated, but I'd like a cost breakdown or even just a citation to a source for the idea that LLCs add $10k to C-Corp costs in the common case.
- SwaroopH 14y ago
  My point is against doing nothing. Having incorporated recently, I firmly believe incorporation is the way to go. Although, my lawyer is friendly, gets thing done fast and charges very low.
burntwater 14y ago
And in NYC it can cost over $1,000 because of publication requirements. There are ways around it, but it took me some digging to find (and still costs several hundred).
- tptacek 14y ago
  We were a Delaware LLC headquartered in NYC and did not run into any $1000 publication requirement; we did the online Delaware thing, and because we're in a legal-heavy sector of the industry, we've had our stuff looked over pretty carefully since then.

minouye 14y ago

Generally good advice but be advised fees and setup will vary state to state. In California, the process can take several months and you'll be on the hook for a minimum $800 franchise tax each year the LLC is in operation.

danshapiro 14y ago

Incorporating as an LLC makes it harder and more expensive to do properly later as a C-corp. I believe it can add >10k to the total costs vs. doing a C-corp from the start.

HeyLaughingBoy 14y ago
Yeah, but... If I get to the point of needing my LLC to become a C-corp, that $10k will be a drop in the ocean.
tptacek 14y ago
Living an extra mile away from your lawyer also makes it harder and more expensive to do business, because you'll pay extra for gasoline. The question is, "how much more expensive", and the answer W.R.T. plain-vanilla LLCs where the transition to C-Corporation is uncontested by all the members and all the members are still active is, "not very". I'm sure you can easily rack up more than $10k in conversion costs if you let things get complicated, but I'd like a cost breakdown or even just a citation to a source for the idea that LLCs add $10k to C-Corp costs in the common case.
SwaroopH 14y ago
My point is against doing nothing. Having incorporated recently, I firmly believe incorporation is the way to go. Although, my lawyer is friendly, gets thing done fast and charges very low.

burntwater 14y ago

And in NYC it can cost over $1,000 because of publication requirements. There are ways around it, but it took me some digging to find (and still costs several hundred).

tptacek 14y ago
We were a Delaware LLC headquartered in NYC and did not run into any $1000 publication requirement; we did the online Delaware thing, and because we're in a legal-heavy sector of the industry, we've had our stuff looked over pretty carefully since then.