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The author is the founder of Buffer, which has both a product, and cash flow, and in fact had both quite early on. I also suspect that many of their customers a
by notJim 14y ago
The author is the founder of Buffer, which has both a product, and cash flow, and in fact had both quite early on. I also suspect that many of their customers are businesses (but I'm not sure.) So his experience would seem contradict what you're saying.
Why do you think it's necessary to incorporate early if you're taking money for a service/product?
- tptacek 14y agoIt's painful to do corp-corp business without a corporation. Many large corporations will, when dealing with sole proprietorships, do crazy things like withhold taxes. Some companies may refuse to work with you altogether and instead demand that you work through a subcontracting arrangement with an existing vendor. Other companies will require you to maintain different liability insurance coverage, or have insurance requirements that are not easily available to new sole proprietorships. (I've seen friends deal with this nonsense even after they got LLCs; I've also seen this nonsense resolved with LLCs). Since early '05, I've been a principal at a business that bills large contracts year-round to companies of all sizes --- more on the 1000+ employees level, but lots of startups and small tech companies too. The idea that incorporation helps deal with corp-corp business is not a myth, and no appeal to "that guy's company must be doing business with corporations and he deferred incorporation" changes that.