Re:On Incorporation - Hold Off Until You Have The Cash To Spare
by starkfist on Monday February 22, 2010 @08:02PM
(#1144264)
Doing a quickie LLC then fixing the quickie incorporation later (doing the merger transaction and dissolution of the quickie LLC) can often be more expensive than just waiting to do a C corporation the right way.
It would be interesting to learn these actual costs from a lawyer, or someone who has gone through this process. I've worked at 4 different startups that changed from an LLC to a C corp. I wasn't privy to those costs, but I don't remember anyone being too worried about them.
Re:On Incorporation - Hold Off Until You Have The Cash To Spare
by grellas on Monday February 22, 2010 @07:58PM
(#1144252)
And I would agree with your additional point as well. A quickie incorporation is fine if you are intending to start as a sole founder and anticipate remaining that way. If you plan to add a founding team and anticipate needing a more sophisticated set-up, then you should be more cautious about doing it right from the start (we often get "instacorps" brought in for such repair jobs and, yes, it is true, it can cost more to repair them than it would have to do it right in the first place).
Great pieces by the way (I don't want to come across as just a critic - my points really touch on your argument at the edges, I think).
Re:On Incorporation - Hold Off Until You Have The Cash To Spare
by roedog on Monday February 22, 2010 @09:55PM
(#1144461)
My lawyer gave me a LLC agreement that had C corp conversion language built in. He says it saved him the headaches he normally encountered when doing so. So, perhaps it's worth asking about when shopping around.
Doing a quickie LLC then fixing the quickie incorporation later (doing the merger transaction and dissolution of the quickie LLC) can often be more expensive than just waiting to do a C corporation the right way.