Re:Ask HN: C-Corp or LLC for idea stage startup?
by Digory on Monday December 19, 2022 @06:44PM
(#34059508)
IANYL, but LLC with an S-Corp election is the choice for the overwhelming majority of "two guys with a project" businesses -- though that can depend on the state.
YMMV, especially in California & New York, but in most of the country, it's a few hundred bucks to file and get yourself an operating agreement that isn't fill-in-the-blank. A good small business lawyer in your state will have something.
Understand, the LLC protects you against the mistakes and actions of the other guy, and a predictable set of rules if it falls apart. You still need insurance to protect you against you. But that's what you're looking for here.
I tend to be in the "wait for funding to convert to C-Corp" camp. There are some reasons to start there, but they're relatively rare.
YMMV, especially in California & New York, but in most of the country, it's a few hundred bucks to file and get yourself an operating agreement that isn't fill-in-the-blank. A good small business lawyer in your state will have something.
Understand, the LLC protects you against the mistakes and actions of the other guy, and a predictable set of rules if it falls apart. You still need insurance to protect you against you. But that's what you're looking for here.
I tend to be in the "wait for funding to convert to C-Corp" camp. There are some reasons to start there, but they're relatively rare.