S-Corp, C-Corp, or LLC for Startups? 🤔
Registering your business properly and being on the safe side in terms of legal matters is integral for new companies. And selecting the best-fit legal entity type is a tough call to make at the early stages of startup company formation. After all, this decision can influence lots of fundamental matters, including:
🔶 potential for attracting outside funding
🔶 rules for handling taxation
🔶 documentation and management formalities
🔶 stakeholder policies
🔶 ownership restrictions
🔶 liability protection
🔶 and lots of other vitals
Startup founders in the USA commonly choose between such business structures as Limited Liability Companies (LLCs), C-corporations, and S-corporations. Which one is better truly depends on your business needs, funding plans, and overall strategy.
Here’s a detailed guide that dives into the peculiarities of each of the types, when to consider choosing them, and how to incorporate a startup in the USA (specific steps) 👇
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Completely agree with the author's perspective on the importance of choosing the right business structure for startups. It's a complex yet crucial decision that impacts many aspects of the business.
Open to discussion. Someone told me that currently most of startups are making a LLC. I don't know if it's better or not.
My 02 worth that I'm sure will make some folks unhappy. Make 1-10 sales as a sole proprietor before you make the S-Corp, C-Corp, or LLC decision. That way you've proven the business model in some small sense, and the $ from those early sales can fund the legal formation. (this does not work for some business categories, pharma, etc)