There was a good discussion around Icelandic Startups planning to establish a company structure in the US and which company
structure is most appropriate. I believe that it depends on the
investor group. I found a very interesting blog post that basically went into all the details that I wanted to go in this post... then I thought why am I trying to re-invent the wheel. Here is the
link to the post. The biggest items while forming
legal entities is related to ownership structure, how much effort you want to put into maintaing books and accounts and
tax planning.
LLC is the simplest, is best suited for a small ownership group, C-
Corp is the preferred route if you want to build a company have
stock option pool, many capital raises i.e Series A,B,C etc. C-Corp and
S-Corp have statutory legal and accounting
book keeping requirements and have more complicated (read more
taxes) tax structure. My own personal suggestion is to setup a LLC while you are building the business and when you are ready to issue
stock options, raise capital and or bring new investors on-board convert the LLC to a C-Corp.
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