{"id":414291,"date":"2025-01-10T11:43:35","date_gmt":"2025-01-10T11:43:35","guid":{"rendered":"https:\/\/seedlegals.com\/?p=414291"},"modified":"2025-01-10T11:43:35","modified_gmt":"2025-01-10T11:43:35","slug":"should-i-incorporate-my-startup-as-an-llc-an-s-corp-or-a-c-corp","status":"publish","type":"post","link":"https:\/\/seedlegals.com\/us\/resources\/should-i-incorporate-my-startup-as-an-llc-an-s-corp-or-a-c-corp\/","title":{"rendered":"Should I incorporate my startup as an LLC, an S corp or a C corp?"},"content":{"rendered":"","protected":false},"excerpt":{"rendered":"

Learn how to choose the ideal business structure for your startup. Compare LLCs, S corps and C corps to discover the best fit for your entrepreneurial journey.<\/p>\n","protected":false},"author":177,"featured_media":414300,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[141],"tags":[],"event_tags":[],"class_list":["post-414291","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized-us"],"acf":{"blog_layout":"v2","v2":{"hero":{"image_background_color":"#E7F1FF","image_fit":"img--cover"},"adverts":[{"type":"selector","selected_advert":{"ID":412070,"post_author":"77","post_date":"2024-11-11 09:48:00","post_date_gmt":"2024-11-11 09:48:00","post_content":"","post_title":"US - Talk to the team","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-newsletter","to_ping":"","pinged":"","post_modified":"2024-11-13 16:19:20","post_modified_gmt":"2024-11-13 16:19:20","post_content_filtered":"","post_parent":0,"guid":"https:\/\/seedlegals.com\/?post_type=blog_advert&p=412070","menu_order":0,"post_type":"blog_advert","post_mime_type":"","comment_count":"0","filter":"raw"},"custom_advert":{"advert_tracking_id":"","layout":"default","image":{"image":false,"link":""},"text":{"heading":"","content":"","button":null,"background_color":"#EEF4FF","text_color":"#000646"},"form":{"form":{"type":"none","hubspot_form":{"layout":"newsletter","hide_founderinvestor_toggle":false,"default_community":"founder","custom_form_id":"","gdpr_disclaimer":"By subscribing, you agree to receive information from SeedLegals. You can unsubscribe anytime. View our privacy policy<\/a>"},"custom":{"embed":""},"gtm_form_type":false,"gtm_form_location":false}},"cta_and_testimonials":{"heading":"","button":null,"bullet_points":false,"testimonials":false}}}],"related_sidebar_posts":false},"show_author_card":false,"revision_date":"","hero_image":414300,"has_custom_post_authors":true,"custom_post_authors":{"authors":[{"author":{"ID":177,"user_firstname":"David","user_lastname":"Lehrer","nickname":"David","user_nicename":"david","display_name":"David Lehrer","user_email":"david123@seedlegals.com","user_url":"http:\/\/www.cysana.co\/","user_registered":"2024-11-25 14:25:26","user_description":"","user_avatar":""},"role":"CEO & Founder"}]},"is_expert_reviewed":true,"post_content_width":"default","post_content":[{"acf_fc_layout":"text","text":"

Besides obtaining financing to get your new business going, one of the other important things that you need to get right is how you\u2019re going to incorporate it.<\/p>\n

There are three options. An LLC, S corp or a C corp. But before you go ahead, you need to ensure that you choose the one that best serves your needs both now and in the future. Yes, you can make a switch at a later stage, but that comes with a lot of hassles.<\/p>\n

In this article we will unpack the differences between all three options so that you can make an informed decision.<\/p>\n

Before we dive into the differences, here’s a straightforward table outlining the three business structures and their meanings.<\/p>\n"},{"acf_fc_layout":"image","image":{"ID":414584,"id":414584,"title":"Llc Vs S Corp Vs C Corp","filename":"LLC-vs-S-Corp-vs-C-Corp.png","filesize":69561,"url":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp.png","link":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp.png","alt":"Llc Vs S Corp Vs C Corp","author":"176","description":"Llc Vs S Corp Vs C Corp","caption":"Llc Vs S Corp Vs C Corp","name":"llc-vs-s-corp-vs-c-corp","status":"inherit","uploaded_to":414291,"date":"2025-01-08 09:48:19","modified":"2025-01-08 09:48:19","menu_order":0,"mime_type":"image\/png","type":"image","subtype":"png","icon":"https:\/\/seedlegals.com\/wp-includes\/images\/media\/default.png","width":1200,"height":1149,"sizes":{"thumbnail":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-150x150.png","thumbnail-width":150,"thumbnail-height":150,"medium":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-300x287.png","medium-width":300,"medium-height":287,"medium_large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp.png","medium_large-width":768,"medium_large-height":735,"large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-1024x980.png","large-width":1024,"large-height":980,"_themosis_media":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-100x100.png","_themosis_media-width":100,"_themosis_media-height":100,"1536x1536":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp.png","1536x1536-width":1200,"1536x1536-height":1149,"2048x2048":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp.png","2048x2048-width":1200,"2048x2048-height":1149,"themosis":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-200x150.png","themosis-width":200,"themosis-height":150,"tog-small":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-300x287.png","tog-small-width":300,"tog-small-height":287,"tog-medium":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-600x575.png","tog-medium-width":600,"tog-medium-height":575,"tog-large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp-1000x958.png","tog-large-width":1000,"tog-large-height":958,"tog-huge":"https:\/\/seedlegals.com\/wp-content\/uploads\/2025\/01\/LLC-vs-S-Corp-vs-C-Corp.png","tog-huge-width":1200,"tog-huge-height":1149}},"caption":"","width":"100","alignment":"left"},{"acf_fc_layout":"text","text":"

What is a Limited Liability Company?<\/strong><\/h2>\n

If you want to apply for government grants, subsidies, or business loans, and participate in various small business or startup programs in your area, an LLC makes sense.<\/p>\n

You may be satisfied with running your venture as an LLC for years, or indeed forever, but depending on your situation and goals, you may also find your business to be growing out of it, meaning that you need to re-incorporate.<\/p>\n"},{"acf_fc_layout":"content_highlight","highlight_type":"tip","background_colour":"blue","show_icon":true,"content":"In 2023 LLCs in the US accounted for the majority (70.6%) of incorporations. This was the 19th consecutive year that LLCs dominated the number of partnership returns filed.
\r\n","link":null},{"acf_fc_layout":"text","text":"

What are the positives of a Limited Liability Company?<\/strong><\/h2>\n

LLCs allow you to do business as a company, to invoice customers, open a corporate bank account, hire contractors or payroll employees, apply for business loans or grants, and pay favorable corporate taxes on profits. As a general rule of thumb, they are better suited for small businesses that are generating positive cash flow and distributing profits out to their owners every year.<\/p>\n

One of the main reasons for their popularity is that they offer limited liability protection to business owners. A sole proprietor is personally responsible for the company\u2019s debts and legal claims, putting their personal assets at risk. But by forming an LLC, the business owner can protect their personal assets from business liabilities.<\/p>\n"},{"acf_fc_layout":"expert_highlight","expert_highlight":{"":null,"image":{"ID":412672,"id":412672,"title":"Davidlehrer A5 (60)","filename":"DavidLehrer-A5-60.jpg","filesize":52921,"url":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","link":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","alt":"Davidlehrer A5 (60)","author":"176","description":"Davidlehrer A5 (60)","caption":"Davidlehrer A5 (60)","name":"davidlehrer-a5-60","status":"inherit","uploaded_to":414291,"date":"2024-11-25 14:15:14","modified":"2024-12-30 15:52:27","menu_order":0,"mime_type":"image\/jpeg","type":"image","subtype":"jpeg","icon":"https:\/\/seedlegals.com\/wp-includes\/images\/media\/default.png","width":350,"height":233,"sizes":{"thumbnail":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-150x150.jpg","thumbnail-width":150,"thumbnail-height":150,"medium":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-300x200.jpg","medium-width":300,"medium-height":200,"medium_large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","medium_large-width":350,"medium_large-height":233,"large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","large-width":350,"large-height":233,"_themosis_media":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-100x100.jpg","_themosis_media-width":100,"_themosis_media-height":100,"1536x1536":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","1536x1536-width":350,"1536x1536-height":233,"2048x2048":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","2048x2048-width":350,"2048x2048-height":233,"themosis":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-200x150.jpg","themosis-width":200,"themosis-height":150,"tog-small":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-300x200.jpg","tog-small-width":300,"tog-small-height":200,"tog-medium":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","tog-medium-width":350,"tog-medium-height":233,"tog-large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","tog-large-width":350,"tog-large-height":233,"tog-huge":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","tog-huge-width":350,"tog-huge-height":233}},"quote":"

\u201cI chose an LLC when I launched my own startup. It\u2019s relatively painless to organize, making it possible to act as a business, hire employees, and pay business taxes.\u201d<\/p>\n","name":{"title":"David Lehrer","url":"https:\/\/www.linkedin.com\/in\/david-lehrer-2b16181a\/","target":"_blank"},"role":"CEO","company":{"title":"Conatix","url":"https:\/\/www.cysana.co\/","target":"_blank"},"linkedin":"","facebook":"","instagram":"","twitter":"","hide_image":false}},{"acf_fc_layout":"text","text":"

Other benefits include favorable and flexible tax policies as profits are only taxed once at the owner level, a simplified corporate structure with fewer management layers, and, importantly, enhanced business credibility.<\/p>\n

Something worth noting is that when incorporating as an LLC, the best place to do that is likely to be your home state or where your company is actually physically based. The advantages of some states known for stable and reliable bodies of corporate law or low or no taxation rates for corporate taxes may only apply to corporations, not to LLCs.<\/p>\n"},{"acf_fc_layout":"text","text":"

What are the negatives of a Limited Liability Company?<\/h2>\n

It may be difficult to raise outside investment capital as VCs are usually reluctant to hold equity in an entity that is a pass-through for tax purposes. Additionally, in some non-US jurisdictions (i.e., the UK), LLCs may be subject to double-taxation like corporations.<\/p>\n

There are workarounds for everything, of course. You can have members who are granted rights to split profits with you, which can help you attract capital and employees to your business even if membership is not tradeable in the same way that shares in a corporation are.<\/p>\n

If you are seeking larger rounds of institutional capital, such as from venture capital or private equity funds, such funds will generally insist that you incorporate your venture as a C corporation.<\/p>\n"},{"acf_fc_layout":"text","text":"

What is an S corp?<\/strong><\/h2>\n

An S corp is a type of corporation that elects to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes.<\/p>\n

To incorporate as an S corp there are a few boxes you must tick. You must be a domestic corporation (or an LLC electing to be taxed as a corporation) with no more than 100 shareholders who are all US citizens and they must be individuals, certain trusts, or estates. And, you must have only one class of stock (no preferred stock).<\/p>\n

Important to note, though, is that not all states allow S corps. Massachusetts, New York, Michigan, California and New Jersey may all tax S corps double above a certain dollar threshold, or for all taxes at the state level.<\/p>\n"},{"acf_fc_layout":"text","text":"

What are the positives of an S corp?<\/strong><\/h2>\n

An S corp allows the same pass-through taxation that an LLC does, potentially saving you tax dollars if your company is profitable \u2013 which may not be a problem that an early-stage startup has.<\/p>\n

Rather than being taxed first as a company and then on your income or dividends, taxation can pass through to the owner\u2019s personal tax return. Due to the 2017 Tax Cuts and Jobs Act<\/a>, S corp shareholders can deduct up to 20% of their Qualified Business Income<\/a> (QBI), potentially lowering their individual tax burden by 20-25%.<\/p>\n

But this may not be important if your company is not earning enough income to pay significant tax. An S corp can only issue common stock, and a change of majority ownership could potentially end its eligibility for S corp status.<\/p>\n

In addition to providing tax savings, the S corp structure safeguards the owners’ personal assets from lawsuits or debt collections targeting the business.<\/p>\n"},{"acf_fc_layout":"text","text":"

What are the negatives of an S corp?<\/strong><\/h2>\n

As mentioned above, although an S corp is a popular business structure due to its tax advantages and liability protection, these advantages are balanced by eligibility constraints, compliance requirements, and limitations in raising capital and flexibility. So, business owners need to carefully consider whether these limitations align with their business goals and future growth plans.<\/p>\n

Passive income limitations:<\/strong> If an S corp’s passive income (including rents, royalties, dividends, or interest) exceeds 25% of its gross receipts for three consecutive years, it risks losing its tax status.<\/p>\n

Difficulty in raising capital:<\/strong> Since S corps are limited to issuing only one class of stock and have restrictions on the number and types of shareholders, raising capital from investors is more difficult compared to C corps, which can issue various types of stock and attract a wider range of investors.<\/p>\n

Transfer restrictions:<\/strong> Transferring ownership in an S corp can be more complicated than in other business structures because of the strict eligibility requirements for shareholders.<\/p>\n"},{"acf_fc_layout":"text","text":"

What is a C corp?<\/strong><\/h2>\n

A C corp, named for its classification under subchapter \u201cC\u201d of the IRS code<\/a>, is a distinct legal entity owned by shareholders and designed for unlimited growth. Many large businesses and publicly traded companies opt for this structure because it allows for expansive growth through stock sales, making it attractive to investors and well-suited for large, retail-oriented enterprises.<\/p>\n

Obviously all founders want to grow their companies, so important to note is that they offer unlimited growth potential as you can issue an unlimited number of shares, making it easier to raise capital through the sale of stock.<\/p>\n"},{"acf_fc_layout":"text","text":"

What are the positives of a C corp?<\/strong><\/h2>\n

C corps allow you to issue an unlimited number of shares and multiple classes of shares, such as common and preferred stock, to an unlimited number of shareholders who don\u2019t need to be citizens.<\/p>\n

It’s more straightforward than the pass-through taxation of LLCs or S corps, as in a C corp the company pays corporate tax at the corporate level, rather than passing the tax burden through to the tax filings of its individual members.<\/p>\n

C corps are also the preferred form of venture capital funds, so if you are seeking to raise a financing round from VCs, you may want to prepare for that by making the transition.<\/p>\n

Venture capitalists typically prefer C corps over LLCs because of the way they\u2019re taxed. An investor in an LLC could be taxed even if they don\u2019t receive any distributions from the company \u2013 and VCs don\u2019t like that! With C corps, investors are only taxed if they sell their stock or receive distributions from the company (like a dividend) \u2013 that\u2019s why VCs prefer them.<\/p>\n

Also, investors \u2013 especially VCs \u2013 will generally only want to invest in Delaware C corps. That\u2019s because the laws in Delaware are very business-friendly and investors are most familiar with them.<\/p>\n"},{"acf_fc_layout":"text","text":"

How to incorporate your company<\/strong><\/h2>\n

Incorporating as an LLC<\/strong><\/h3>\n

To organize your company as an LLC, create a business name that includes LLC at the end. You may need to appoint a registered agent if you don\u2019t have an address in the state you are incorporating at which the company can be served process. You will then want to file your LLC\u2019s articles of association with the state corporation commission, state secretary, or other appropriate office in your state of choice. No matter which state you choose, you will need to register for an Employer Identification Number, also called a TIN, with the IRS for filing taxes. You can apply for an EIN<\/a> online through the IRS website.<\/p>\n

Incorporating as an S corp or C corp<\/strong><\/h3>\n

To incorporate as an S corp or C corp, in addition to registering the company name, address, owners and officers at the state level, you must file the correct tax forms with the IRS. If your company meets the S corp requirements of issuing only common stock to fewer than 100 shareholders who are not themselves corporations and all of whom are US-based, then you can file form 2553<\/a>, which is due to the IRS no later than 2 months and 15 days after the start of the tax year. Obviously any change of corporate form, such as conversion from an LLC to an S corp, requires you to notify the existing members\/partners\/stockholders of the change.<\/p>\n

If you are transitioning from an S corp to a C corp, you must petition the IRS to revoke your company\u2019s former S corp status. If your company meets all requirements of a C corp, then you can file IRS form 1120<\/a> to request that status.<\/p>\n"},{"acf_fc_layout":"content_highlight","highlight_type":"link","background_colour":"purple","show_icon":true,"content":"Incorporated as an LLC and looking to fundraise? Convert your LLC into a Delaware C corp<\/b>
\r\n
\r\nMost investors will only put money into Delaware C corps. So if you start out as an LLC and later decide to raise capital, chances are you'll need to convert your company.
\r\n
\r\nThat used to mean $$$ legal fees but we've created the world\u2019s first automated LLC to C corp conversion.
\r\n
\r\nEverything\u2019s handled online, in one place, with our support throughout. It\u2019s the only solution that takes you from LLC to investor-ready C corp, and gives you the full set of fundraising tools to grow from there.
\r\n
\r\nGet started now.<\/a>","link":""},{"acf_fc_layout":"text","text":"

Why incorporate in Delaware?<\/strong><\/h2>\n

When you incorporate an S corp or C corp, Delaware is known for its predictable, business-friendly legal system and lack of corporate taxes. Delaware offers investor-friendly laws, no state income tax, and strong IP protection, making it the top choice for 68% of Fortune 500 companies.<\/p>\n"},{"acf_fc_layout":"content_highlight","highlight_type":"tip","background_colour":"blue","show_icon":true,"content":"Why Delaware?<\/b>
\r\n
\r\n- Legal Liability Protection, Established Corporate Laws<\/a>
\r\n- Incorporation Capital of the World<\/a>
\r\n- 68% of Fortune 500 companies are registered in Delaware<\/a>
\r\n- No state income tax, no inheritance tax, no sales tax<\/a>
\r\n- Income generated from IP is tax free. No taxes at the state level<\/a>
\r\n- Companies like Google, Apple and Amazon are all registered in Delaware to benefit from IP profits<\/a>
\r\n- Globally Recognized and Reputable<\/a>
\r\n- Delaware Court of Chancery (judges, not juries) for IP rights and other corporate law disputes<\/a>
\r\n- Advanced and up-to-date case laws leading to decreased litigation<\/a>
\r\n
\r\nRead more about the pros and cons of incorporating in different states in our article: What\u2019s the best US state to incorporate in?<\/a>","link":null},{"acf_fc_layout":"text","text":"

Wyoming, Nevada, Texas, Florida, and South Dakota have also increased their popularity as incorporation venues with no corporate or state income taxes, or both.<\/p>\n

While there may be apparent tax breaks and attractive legal systems far from home, there can also be added costs to incorporating outside of the state you live or primarily do business in.<\/p>\n"},{"acf_fc_layout":"expert_highlight","expert_highlight":{"":null,"image":{"ID":412672,"id":412672,"title":"Davidlehrer A5 (60)","filename":"DavidLehrer-A5-60.jpg","filesize":52921,"url":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","link":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","alt":"Davidlehrer A5 (60)","author":"176","description":"Davidlehrer A5 (60)","caption":"Davidlehrer A5 (60)","name":"davidlehrer-a5-60","status":"inherit","uploaded_to":414291,"date":"2024-11-25 14:15:14","modified":"2024-12-30 15:52:27","menu_order":0,"mime_type":"image\/jpeg","type":"image","subtype":"jpeg","icon":"https:\/\/seedlegals.com\/wp-includes\/images\/media\/default.png","width":350,"height":233,"sizes":{"thumbnail":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-150x150.jpg","thumbnail-width":150,"thumbnail-height":150,"medium":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-300x200.jpg","medium-width":300,"medium-height":200,"medium_large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","medium_large-width":350,"medium_large-height":233,"large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","large-width":350,"large-height":233,"_themosis_media":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-100x100.jpg","_themosis_media-width":100,"_themosis_media-height":100,"1536x1536":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","1536x1536-width":350,"1536x1536-height":233,"2048x2048":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","2048x2048-width":350,"2048x2048-height":233,"themosis":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-200x150.jpg","themosis-width":200,"themosis-height":150,"tog-small":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60-300x200.jpg","tog-small-width":300,"tog-small-height":200,"tog-medium":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","tog-medium-width":350,"tog-medium-height":233,"tog-large":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","tog-large-width":350,"tog-large-height":233,"tog-huge":"https:\/\/seedlegals.com\/wp-content\/uploads\/2024\/11\/DavidLehrer-A5-60.jpg","tog-huge-width":350,"tog-huge-height":233}},"quote":"

When I formed my own startup, I started with an LLC in Virginia in the Washington DC area where I had been living. When I found an investor willing to invest in my company, I transformed the LLC directly into an S corp. This meant finding an expensive Virginia lawyer from a larger law firm that deals with startups in the state to write up all of the incorporation documents and also the investment agreements as corporate laws and therefore all of the agreements constituting each company specific to each state.<\/p>\n","name":{"title":"David Lehrer","url":"https:\/\/www.linkedin.com\/in\/david-lehrer-2b16181a\/","target":""},"role":"CEO","company":{"title":"Conatix","url":"https:\/\/www.cysana.co\/","target":"_blank"},"linkedin":"","facebook":"","instagram":"","twitter":"","hide_image":false}},{"acf_fc_layout":"text","text":"

When creating complex corporate structures, it\u2019s advisable to keep as much of that structure simple and consistent as possible. If a Delaware company has a New Jersey subsidiary, you may want that subsidiary to be wholly 100% owned by the top company to ensure that all investors invest only in the top company and not in any subsidiaries.<\/p>\n

As you look to launch your startup, whether you\u2019re incorporating as an LLC, S corp or C corp, SeedLegals is here to help. Our simple to use end-to-end platform takes care of the legal processes traditional law firms typically handle \u2013 saving you time and money.<\/p>\n

Got any questions? We\u2019ll get them answered<\/strong><\/h2>\n

Book a free call with our team<\/a> to find out how we can help with your fundraise.<\/p>\n

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 <\/p>\n"},{"acf_fc_layout":"form","layout":"custom","heading":"Get answers fast, for free","content":"Bring all your questions - we\u2019ve got the answers!\r\nWe\u2019ll match you with the right specialist.","custom":{"image":false,"button_text":"Get Started","form":{"type":"hubspot","hubspot_form":{"layout":"default","hide_founderinvestor_toggle":false,"default_community":"founder","custom_form_id":"21723609-6f1b-45c0-9691-77d462dc3bed","gdpr_disclaimer":"By subscribing, you agree to receive information from SeedLegals. You can unsubscribe anytime. View our privacy policy<\/a>"},"custom":{"embed":""},"gtm_form_type":"default","gtm_form_location":"default"}},"add_shadow":false}],"has_sources":false,"related_posts":false,"expert_reviewed":{"heading":"Expert reviewed","tooltip_message":"This article has been fact-checked by a SeedLegals subject matter expert.

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