RE: Stripe Atlas. I am agonizing over whether to incorporate my company as a LLC or a C-Corp. Here's why.
RE: Stripe Atlas. I am agonizing over whether to incorporate my company as a LLC or a C-Corp. Here's why.
Ideally I want to incorporate as LLC. The issue is that I have an employee and an advisor that want small amount of equity, and I cannot issue shares to them as an LLC (without putting them on my incorporation docs, which I don't want to do). So I have two questions:
A) Starting out as an LLC, what is the pathway down the line for giving others equity? Do I have to re-incorporate as a C-Corp?
B) Is there any reason why I definitely want to incorporate as a C-Corp other than that? Thanks!
Nathan Barry just wrote about shares in an LLC https://nathanbarry.com/equity/
A C-Corp is more overhead, expense, and difficulty in every way.
37 Signals took funding (from Jeff Bezos) as an LLC. It's not impossible by any means. It's more a matter of most US investors not wanting to deal with anything but a Delaware C Corp.
I think you'll need c corp for equity. LLC is better for individuals or partners, not really employees... but that's just me
Bump
Not sure if this helps, but if you're starting a company looking to raise funding, you'll need to switch to a C-Corp later down the road anyways.