Legal, Tax, and Accounting March 8, 2020

How do you know when to buy an LLC etc?

Perry Raskin @perryraskin

I'm a classic indie maker wannabe that has a bunch of ideas and I really want to finally start on something. The main thing that keeps me from starting, I think, is the idea that I will start sharing a lot of stuff in public (which is what I want to do), and something might become an issue when it comes to owning the name of my product.

How does one know when or if they need to buy an LLC or do anything regarding legal rights to a business name?

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    You're conflating business name + product name. Business name just needs to be distinct within realm of business. If domain name matching product available buy it.

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    One thing to keep in mind is if you plan on or even consider taking VC investment at any point, the investors are going to want you to have a C-Corp (rather than LLC). It's much more difficult to invest in an LLC for the VCs.
    If you want to stay bootstrapped, I think LLC is better.

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    LLC is simple and inexpensive. $100 bucks the create one in Idaho. Also, might need to get an EIN if you wish to open a bank account for your LLC.

    Trademarks are more difficult to get. Filing is a little over $200 if I recall correctly. I wouldn't worry so much over the trademark honestly. An LLC to protect your personal finances from your business is definitely worth the cost.

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      But should I bother getting one if all I’m doing is validating my idea? My main concern here is that while validating my idea, someone may snatch the name or something. Is that something worth worrying about?

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        I'd say at this juncture, validating the idea has more return than securing a name.

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    Prefacing this with: I'm not a lawyer.

    Setting up an LLC should be pretty trivial - plenty of resources if you google for them. You can also do it for almost no money.

    Legal rights to a business name get a little more complicated. Again, lots of resources if you search for them online, but there are a few main things to consider:

    • Can you get a domain name that you're happy with?
    • Can you register the trademark with the USPTO?
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