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6 Comments

LLC or Delaware C-Corp...Agency but I want to be a product

At the moment, I'm doing consulting work, where I get paid through 1099 for time-in-time-out or fixed prices for the work. I'm (of course) trying to think of ways to productize my work, and turn my manual consulting business into a software product that can scale.

Should I make an LLC for myself, or should I make a C-Corp, with the hopes that I'll have a scalable product that could get funding in the future?

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    Wait to do a C-Corp as long as possible. Just start with an LLC and when the time comes you can always move to a C-Corp. Like WorkWithDitto said, going from C-Corp to LLC is hard if even really an option.

    The only reason to role C-Corp from the beginning, you have an investor willing to give you money. They will expect a C-Corp.

    Cooly is fancy law-firm for startups they have a good article explaining it -- https://www.cooleygo.com/compare-business-entities-chart/

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    It also depends on whether you are a US citizen or not.

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      I am a US citizen. How does that make a difference?

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        I doesn't if you are but there's a lot to consider if you are not.

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    I'm not a tax professional, but everything I've been told leans toward establishing an LLC - I've been told that it's more flexible (possible to be taxed as an S corp) and you can always become a C corp later. I'm told that it's harder to go from a C corp to an LLC than from an LLC to a C corp, so by starting as an LLC, you preserve optionality.

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