What would make you use Stripe Atlas (to move your project, on paper, to the U.S.)?
Folks,
Our CTO and I have studied Stripe Atlas and would greatly like to use it. there are just a couple grey areas that Stripe could probably easily help with - and if they did, for startups like RiteKit, going with Atlas would be an easy decision.
Yes, we are ready and happy to pay far more per transaction than we do with Braintree when we switch to Stripe. I'd be happy to explain why, if anyone cares.
Startup heads generally are against knowledge-hoarding, and this is something lawyers tend to do. What I'm going to ask, I've asked in several forums, Facebook Groups, and of course, have asked Stripe directly. What I get in terms of a reply is a polite knowledge-hoard: "you get one free consultation with a lawyer when you pay for Stripe Atlas." Our stance is that Stripe should address common questions in https://stripe.com/atlas/guides.
I'm eager to learn what others who wish to move their startup/project to the U.S. would like to know before they flip the switch on Atlas. I'll start with my two main issues:
- SITUATION:
To be able to offer unemployment and government health insurance to our Czech employee, and because we initially started with more people in Prague than anywhere else, we made RiteKit an asset of a Czech s.r.o.** (non-public corporation). We would like to remove RiteKit, and it's assets, which has been paying Czech business tax for years, from the s.r.o. and form a new DEL-C corp. in the U.S.
QUESTION:
What is the easiest and least expensive way to remove a profitable, Czech tax-paying asset from under the umbrella of a Czech s.r.o. and move ownership of it's websites, apps, etc. to a new DEL-C corp?
While I would not expect country-specific information, I would like to appeal to Stripe to please provide a page in https://stripe.com/atlas/guides on the factors, costs to anticipate, pitfalls to avoid, etc. on the topic of:
- How to remove a startup from the umbrella of a foreign corporation and form a new one (with Stripe Atlas)
- SITUATION:
We need to know what we should expect to pay - after the first free year that is included with Atlas, for local agent fees.
QUESTION:
Exactly how will this be calculated, after the first free year? Just as, when a cloud-hosting company offer to match our current server capacity use for two years free, we immediately need to know, right, and then...? Or a credit card, even, when they tempt you with a first-year-free offer, the first thing you check, after APR, is, and then? So, please: give us a way to understand what we'll be paying for a local agent after that first free year.
**s.r.o.: Some key points of an s.r.o. include:
- Does not issue shares
- Minimum basic capital is Euro 6.500
- Corporate governance is simpler than a joint-stock company
- A Board of Directors is not required
- The statutory body is made up of one or more Executive Directors
@csallen If you can facilitate getting someone who's responsible for the proliferation of Stripe Atlas to get involved with this, I'd be grateful.
I wish that there was a better answer here than "For the full version, you're almost certainly going to want to consult a local lawyer.", but that's a true statement. We try to avoid providing partial answers in our guides where we, by necessity, can't provide full, actionable answers.
Among other things, you're going to want to think through:
What's the price for this transaction? Is that price defensible as being arms-length? Tax agencies are skittish about assets moving across jurisdictions arbitrarily and may want the transaction to conform to norms and/or be paperworked thoroughly.
Is the IP assignment appropriately paperworked over, such that the new business has everything it needs to operate and there are no future landmines for investment or exit?
Are there any consequences to user relationships as a result of the sale? Some jurisdictions might be interested in e.g. where data is warehoused after the sale.
Any consequences for employee relationships? Can you maintain e.g. unemployment and government health insurance from a non-locally docimiled company? Will it be operationally or legally required to have a local entity anyway to do that?
Plus everything that your accountants and lawyers recommend. Best of luck and skill!
Hi @osakasaul,
I am interested to know... why does this appeal? Just so that you can use Stripe? My company is registered in Estonia and, like Czechia, this is not somewhere Stripe operates. But if you already have a cheaper deal with Braintree, then why switch to Stripe? Or is there some other advantage?
No lawyer, but one option is not to transfer the IP. Use your US company as a reseller. Or have it handle the hosting while paying licence and support fees to the Czech company. Arrange your pricing to the reseller so as to make profit wherever is most tax efficient. If your US company gets sued, you can't lose your IP.
"If your US company gets sued, you can't lose your IP" This is a very important statement. I think the IP assignment contract when forming with Stripe Atlas differs if it is an LLC vs a C Corp.
Do you use Stripe Atlas for C Corp or LLC?
I don't use Stripe Atlas. In that statement, I was talking about the scenario where the OP could keep his IP in his existing Czech company, and not transfer it to the US company. There's no rule that your organization has to be a single legal entity - it can be many separate entities that do business with each other. It just gets increasingly complicated. Just as you might create a limited liability company to protect yourself (personally) from getting sued, one company can create another company to act as a buffer.
The thinking is logical, but the Stripe Atlas LLC formation agreement includes an IP assignment clause: you must explicitly specify what intellectual property you DO NOT want to include in the LLC.
Although Stripe Atlas and its partners help a lot with guiding people who want to incorporate with them, they still ask you to ask your lawyer(s) (aka legal counsel) about this.
I'm always scared of legal stuff and unfortunately can't really afford a lawyer, so I'm in trust mode. Trusting that there are no traps and trusting that I'm not too dumb to realize it when I'm doing a dumb thing.
For the IP clause I did mention some "stuff" as excluded from the new LLC that is to be formed by Stripe Atlas.
Stripe people are pretty cool and some actual indie devs with successful projects joined Stripe and now guide Stripe Atlas companies. That's one reason I really trust them; although I'm keeping my eyes open on what agreements I say "yes" to, because that's always serious and binding.
CC @patio11
EDIT: My comments are not meant to be interpreted as legal advice and I am not your lawyer and comments and posts do not establish client-attorney relationship and don't sue me to the applicable extent allowable by law. :P
Thanks, @grahamhughes. The advantages with Stripe include easier implementation, better dropped payments recovery, and the fact that everything that integrates with payment solutions actually maintains their Stripe integration. A bug gets fixed in minutes; with Braintree, it's months.
Also, there are benefits in being a U.S. corporation. We've lost a lot of business simply because a large organization wants to be certain that they'll have recourse if they have a problem with our products.
Although I can't offer much insight; I can tell you how I would approach the issue: get in touch with a solid international law firm (preferably in EU) and schedule a preliminary meeting to discuss the matter. The right person can probably answer most of these questions.
Thank you, @chillyorange.
With respect, my aim in opening this discussion is not just to get my two questions answered, but rather to elicit questions that Atlas should answer - and in so doing, would:
As for us, with RiteKit, with definitive answers to my two questions, we'd be ready to go with Atlas immediately.