LLC or C-CORP?
I get this question all of the time. Entrepreneurs read a bit about companies and came across a whole bunch of overly long, technical articles as to what type of entity to form. Some articles say this, some say that, yadda yadda yadda.
So then come to me, a corporate lawyer/startup lawyer, and want to know what to do. I get it.
Sometimes you just want an answer and to move on with an issue. Remember what I said before--speed matters. Efficiency matters. So here it is:
Form a C-Corp for your startup.
If you're forming a startup, form a C-Corp.
If you ever want to use equity of the company for employee compensation plans or if you want outside investors (venture capital firms) to come and invest in your company, then form a C-Corp.
You may be wondering--if the consideration between LLCs, S-Cops, and C-Corps and this and that is so simple, then why do people ever set up an LLC or some other type of entity?
For a few reasons. I work with a lot of large specialized projects that hold massive amounts of real estate, etc. that need certain forms of asset protection in Houston, Texas and Dallas, Texas. For many of these, I set up various types of holding/operating structures that involve LLCs and other types of entities. Don't worry about this.
I've had to convert companies into different types of entities and work around improperly created corporate structures. Trust me--you don't want to go through that. It's a distraction. Just get it right from the get go.
Go with a C-Corp and don't look back.