[Link: Tech Startup Issues: Forming Your Company - Bloomberg Law]
“[For employees] the whole ball of wax for these types of companies is: how much equity can I get? Can I get rich? Am I going to feel passionate about working at this company?”
Business formation doesn’t happen in a vacuum. There are, as they say, numerous moving parts to every startup that influence the early decisions you make with regard to financing, corporate structure, compensation, equity, taxes and others such critical issues.
However, as this excellent Bloomberg video shows, if you’re building a startup and plan to 1) use other people’s money, 2) attract talent, 3) use equity to grow … “Corporation” structure appears to trump the LLC for convenience and predictability.
Watch the video interview with attorney Edward Zimmerman, a partner at Lowenstein Sandler PC, for his thoughtful and informed insights on this question.
And for further reading:
- 12 Reasons for A Startup Not To Be An LLC (Davis Wright Tremaine)
- Business Structures: What’s Right for My Company?
- 3 Questions Every Startup Entrepreneur Should Ask (During Business Formation)
- Piercing the Corporate Veil: How to Avoid Personal Liability in Business
- The Limited Liability Company: Right For Your Business?
- Yes, an LLC Can Be Taxed as an S-corp, But Why? (Sands Anderson)
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