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Should you have your product fully developed before you legally file as a company (LLC, INC, etc)?

It might sound crazy, but the stage of development that your product is in is not the most important question you need to ask yourself before forming an official US business. The real question lies in your needs and the needs of your business. What is it going to take to complete and sell your product and to make your business/enterprise dreams a reality? Does your business plan call for and require this official designation now or can it wait?

Items to consider:

  • The cost – Registering a business is a legal process and therefore does have a fee. This fee will vary state to state and also based on the type of business entity.The size of your enterprise – If you are not in the process of selling and are working on your product alone, going ahead and forming a company may not be necessary.
  • Financing considerations – if you need money to continue development of your product, it may be wise to go ahead and register as an official business. Having a legal designation in place now ensures that you are ready to go when it’s time to receive any funds, pay taxes, etc. Plus, investors may find it easier to invest in an official company rather than just a person.

You can check a blog article on a similar topic : https://www.lawtrades.com/blog/blog-post/when-to-incorporate-a-company/. While this article refers specifically to incorporations, many of the questions and points it raises are valid for all types of companies – large and small.

It can be helpful to talk with an attorney knowledgeable in formations, licensings, patents – anything you might need for your product and future business. LawTrades can help hook you up with a business formation attorney that can help take some of the weight off of your shoulders. This is supposed to be an exciting time for you and your product.

Hope this helps!