A recent LawTrades user asked: I’m familiar with LegalZoom, but what are other good options/websites to form an LLC?
LegalZoom and Rocket Lawyer are a good starting point to see what goes into documents needed for forming an LLC. However, it’s best to consult an experienced attorney who works with startups, to figure out what the best business structure is for your company. If you fill out the documents needed to form an LLC, but miss some legal issues, you’ll probably tack on more legal fees later on, especially if you want to get outside investment for your startup. DIY legal may seem free/cheap in the short run, but it’s usually not worth it in the long run, just like DIY medical racks up medical bills.
If you’re a tech startup you might want to consider a different corporate structure for a few reasons:
Typically, LLC’s are not great for tech startups for a few reasons:
(1) VC’s really don’t like pass-through entities; (2) the tax partnership rules are super complicated; (3) it doesn’t allow for stock option plans, convertible notes, etc., (4) it gets more expensive and complicated down the road.
For these reasons, the standard for most high growth technology based startups is incorporating as a C Corporation in Delaware. But why Delaware? It’s because that state has a very efficient court system that favors businesses and corporate law. There’s also some more administrative ease than some other states and generally just garners a level of credibility with investors and potential partners.
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