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C Corp because of... VC Funding, Tax BenefitsWhen beginning an online startup, is it better to form an LLC or a C corporation?
Business » Startups
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What are some Options? to choose from
votes
reason score
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0 2
Criteria what matters/how to decide
- Adaptability
- Annual Cost
- Company Size
- Tax Benefits
- VC Funding
Reasons Why
(add pros & cons, hover to rate)
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+ suggest an option...
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+3.0Allows other businesses (VC Firms) to become shareholders (VC Funding)
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+2.0VCs want to invest into a C-corp because it allows them to have a flexible share structure (VC Funding)
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+1.0You can make the corporation S-Corp and still enjoy similar tax benefits as an LLC would for the first two years (Tax Benefits)
- You can go from S-Corp to C-Corp by filing a single form
- reply
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-4.0C-Corp has dual-tax implications, meaning you get taxed as an employer and as an employee. (Tax Benefits)
- Accountants know ways to get around this so definitely consult with one about this
- reply
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-1.0Certain state have a high franchise fee. There are states like Delaware that don't, so consider incorporating in DE (Annual Cost)
Who's Helping?
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richeshrichesh member since Sep 21, 2008
help for this decision...
score: 50.3Best Option Pick: C Corp Criteria Suggested: VC Funding, Annual Cost Reasons Suggested: 9 (avg points: 2.4/5.0) Reason Comments: 3 Ratings: 2 -
blakeblake member since Sep 21, 2008
help for this decision...
score: 27.0Best Option Pick: C Corp Options Suggested: C Corp, LLC Criteria Suggested: Tax Benefits, Company Size, Adaptability Ratings: 11 -
scchamilscchamil member since Jul 30, 2009
help for this decision...
score: 14.6Best Option Pick: LLC Reasons Suggested: 1 (avg points: 3.7/5.0) -
rmakerso..rmakerson3 member since Nov 23, 2008
help for this decision...
score: 11.7Best Option Pick: LLC Reasons Suggested: 1 (avg points: 3.0/5.0) -
good002good002 member since Dec 31, 2009
help for this decision...
score: 3.0Discussion Comments: 1
Recent Activity
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11 months ago
scchamil
voted for LLC
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11 months ago
scchamil
voted for C Corp
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11 months ago
blake
voted for C Corp
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11 months ago
richesh
rated "Allows increased flexibilty for taxation (can be taxed as partnership or s-corp). Also avoids formalities of C corp (board, annual filings/ meetings)"
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Discussion
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