I am building a startup and want to incorporate it, I was gonna do LLC but someone suggested C-corp. What's the benefit(s) of one over the other for startups specifically and why?
Here's an answer from YC partner Gary Tan:<p>"If you ever want to take outside investment, you'll want to be a Delaware C corp. It's just standard and investors know how to deal with it. Even Facebook started as something else, but had to reincorporate.<p>It's not too difficult to fix, but might as well the avoid the problem in the first place." [1]<p>[1] <a href="http://www.quora.com/Y-Combinator/Why-does-Y-Combinator-recommend-against-forming-an-LLC" rel="nofollow">http://www.quora.com/Y-Combinator/Why-does-Y-Combinator-reco...</a>
Start it as an LLC. You'll make the Subchapter S adoption for the IRS. It used to be that VC's would not fund an LLC, but that is not the case anymore.<p>You can change your LLC into a C-Corp any time, or you can form an LLC and have it acquire the LLC for tracking purposes if your VC wants a c-corp.<p>LLC's pay taxes as an S-Corp, which means all the income and expenses pass through to you, the owner, and taxes get paid on the profit based on your personal tax rate.