I listen to mixergy interviews and they recommend scott edward walker and so i talked with the guy and he has a startup package. It's 1500+500+900 for filing. The total comes down to around $3000. Is this a good route to go for a startup?<p>Background: I'm a single founder, looking for co-founder down the line.
Folks who have been there before will tell you not to waste a single cent on incorporating until you absolutely have to.<p>Wait until at least one of the following is true:<p><pre><code> 1. You have investors who are ready to go.
2. You hire an employee.
3. You have actual customers and actual revenue.
4. You have any significant exposure to liability.
</code></pre>
Don't bother with <i>any</i> of the paperwork B.S. of setting up a business until you actually <i>are</i> a business. Once you go down that road, not only are you spending a bundle on getting papers filed, but you now have recurring expenses for annual report fees, state minimum taxes, business licenses, accountants, attorneys, etc.<p>I'll go even further and say don't even bother spending time or money on a name, logo, domain name, website, or business cards until you've talked to enough potential customers to be sure you've understood their problem and are building the right product.<p>If you bring on a co-founder later, you can draw up a simple agreement (find a template online, or get an attorney to help you) that spells out the understanding between the founders in terms of ownership and control of the company once it is incorporated, who owns the leftover IP if the company fails before you get to that point, what happens if one founder leaves, etc.<p>I know it's exciting to finally "be a real business" and print business cards naming yourself "CEO". But that's all just vanity. Hiring a lawyer and filing some forms doesn't make you a real business; creating a product and selling it to people does.
I've started several small businesses, dating back to 2001, and have never done more than filling out my state corporate commission's articles of organization.<p>This is not the safest route, but definitely the easiest and cheapest way to get started. Doing this will let you open a business bank account, get merchant services setup, get an EIN (tax id) from the federal government, etc.<p>In Arizona it takes about 3 minutes and costs $50: <a href="http://www.azcc.gov/Divisions/Corporations/forms/starpas/formsSTPS/L010-Articles-of-Organization.pdf" rel="nofollow">http://www.azcc.gov/Divisions/Corporations/forms/starpas/for...</a>
Need some more info - State/Province/Country of incorporation? Federal or State/Provincial incorporation(again, depends on country) Includes any shareholder agreements as well?<p>Also, why not wait for the co-founder first, to save $$ on getting papers re-drawn / filing amendments?
A lot of the value of incorporating is "getting to know" your legal team. Wilson Sonsini in SV and SF will often defer or waive fees for a very small chunk of equity on ideas that they like, and other legal teams are open to similar arrangements.<p>The benefit of extending your network is huge here. A good legal team can be a gateway to capital, while a missfiled c-corp can scare away investors.<p>Aside from the oft-repeated, "don't do it until you absolutely have to", I would suggest that you to do some research on law firms that are specifically working with startups in your industry and area.<p>You may be surprised that many will set up your c-corp for just the cost of fees if they believe that your idea and future with them is strong.
Thanks for all the comments. So ya the attorney will incorporate in delaware as a c corp. i do sell apps on the app store right now as an individual.<p>I am outsourcing some of the development and so he mentions it is important to incorporate to protect the ip. It will include some form for freelancers to sign.<p>The third thing is that i plan to do this at night and weekends while i test out the market and i dont want it to potentially conflict with work ip. I plan to release and sell small pieces of software to test each step of the way. Or maybe just free software.<p>Thanks.<p>Ps: oh and he advice me to wait on patents since it is not critical and will cost 20,000. Just execute and that gets investor interested.
I agree with all the comments that recommend for you to wait on filing, especially since you are a single founder company.<p>However, if you were in a two founder situation, there might be some benefit to incorporating particularly because it would force you and your other cofounder to ask yourselves tough questions about the future.<p>I have a 2 cofounder situation myself, and I would like to get the legalities out of the way, but I find the fees prohibitively expensive. The best startup package (most comprehensive and from a reputable firm) I've seen was priced at $5,000 USD. $3,000 sounds like a deal, but caveat emptor.<p>Good luck,<p>Jenny
Take a look at Clerky.
<a href="https://www.clerky.com/" rel="nofollow">https://www.clerky.com/</a><p>From their web site:
Clerky helps startups
get the legal stuff done fast.<p>Incorporation, convertible notes, employee documents, NDAs - everything the typical startup needs.
Use Clerky to get your paperwork out of the way so you can get back to building your company.
I heard good things about the startup lawyer Ryan Roberts and he charges $1,250 + filing fees ($148) as a standard fee when I checked with him (March). That's for a Delaware c corporation.