Startup Professionals Musings

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How to Minimize the Red Tape and Taxes of a Startup

Startup Professionals Musings

If you are certain that you are building a large national corporation with more than 100 investors, and multiple classes of stock, then you might as well start with a Delaware or Nevada C-Corp. A few states, like Delaware and Nevada, offer tax advantages to large companies.

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You Don’t Need Delaware to Start Your Company

Startup Professionals Musings

For example, if your business is likely to get venture capital soon, have a large number of shareholders, or you have a high probability of going public, it might still be a good idea to incorporate in Delaware or Nevada due to these two states more size-friendly laws. Arizona is close to the bottom, with statutory fees of only $60.

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8 Reasons To Incorporate Your New Company Early

Startup Professionals Musings

An LLC will work just fine for this, but if you know enough to anticipate more than 100 investors or special classes of stock, I recommend incorporating as a Delaware or Nevada C-Corp or S-Corp. Define a business entity early to manage taxes and intellectual property. Tax status can be assigned separately to match your preferences.