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4/21/2019 LLC or C-Corp? — Startup Legal Stuff: Simplifying the Law

S TA R T U P L E G A L S T U F F : S I M P L I F Y I N G T H E L AW

LLC or C-CORP?
I get this question all of the time. Entrepreneurs read a bit about companies and came across a whole
bunch of overly long, technical articles as to what type of entity to form. Some articles say this, some say
that, yadda yadda yadda.

So then come to me, a corporate lawyer/startup lawyer, and want to know what to do. I get it.

Sometimes you just want an answer and to move on with an issue. Remember what I said before--speed
matters. Efficiency matters. So here it is:

Form a C-Corp for your startup.

If you're forming a startup, form a C-Corp.

If you ever want to use equity of the company for employee compensation plans or if you want
outside investors (venture capital firms) to come and invest in your company, then form a C-Corp.

It's easier.

You may be wondering--if the consideration between LLCs, S-Cops, and C-Corps and this and that is so
simple, then why do people ever set up an LLC or some other type of entity?

For a few reasons. I work with a lot of large specialized projects that hold massive amounts of real
estate, etc. that need certain forms of asset protection in Houston, Texas and Dallas, Texas. For many of
these, I set up various types of holding/operating structures that involve LLCs and other types of
entities. Don't worry about this.

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4/21/2019 LLC or C-Corp? — Startup Legal Stuff: Simplifying the Law

I've had to convert companies into different types of entities and work around improperly created
corporate structures. Trust me--you don't want to go through that. It's a distraction. Just get it right from
the get go.

Go with a C-Corp and don't look back.

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Based in Texas, United State of America. Have a question or want to chat? Email me:
subrata.saha@sahalegal.com

Copyright 2017 Subrata Saha

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