What to Ask: Incorporation and Startup Tips | Phil Hong, Esq.
UpCounsel attorney Phil Hong explains what every startup should be asking their legal team about incorporation and business operations2 min read
What form of business?
It depends on the size of your company and how it's held. You want a partnership or corporation? If corporation, C corp. or S corp.? Do you want a nonprofit or a nonprofit branch in your organization? You need to weigh pluses and minuses of each form and decide what works best for your organization.
How to raise capital?
It can be traditional loan, investment for equity, safe, or crowd funding. You need to be smart and flexible when it comes to raising capital.
Delaware corp. or California corp.?
Delaware corp. makes sense if you are doing business across the country but if your business is limited to California, no need to do Delaware.
B corp. and Benefit corp.?
They are not the same thing.
Getting visas for employees and founders?
Consult an immigration attorney. Do not wait until it's too late. Immigration process takes time.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Limited Liability form of entity
What specifically are small business owners most confused about when you first meet with them?
C corp. and S corp.
How can quality legal services help a small business grow?
Starting right so that they can grow faster and more easily.
How can quality legal services help small businesses save money?
Finding best form of entity to minimize tax liability, and reducing redundant or avoiding unnecessary paper works
How can small businesses maximize the value of their legal team’s services?
Know what you want before coming to talk to a lawyer.
Should business partners have the same amount of equity in a company? Why or why not?
There is no one simple answer here. they should do what's fair and what works for them.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Accurately determine the value, Due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, Determine why the business is for sale.
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
Choose your partners carefully.