

Ask HN:Launch your product without being incorporated? - youngdev

What are the pro's or con's of not incorporating before you launch your web/phone app to consumers?<p>Would you recommend against not being incorporated before launching?
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dctoedt
An excellent discussion of the pros and cons, with useful comments from
'tptacek, is at <http://news.ycombinator.com/item?id=359155>.

Another one: <http://news.ycombinator.com/item?id=2925222>; see especially the
comments by 'grellas and 'tptacek, as well as the discussion between the
latter and 'idlewords.

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youngdev
Thank, I'll go through both of the threads.

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paulsutter
If you are a team, incorporating is important to clarify ownership. You dont
want to have to figure that out later, after you are successful. You can also
do that with a document among the team. But don't wait too long. It's amazing
how everyone's recollection of an oral agreement is sincerely completely
different a few months or years down the road.

If you are an individual, it's not that big of a deal either way. You can wait
till you get traction to do it.

If you hope to raise VC money some day, I'd suggest creating a delaware
corporation and not an LLC. But it isnt that big of a deal either way.

There are of course tax questions, liability concerns, etc. Talk to a
professional (attorney, accountant) if you're not familiar with these.

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tstegart
The pros to not incorporating are to save money and hassle. Especially if
you're bootstrapping an idea you're not sure of and you don't have a lot of
cash.

If you have no income or don't expect to have income for a while and your
liability chances are low then its worth considering not incorporating. You
can always use your first bit of income to incorporate 6 months down the road.

I think people underestimate the amount of money needed to incorporate
properly. Yeah, you can do it for $500, even less in some states, you just
need to file a form. But what your LCC or corp agreement says actually does
matter and it pays to do it right if you're going to do it at all.

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youngdev
Its $500 incorporation fee, plus lawyers fee. Then $800 minimum tax even if
you don't make any money.

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tstegart
Wow, NY has a minimum tax? That's crazy. I'm also glad I live in WI, our fee
is about $180.

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debacle
You, personally, have full liability if your app burns the retinas of your
users out. You also get slammed with taxes.

It only costs ~500 to create an LLC in NYC, and it takes ~48 hours. I imagine
it's less in almost every other state.

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SkyMarshal
You might want to resubmit with your question in the subject line. Good
question, but most people won't bother clicking and reading it b/c there's no
subject.

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youngdev
Fixed..Thanks

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calculus
Limited liability and credibility (people DO read legal mentions!)

