
Ask HN: LLC vs. C-Corp - davidatyc
What are the benefits of LLC over C-Corp? How do you issue shares to investors in LLC?<p>Why did Waymo start as LLC?
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patio11
I wrote a bit about this for the day job, but it's essentially same advice as
I've given in ~10 HN comments over the years:
[https://stripe.com/atlas/guide#should-i-have-an-
llc](https://stripe.com/atlas/guide#should-i-have-an-llc)

<not legal advice> You issue shares to investors by writing a process to do so
into your LLC's operating agreement and then following that process when
issuing shares; a lawyer can help you with this. Note that there exist
investors who will not be willing to invest in an LLC because your operating
agreement likely gives investors less protections and less certain protections
than standard equity ownership in a C corporation; they may ask you to convert
to LLC as a pre-requisite for taking investment. You will find this to be the
market norm among e.g. sophisticated investors in Silicon Valley. </not legal
advice>

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davidatyc
Thanks! You wrote: "They offer pass-through taxation, which may be more tax
efficient in some circumstances". Can you give an example of when it is more
tax efficient to be an LLC?

Why not start as LLC (for tax benefits), and change to C-Corp when we raise
$100,000 from investors?

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patio11
A trivial example of LLCs being more efficient than C corporations for a sole
proprietor is that, if you make a loss your first partial year running an LLC,
you can deduct it against your personal income taxes incident to e.g. your
employment for part of that year, whereas if you make a loss running a C corp,
you would have to carryforward that to get a tax benefit from the loss.

I have to stay clear from giving tax/legal advice regarding particular
situations, so I'm going to politely decline to answer the second question.
Knock on wood, we'll have a better answer than that at some point.

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tehabe
Waymo is not a startup but a subsidiary of Alphabet.

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davidatyc
Ok, but why LLC? What are the benefits?

