Getting Inc.ed

Somewhat of a play on getting inked, the day job is now an Inc. rather than an LLC. The reasons for the change are many, ranging from taxes, to important things like raising capital.

Yeah, I know, we are at a 15 year low for VC investments. But this is a capital intensive business, and we are growing, and have a need. So, this is one option for pursuing the capital we need. And being Inc.ed, Delaware C corp specifically, allegedly helps in this regard.

More soon, once we have all the documents, going to have lots of paperwork to do. That will be fun … (not).

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4 thoughts on “Getting Inc.ed

  1. @Chris

    Thanks.

    Yes, we are in Michigan. Each state has different laws about corporations. Delaware happens to have some of the more company friendly laws. I’d prefer it if the laws were uniform, but each state has the right to set its own rules.

  2. Ah, OK, strange that they let people in other states use their laws! Do they get to collect corporation tax etc from you then ?

    Here in Aus company registration is a Federal responsibility, not a state one, and similarly for the UK.

  3. @Chris

    Actually this is something to be figured out 🙂 I have to bug our lawyer about this.

    The main reason to go to the C-corp (versus the LLC we were, or the S-corp we could have been) are taxes. Lawyers argue that you get “double taxed” as a C-corp, as you pay income taxes on your salary, as well as corporate income taxes. But they neglect to mention that as a flow-through entity, all the revenue appears as income on your tax reporting.

    Thats dangerous to your tax bracket in this day and age (here in the US). “High income” people in the US (most small businesses set up as flow through entities) are about to be hit with significant additional taxes to help pay for some politico’s concept of health care. What sad is that for these bills, no one voting on them has read them, and are being forced through anyway.

    This was to a small degree, discussed in other threads. Basically, if you appear on paper to be doing well here, your taxes are going to rise, sharply.

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