Attorneys from WilmerHale's Emerging Company Practice will explore the most critical issues facing entrepreneurs and early-stage companies during our QuickLaunch University Webinar Series. Over the next several weeks, we will share key takeaways from each webinar. This week, we take a look at determining the right type of entity.
On April 12, WilmerHale Partners Mick Bain and Gary Schall discussed requirements for entity choices including LLC, C-Corp and S-Corp; short-term implications such as filing fees and tax liabilities; best practices to position high-growth startups for fundraising and exit events; and additional considerations for choosing the right legal entity. Here are six things startups need to know about C corporations:
- Most venture-backed and public companies are set up as C corps
- Delaware is the most popular jurisdiction for C corps
- Management can create incentives through employee stock options
- C corps can retain earnings and reinvest capital
- C corps allow flexible ownership structures
- C corps are double taxed - corporate tax + individual dividend
tax
Read more about determining the right type of entity to create.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
