[graycat]

The OP is from Stripe, and their Stripe Atlas program seems to want to have a startup pay $500 and, thus, have Stripe get the startup a Delaware C-corporation.

Good grief: Why would a startup, prior to equity funding, want to be a Delaware C-corporation instead of just an LLC?

[pbiggar]

If you are planning to do equity funding, the $500 to Atlas is cheaper than the $4000 to a lawyer to convert your LLC to a C-corp later.

Disclaimer: happy Atlas user who did previous C-corps the old-fashioned way and did not enjoy doing that.

[graycat]

Then start with an LLC and, when have an equity check in hand, don't count those chickens before they hatch, use Atlas to convert the LLC to a C-corp or, simpler, just use Atlas to form a C-corp and f'get, or some such, about the LLC.

[pbiggar]

Often, that LLC will have important IP that isn't trivial to convert. (Hence paying the lawyers way more than $500 to fix it).

What's the advantage of doing it in 2 (expensive!) steps if you know the plan already?

[graycat]

> convert?

I'd wonder about that. But, all the IP is on just a little portable, USB interface, hard drive I own, so I bring a copy with me when the C-corp is formed? Shhh, don't tell anyone!

For two steps, easy: For a solo founder and 100% owner, an LLC is a total sweetheart and a C-corp. with a BoD is a forever continuing total pain in the back side. So, very much do not want a C-corp until need it for equity funding where the founder is no longer 100% owner, and such equity funding is chancy. Equity funding is not easy to get.

I'm not counting on equity funding and, really, have given up on it -- by the time VCs will write me a check, I will long since have not been willing to accept it. My startup is deliberately designed to get to plenty of money for growth with just my labor and my thin checkbook. And, I'd greatly prefer to remain 100% owner of an LLC.

[csomar]

You seem to be complaining about a product that you are not the target market for. The people who setup a C-Corp from day 1 are interested in raising funds, potentially multiple funds; and later exiting. (or IPOing if they are lucky).

[graycat]

They should have the equity check in the bank before they setup a C-corp.

[graycat]

Besides, one option is to leave the intellectual property in the LLC and lease it to the C-corp!