[sgibson12]

Here's an article describing some of the differences between C-Corp, S-Corp and LLC. http://www.mynewcompany.com/entity.htm

I'm not an expert either and am approaching this decision with my business partner shortly. Here's what I understand so far.

If you're accepting funding, go with C-Corp since VC's will insist upon it. If you're not accepting funding or angel funding (friends/family) etc. then LLC will be the cheapest and least red tape. VC's prefer C-Corp because it requires you to maintain more paperwork, reports, filings, etc. (though I'm not sure exactly what that entails).

Regarding Delaware, Here's an interesting article on Nevada vs. Delaware. It advocates Nevada for "tax reasons." http://www.val-u-corp.com/whynev.html

Anyhow, I hope that helps. (and that people more knowledgeable in this area respond).

[tmarman]

The problem that I mentioned in my comment with this is that Nevada's body of precedent is not nearly as well-established as Delaware's, so you're going to pay to litigate otherwise settled issues in Delaware. Often, even if the other state is more founder-friendly, it's often better to use Delaware because you'll save on legal costs across the board (more lawyers able to do DE work, less cost litigating, less question marks and uncertainty).

Of course, that varies from state to state and certainly depends on the kind of business and cap structure, where you're doing business, etc.