[bradleyjg]

It's a long discussion, but the basics are that if you ever go public / get major VC funding you will have to switch to a Delaware C-corp because that's where all the major corporate litigation takes place and thus the law that big corporate lawyers are familiar with.

In the meanwhile though it can be considerably cheaper to file locally. It will cost more to change later, but you are going to have a lot more resources if you are in the situation of needing to convert.

So if you are looking to get funding right away your best bet is Delaware C-corp, if you are going the "lean" route then you should probably do whatever is quickest and cheapest (usually, but not always, a local LLC).

[tptacek]

We found getting a DE LLC to be pretty much trivial; on the other hand, getting a local LLC (for us: NYC) appeared a lot less trivial, and involved things like running an ad in a newspaper. I'm still not clear on what the advantage is to getting an LLC anywhere but DE. I'm sure there are venues that are cheaper, but DE is so cheap that unless you're incorporating a whole bunch of companies at once it's hard to see why it would matter.

[iends]

Did you have to register as a foreign corporation in NY after you created your DE corp?

IANAL, but for North Carolina if you have an employee in the state you must register as a foreign corporation and pay whatever fees are associated with it. It also seemed like you had to do double the paperwork each year once for DE and once for NC.

[bradleyjg]

There is a trick to the advertising requirement. Since advertising in NYC is so expensive, you register in Albany and then 6 months later move the registration to NYC.

I agree though that NY LLC is not the easiest process in the world, but then again neither is NY foreign corporation registration.

[tptacek]

Does foreign corp registration (a) not apply to LLCs, (b) normally just get handled by your accountants, or (c) actually turn out to be a detail that is trivially handled in 15 minutes? Because I don't remember this being a particularly dramatic problem for us.

[bradleyjg]

To be frank I've never seen someone do an out of state LLC, it seems like the choices tend to be Delaware (or Nevada) C-corp, or local LLC/S-Corp.

Maybe I'll look into it next time it comes up.

Cheers.