[patrickk]

What if formally incorporating your business is a prerequisite for getting real user feedback (i.e. feedback that's not from friends and family)?

Like accepting credit card payments to a merchant bank account from real customers, or setting up an iOS developer account for a premium app to accept payments from Apple?

One of the pieces of advice YC gives to startups struggling to find direction is to "charge users for something". Surely you can't do this unless you're properly setup to accept payments. I suppose you could accept payments into a personal bank account and incorporate later, but most tax authorities would frown heavily on that.

[victorhn]

> I suppose you could accept payments into a personal bank account and incorporate later, but most tax authorities would frown heavily on that.

In my country many online retailers accept payments on personal bank accounts, but being a total novice to receive payments i have some questions : is there an amount of monthly flow of money where tax authorities start checking your transactions in your bank account? also, how is the process? does your bank notify your government that you are receiving an extra-ordinary amount of money?

[jsiarto]

In the US -- there is no "minimum amount when authorities check bank accounts" -- they can't legally do that. You are required to report all income to the IRS regardless of source and it's generally not a good idea to mix personal and business accounts. An LLC, EIN and bank account take about 1 hours worth of paperwork and you're generally set to start exploring the business side of an idea.

[ordinathorreur]

Then that's just a necessary step towards getting your product in the hands of people then. However, do you really need to charge customers until you've validated your ideas? I see a lot of projects offering their product for free while in beta, perhaps that's more in line with what the article is trying to argue.