[TezzellEnt]

You're correct when you say that creating a LLC is not hard to do. IANAL, but creating a LLC might not be the best choice of incorporation for a startup though. The referenced Y Combinator company Clerky helps incorporate startups as Delaware C-Corps for a grand total of $381 [1]. That's about as cheap as legalzoom, not including the filing fees for California LLCs (which are $800 a year to the Franchise Tax Board). [2]

[1] https://www.clerky.com/pricing [2] https://www.ftb.ca.gov/businesses/bus_structures/LLCompany.s...

[ternaryoperator]

If you're based in Calif, there is no benefit tax-wise to filing in Delaware. Calif will tax you on the dollars you earn in Calif., regardless of where you incorporate. As an LLC, the minimum tax in Calif is $800. So, if you're based in Calif. you might as well incorporate in Calif too and save the $381 to incorporate in Delaware and pay the annual Delaware fees. I know this b/c I went through this very mistake a few years back.

[technotony]

If you want to take external investors money, you need to incorporate in Delaware. If you are just bootstrapping then there's no need to do this and you may as well just incorporate in California as you suggest (ie it's not about tax optimization!)