Business Formation & Startups

Selecting the right type of business entity is an important first step.  Different business entities come with different types of governance, tax treatment, protection against personal liability and attractiveness to investors.

Most companies that plan to take outside investment elect to form as a corporation or limited liability company (LLC).  Corporations are subject to more statutory requirements and governance formalities than an LLC, but many investors are more comfortable (or even require) this form, and many employees are more familiar with the type of stock options that a corporation can offer.  Tax implications are also an important factor.  C-corporation profits are subject to double taxation (at the corporate level, and again as dividends at the individual level), but a qualifying S-corporation can elect to be treated like a partnership for tax purposes.  LLC profits and losses can “pass through” to members without double taxation.

We can help you select the business entity that makes the most sense for your company.  Whichever entity you choose, Karvelis APC will guide you through the process of forming your company, adopting appropriate governance documents and stockholder agreements, issuing founder equity, setting up an equity incentive plan, protecting your intellectual property and creating forms and processes to help your company comply with applicable laws and manage risk – helping you stay clean and fundable.