For a traditional startup, that will (i) raise money from investors or (ii) give equity to employees, you should just be a Delaware c-corporation. Those are streamlined, known, and easy processes with a Delaware corporation. Every lawyer in this space has forms for that and can read those documents with a baseline of familiarity. If you try to innovate here and set up a startup as an LLC or a California corporation, you are complicating every corporate transaction you'll do and adding cost to every interaction with your lawyer and the counterparty's lawyer. And you will prohibit investment from certain VCs who aren't able to invest in pass-thru entities because some of their LPs manage retirement money and are subject to ERISA.
There are other businesses where an LLC makes sense, including possibly for a bootstrapped startup that will have one stockholder for its whole existence. But that's not my area.
Not even going to include a disclaimer about this not being legal advice, because I am a lawyer and this is good advice :)
There are other businesses where an LLC makes sense, including possibly for a bootstrapped startup that will have one stockholder for its whole existence. But that's not my area.
Not even going to include a disclaimer about this not being legal advice, because I am a lawyer and this is good advice :)