Legal Question in Business Law in California

Registering for a Corporation

Hello,

My best friends and I have thought of a great website idea. It feature an online database where you can search for various profiles similar to facebook's search for people. We have an investor which is a close relative and we all trust each other 100%.

So we are looking to incorporate the company and are not sure whether we should file for a LLC or a Corp?

What are the pros and cons for each based on our company?

Also, we heard that since we do not have a physical address, filing in Delaware might bring more advantages than filing in the state we reside in which is CA.

Any advice will be appreciated.

Thanks


Asked on 7/15/09, 5:50 pm

1 Answer from Attorneys
Terry A. Nelson Nelson & Lawless

Re: Registering for a Corporation

None of the above is of great importance in deciding. Tax basis is the issue, determined by your expectation of income and taxes. Talk to your tax person who will be handling the returns and paperwork. You'll either pick a corp form that passes through income, or pick a normal corp that will pay tax on net profit. The filing and incorporation is essentially identical, so once you are serious about getting legal help with the formation, bylaws, shareholder agreements, investment agreements, liability releases, contracts, etc, etc, feel free to contact me.

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Answered on 7/15/09, 6:25 pm


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