FREQUENTLY ASKED QUESTIONS
What’s the best legal entity for a startup? LLC or C Corporation?
It depends on your goals. C Corporations (especially Delaware-based) are preferred for venture funding. LLCs offer more flexibility for small teams. We help assess what fits your funding, tax, and equity plans.
Why do most startups form in Delaware?
Delaware offers founder-friendly laws, flexible governance, and credibility with investors. Even if your company operates elsewhere, forming in Delaware is often a strategic move, especially for fundraising.
Can you help with converting an LLC to a Delaware C-Corp?
Yes. We routinely help with Delaware conversions (aka “DE flips”) for startups ready to raise capital or formalize governance. We manage filings, equity restructuring, and tax considerations.
What legal documents do I need when forming a company?
Common formation documents include Articles of Incorporation (or Organization), Bylaws or Operating Agreements, Shareholder Agreements, and initial cap table setup.
What’s the difference between Bylaws and an Operating Agreement?
Bylaws are for corporations; Operating Agreements are for LLCs. Both outline internal rules, decision-making powers, and governance responsibilities.
Do I need a Shareholder Agreement if I have co-founders?
Yes, especially if equity is being split. A Shareholder Agreement outlines rights, responsibilities, decision rights, exit terms, and dispute resolution, which are critical for founder alignment.
What’s a cap table, and why does it matter early on?
A cap table shows who owns what equity in your startup. Keeping it clean and updated is key for fundraising, equity grants, and long-term governance.
What’s vesting, and should co-founders use it?
Vesting ensures co-founders earn their equity over time. It protects the company if someone leaves early. We help implement smart vesting terms for long-term alignment.
How do we form a board of directors, and when should we?
You’ll typically form a board upon incorporation or investment. We help you structure your board, assign roles, and document resolutions and meetings properly.
What’s required to stay compliant after forming a company?
Ongoing maintenance includes annual reports, board meetings, shareholder updates, and resolutions. We help you stay compliant and organized.
Can we issue equity to advisors or contractors?
Yes, but it must be done carefully. We help draft Advisor Agreements and structure equity compensation to avoid tax and IP issues.
What if we formed the company ourselves using an online platform? Can you review and clean it up?
Absolutely. Many founders come to us post-formation to review documents, fix gaps, assign IP, and get investor-ready.
Can you help us restructure if we’re pivoting or changing ownership?
Yes. We assist with reorganizations, conversions, and ownership transitions, keeping your governance aligned with business goals.
What are common governance mistakes startups make?
Common issues include unclear equity splits, no vesting, missing board records, or poorly drafted Operating Agreements. We help prevent and correct these early.
How does corporate governance affect fundraising?
Investors want a clean structure, clear founder equity, and documented governance. We help prepare your company for due diligence and growth-stage expectations.
