Joel, if I'm not mistaken Fog Creek is an a (S?) Corp. I'm wondering how much bookkeeping and administrative overhead that entails. You mentioned in another thread that you spend about 2 hours a week in QuickBooks. Does that include payroll? And do you find that there's much time involved in the corporate governance stuff that's legally required?
We're a regular ("C") corporation. The advantage of that is that over an S corporation is that if we ever grow to the point of going public, or if we raise outside capital in which different classes of shareholders have different classes of stock, we can do that without re-incorporating (at great expense.)
Doing business without incorporating is borderline insanity. Corporate laws protect you as the business owner in a number of ways (most importantly with personal property and liability).
Marc, yes, thanks, I should've clarified that the question is not so much "incorporate or not?" as it is "corporation or LLC?" When I went in to talk to the lawyers I was expecting them to tell me an LLC is the way to go, and I'd done a fair amount of research on LLCs and felt like I had a good grasp of the requirements. I know much less about corporations, and the combination of my lack of knowledge and the sense that corporations entail more administrative complexity was nagging at me. So it's off to the bookstore to absorb as much as I can... anyway, thanks.
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