If You’re Starting A Startup:
If you’re starting a startup, and you want to deal with equity, you’ll need to start something known as a C-Corp.*
The two major ways you can create a company are as a C-Corporation (C-Corp for short) or a Limited Liability Company (LLC). If you want to have equity in your company, then you shouldn’t start an LLC. An LLC is just for multiple partners owning a business. A C-Corp will let you take investment and have equity in your company.
Another important thing about a C-Corp is that you’ll have a Board of Directors. That might start out as just you and your Co-Founder, but as you grow and get more investors, they may join as board members as well.
For now, you probably don’t need to know about A-Corps or B-Corps (but if you want to geek out, we won’t stop you from Googling). Focus on LLC vs Corporation.
*Of course, for questions specific to your particular situation, it’s best to seek the advice of an attorney or accountant.
Key Takeaways:
- If you want to take investment (and have equity in your company), you’ll need to start a C-Corp.
- The two main forms of company structure are C-Corp and LLC.
