Resources for Startups

 

Important Legal Forms

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• Articles of Incorporation

• IP Assignment Agreement

• Bylaws

• Operating Agreement (Founders Agreement)

• Nondisclosure Agreement (NDA)

• Employee Contract and Offer Letter

• Shareholder Agreement

Forming a Legal Entity

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It is very important to choose the structure that provides adequate legal protection for your startup and lines up with your long-term goals. The categories most commonly found are:

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• Corporation - a legal entity separate from its owners. Corporations can make a profit, be taxed and held liable. While the cost to form a corporation is higher than other structures, this type of structure provides strongest protection to its owners from personal liability.

• Partnership - relatively simple structure for two or more people subdivided into:

  • Limited partnerships (LP) - only one partner has unlimited liability, while all other partners have limited liability. Profits are passed through personal tax returns, and the partner with unlimited liability also pays self-employment taxes.

  • Limited liability partnerships (LLP) - all partners have limited liability and are not responsible for actions of other partners. LLP is a common structure for companies providing professional services (e.g. law firms). 

• Limited Liability Company - a blend of partnership and corporation business structures. In most instances, LLC provides protection from personal liability (e.g. house, savings account, vehicle, etc.) in case of lawsuits or bankruptcy. LLC members are considered self-employed and are thus subjected to self-employment tax contributions toward Social Security and Medicare.

• Nonprofit Corporation - often referred to as 501(c)(3) corporations are focused on charity, education, scientific, literary, or religious work. Eligible for tax-exempt status and thus not subjected to federal or state income taxes on any profits made. Tax exemption is requested from the IRS. Corporate profits cannot be distributed. 

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State of Incorporation (why Delaware?)

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​Many U.S. states offer various benefits to companies formed and operating on their soil. The State of Delaware is a particularly attractive jurisdiction due to its Court of Chancery that focuses solely on business law and uses judges instead of juries. In addition to that, there is no personal income tax for non-residents, and stock shares owned by persons outside Delaware are not subject to Delaware taxes. Perhaps the most appealing advantage to many businesses incorporated in Delaware is the fact that there is no state corporate income tax for companies formed in Delaware but not transacting business there. 

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Intellectual Property

TRADEMARKS

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Intellectual Property

PATENTS