Helping startups explore their options for a legal business entity

What business entity should I form?
Should I form an LLC or a Corporation?
How do I Incorporate?
How do I maintain a corporation?
What are the filing fees associated with an incorporation?
What are the Legal Steps to starting a company?
What is the difference between Member-Managed and Manger-Managed?
What are the Pros and Cons of a C-Corporation and S-Corporation?

When you decide to start your own business, one of the primary decisions you will face is which legal business entity to form. As a startup, you have many different options and each has its own legal requirements and implications. You should carefully consider how a particular entity will affect formation, maintenance efforts, taxes, and more, and an experienced Silicon Valley startup attorney can help you evaluate your array of options so that you can choose the right entity for your venture.

At Startup Company Counsel, we assist startups of every kind—from sole proprietors to corporations. We can help you select the most effective legal entity for your business, so please call to learn more today. The following are some examples of the types of business entities you may wish to consider for your startup.

Sole Proprietorship

There are no legal requirements or filings necessary to officially form a sole proprietorship, as it forms as soon as you begin any type of business operation. In fact, many individuals may own a sole proprietorship and may not even realize it. There are no legal distinctions made between you and your business and, while this entitles you to all of your profits, it can expose you to significant personal liability for the debts and losses of your business. While this is a simple and inexpensive way to start a business with simplified tax preparations, it can also place a heavy burden on you as the sole individual responsible for the business.


Similar to a sole proprietorship, a partnership is automatically formed anytime two or more people collaborate on a business deal without any filings required by the state. Partners are also not legally distinct from their business, so all profits pass directly to the partners, as does liability for all debts. For this reason, a partnership provides very few legal protections for the owners. If you do decide to keep your business as a partnership, there are still legal steps you should consider. Though no paperwork is required under the law, it is highly advisable to have a partnership agreement in place that sets out guidelines for running the business, how you will settle any disputes with your partners, and addresses any other relevant legal issues. A partnership agreement is a legal contract, so this should be carefully drafted and reviewed by an experienced business startup attorney before you sign anything.


A limited liability company (LLC) is one of the most popular business entities for startups. Simply put, a LLC combines many of the pass-through benefits of a sole proprietorship or partnership with many of the personal liability protections of a corporation. LLC owners also have the option to be taxed personally or to elect to be taxed as a corporation, a decision that should be carefully examined with a business attorney. While there are many benefits of forming an LLC, there are several legal requirements to do so. Some of these requirements are as follows:

  • Choosing an available and qualifying name for your business.
  • Filing Articles of Organization with the Secretary of State and paying the filing fee.
  • Appointing a registered agent.
  • Filing your Statement of Information within the required time period with the Secretary of State.
  • Having the necessary licenses to conduct your particular type of business.
  • Drafting an Operating Agreement, which is not required under the law for an LLC but is highly important.


When you choose to incorporate, you often add a significant amount of credibility to your startup in the eyes of potential investors and clients. In addition, the corporate entity provides substantial protections from personal liability regarding business decisions, losses, debts, legal judgments, and other liabilities. Corporate founders can also remain anonymous if they choose and have the ability obtain capital through stock issuance. With all of these important benefits also come extensive legal requirements both for the formation and maintenance of the corporation. In addition to the above requirements for an LLC, a corporate founder must (or should) do the following and more:

  • Choose between an S-corp and a C-corp.
  • Draft and file Articles of Incorporation.
  • Draft corporate bylaws.
  • Set up record-keeping systems.
  • Appoint a Board of Directors and hold the initial meeting of directors.
  • Ensure compliance with all relevant state and federal tax and corporate regulations.

There are also continuing requirements for corporations, depending on the type of business you start. While these requirements may seem daunting, they can be completely manageable with the assistance of an experienced business attorney.

The startup lawyers at Startup Company Counsel have one goal in mind—to help your business succeed. We have assisted startups of all types and sizes and we understand the many legal considerations that should go into forming a business. We fully understand all of the relevant laws and requirements for every type of business entity and can provide clear business plan that fits your goals.