6 Things Startups Need to Know About C Corporation

• 4.12.2017

Attorneys from WilmerHale's Emerging Company Practice will explore the most critical issues facing entrepreneurs and early-stage companies during our QuickLaunch University Webinar Series. Over the next several months, we will share key takeaways from each webinar. This month, we take a look at determining the right type of entity.

On April 12, WilmerHale Partners Mick Bain and Gary Schall discussed requirements for entity choices including LLC, C-Corp and S-Corp; short-term implications such as filing fees and tax liabilities; best practices to position high-growth startups for fundraising and exit events; and additional considerations for choosing the right legal entity. Here are six things startups need to know about C corporations: 

1. Most venture-backed and public companies are set up as C corps
2. Delaware is the most popular jurisdiction for C corps
3. Management can create incentives through employee stock options
4. C corps can retain earnings and reinvest capital
5. C corps allow flexible ownership structures
6. C corps are double taxed - corporate tax + individual dividend tax
   

Read more about determining the right type of entity to create. You can also view the webinar materials.