Legal Question in Business Law in Virginia

what type of corp..continued

I have business plans created, and a team standing by. We are essentially waiting for funding. I do not have the actual company created and I now have angel investors that are interested in reviewing my plans for investments (in upwards of $800k). I believe the appropriate company to create would be a c-corporation. I intend on keeping the business private and not take it public. The end goal will be to sell the company. So my question is, what is the best type of company to create and what paperwork do I need to fill out to accomplish that? And where can I find this paperwork? Have I given enough information about what I'm trying to accomplish for you to be able to answer my question? And if I need to consult with a lawyer, roughly what would an estimated cost be to just have a planning session with a lawyer for a project of this magnitude?


Asked on 2/03/08, 10:19 am

1 Answer from Attorneys
Christopher Davis Davis Law PLC

Re: what type of corp..continued

Thanks for your question. Some investors will prefer that you have a C Corp, but some won't care. (Ask your investor if they want perferred stock in return for their investment.)

Another option would be to go with an LLC. LLCs require less paperwork and there is no so-called "double taxation." In addition, in an LLC you can write off business losses on your personal tax return.

There are addition considerations for you to ponder. For example, an S-Corp might also be a good start for you since you can later convert it into a C-Corp if the need arrises.

It would probably be best for you to meet with an attorney, or at least speak with one on the phone. Consultation and setting up of an LLC or C/S-Corp would probably run you between $800 and $1,500 - depending on the complexity. Some law firms, like mine, negotiate flat rates ahead of time so you don't have to wory about per hour billing, which is especially nice for small businesses who want to calculate exact attorney fees into their budget. Let me know if there's anything else I can help you with.

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Answered on 2/03/08, 2:32 pm


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