UC 270 Lecture Notes - Lecture 13: Limited Liability Company, Sole Proprietorship, Natural Person
Document Summary
Startup attorney, input from mentors, other entrepreneurs. One person business, no set-up, business not taxed, income/losses flow through, unlimited personal liability. 2+ person business, need formal set-up, business taxed. Need articles of organization, should set up operating agreement. Easier and less expensive to set up. Business pays taxes (can be taxed twice - income and dividends) Can sell stock (preferred stock) and establish stock options. Must be c corp for venture capital investment. Business is not taxed, shareholders are taxed. One class of stock, less than 100 shareholders. Shareholders must be us citizens or residents and natural person (no corp or partnership) You and colleagues are starting a company around a new internet of things. Difficult conversation, can be problematic if ignored or delayed. Contribution to date (idea, ip, development, cash, property, etc) Other considerations: background/credibility of founders, risk taken. Business planning - model and plan for evaluation.
