10 Incorporation FAQs For Startups

Properly incorporating and structuring is key to position a startup to attract investors and strategic partners and, if desirable, achieve a successful exit. Advance planning allows founders to accomplish this result, and to avoid the time and expense of restructuring later. Here are the answers to 10 questions for founders to consider when incorporating their startup.

1. When's the right time to incorporate?

The three main ways to structure a business are sole proprietorship, partnership and incorporation. Most businesses kick off as a sole proprietorship or partnership with one or more owners/operators responsible for all aspects - including risks and liabilities - of the business. A corporation, on the other hand, is a legal entity separate from its owners (the shareholders).  At some point, founders are ready to look at incorporation and its benefits. The time's right to consider incorporation when: the founder(s) have developed intellectual property