From Ideal to Real - Part 8: Becoming Inc
After meeting with the patent lawyer, he suggested that I should pretty swiftly move to incorporating. He recommended an LLC or an S Corp and said to check with our accountant about what was best.
So I sent a letter to our accountant and... crickets...
I sent a follow up and he replied with some incredibly unhelpful direction to basically call someone else. I asked another question and got no response. It was that moment that our accountant lost our business.
So I turned to my favorite activity of crowd sourcing on Facebook. I received a bunch of responses, but one of the most actionable was a connection to a friend's accountant who taught classes in this stuff. And that's how I came to meet Adam Baruch. Adam quickly contacted me through Facebook messenger per our mutual friend's introduction and we met in his office a week later. He took an hour, free of charge, to explain the basics of incorporating, my options, and the steps I should take from there (more on that in the next post).
I am sure I won't get this 100% right, but LLCs and S Corps are very similar except for one decision making difference: LLC profits are subject to self employment tax while an S Corp's are not. While an LLC is more flexible when getting investors and removing partners, you can flip between an LLC and S Corp if you decide the other is the better option.
Adam said that lawyers will charge a bunch to incorporate, but there were plenty of fine places to do it online myself. So I used BizFilings.com (recommended by another friend from that crowd source) and in a few easy steps, I was on my way to becoming an S Corp.
Just a week later, this official looking binder arrived in the mail. And now I'm officially the owner of Litty Bird, Inc.