Ask HN: Advice on creating a LLC before a kickstarter project?

https://news.ycombinator.com/item?id=3848729

by aorshan • 14 years ago

5 4 14 years ago

news.ycombinator.com

I've been looking into starting a project on kickstarter and am wondering whether it makes sense to form an LLC before the project, or whether it is wiser to wait to see if the project becomes successful and then form one.

Any advice?

debacle• 14 years ago

It's not expensive. NY is ~350 and that's likely the most expensive in the US (CA or MA might be more).

It takes a lot of reading. I did most of my research on the web, and probably read ~500 pages worth of text before I figured out what I was doing.

That $350 is insurance against all sorts of bad things, and is, in my opinion, totally worth it.

mrkmcknz• 14 years ago

"That $350 is insurance against all sorts of bad things, and is, in my opinion, totally worth it."

Priceless advice. Protecting your personal liability should be of great concern, especially if you have a family/partner whose financial life is linked to yours.

tstegart• 14 years ago

I'd wait. Just money spent that you don't have to if your project doesn't get funded.

anthonycerra• 14 years ago

Previous Kickstarter here. I'm not a lawyer, this isn't legal advice, blablabla.

You might want to have something in place (S-Corp or LLC) before your Kickstarter launches.

You can be sued for any number of things other than the obvious. If your product is significantly delayed and you don't deliver on time (been there), you can be personally liable if you don't have a structure in place.

Also note that an LLC itself isn't enough to protect you. We did the whole legal zoom thing and one day a lawyer asked us about our operating agreement. Naturally, we responded with "Whatchu talkin' bout, Willis?". She informed us that an LLC without an operating agreement isn't really a legitimate entity and won't pass the "corporate veil" test if anything should go down.

TL/DR: Talk to a startup lawyer.

Ask HN: Advice on creating a LLC before a kickstarter project?

Related Stories