Ask HN: Do you incorporate before or after validating the project?

2 points by mariust 8 years ago | 2 comments

Hi great community. I have this question for a long time... Do you incorporate before you validate or after? In fact the question would be... how can you start getting clients to pay you without incorporating? Do they pay on your name? And you inc. after that? How do you get this working and pay your share if taxes? I am from EU, if that makes any difference

Thank you very much

nostrademons 8 years ago |

After, unless you need to do something to validate for which you want the liability protections that being a corporation provides. Accepting money for a product that may or may not make it to market is one of those things.

I would have prospective customers sign LOIs before incorporating, but then incorporate before any money actually changes hands, so that all business is done in the corporation's name.

davismwfl 8 years ago |

I am from the US, and my core rule has always been that the moment someone is going to pay me for it I need to have the business setup. For me, this is a liability concern as the business will insulate my personal assets and protect me with some relative degree of confidence. Depending on the product and your risk tolerance of course this can vary. And I know some people disagree with me, but this is my personal rule.