I’ve started several successful companies, both LLC and C-Corp, and the real answer to this question is what you consider “starting a business”
If you mean having a corporate structure that can begin raising capital for operations and allow you to start offloading tax liability as business expenses, then you absolutely do not need 50k - 10-15k max for an airtight functional business entity. This means limited expenditures on equipment/office space/social media or advertising and forgoing salary for anyone as an early partner.
If you mean having a physical location, production equipment, investing in a social identity/presence, retaining legal counsel for regular use, or paying salaries, then yes it is quite expensive, and even 50k would only get you a few months of operation.
The most important thing people forget about is that having a business is as much about offloading tax liability and providing legal protection. My business mentor and partner has 27 LLC companies and 5 C-Corps. One mistake that gets made a lot is keeping everything under one corporate entity. Every step of your business that costs money should be it’s own entity so that all elements of operation and production, as well as many of the partner’s personal expenses, become tax deductible. If done properly, none of the partners should see any significant tax liability from anything but salary and capital gains (when you are revenue positive).
redyetti19 t1_j9wpz9q wrote
Reply to Does it really cost >50k to form a new company? by ajconway
I’ve started several successful companies, both LLC and C-Corp, and the real answer to this question is what you consider “starting a business”
If you mean having a corporate structure that can begin raising capital for operations and allow you to start offloading tax liability as business expenses, then you absolutely do not need 50k - 10-15k max for an airtight functional business entity. This means limited expenditures on equipment/office space/social media or advertising and forgoing salary for anyone as an early partner.
If you mean having a physical location, production equipment, investing in a social identity/presence, retaining legal counsel for regular use, or paying salaries, then yes it is quite expensive, and even 50k would only get you a few months of operation.
The most important thing people forget about is that having a business is as much about offloading tax liability and providing legal protection. My business mentor and partner has 27 LLC companies and 5 C-Corps. One mistake that gets made a lot is keeping everything under one corporate entity. Every step of your business that costs money should be it’s own entity so that all elements of operation and production, as well as many of the partner’s personal expenses, become tax deductible. If done properly, none of the partners should see any significant tax liability from anything but salary and capital gains (when you are revenue positive).