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Rough cost to create a C-Corp for a startup using stock to pay advisors? Rough breakdown? It would be a CA C-Corp.

San Marcos, CA |

Not sure what I can add at this point. Could respond to specific questions if the answers are needed to refine the quote.

Attorney Answers 2

Posted

Actually a good question.

Setting up a corporation will depend on where you are and who you use in the state, but about $1,000 plus costs will get you a good interview and analysis about your business plans, and corporate documents that are accordingly better than off-the-shelf internet offerings. It normally would include issuing shares under an exemption from registration under the California and Federal Securities laws.

You, however, may require a more complex share issuance and probably require at least one contract to "use stock to pay advisors".

Finally, you may find it more difficult than you imagine to find advisors to accept equity in a startup as compensation. That's without the issue of "conflict of interest" in rendering professional services to a company that you are a part-owner of.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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Posted

Forming the corporation is the easy part although you might want to consider authorizing several different classes of stock such as voting and non-voting in order to distinguish between your stock and the stock issued to employees and advisors. Keep in mind that drafting the bylaws and an operative compensation agreement and navigating the applicable securities laws is far more complicated than the formation process itself.

This response shall neither be deemed to create an attorney-client relationship nor constitute legal advice but rather is intended to provide general information about a complex legal issue.

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