Pretty sure you can convert S Corp into C Corp at a later date and declare the multiple classes of stock needed to raise money. I believe if you convert into a C Corp from the S Corp, you have to wait a period of time (5 years?) to convert back into an S corp if you so wished. LLC is a different beast. I've personally never been involved with an LLC.
I'm not an attorney or tax guy, just a startup guy.
It is trivially easy to convert from S Corp to C Corp - one quick letter to the IRS and you are done - no lawyer necessary.
I organized my last startup as an S Corp so that initial losses would flow through to me, the founder and primary initial funder. Then, once I'd "lost" all my investment, and we were approaching outside investment, I converted to C Corp. This worked great, except for the loosing all my investment part.
Comments
Pretty sure you can convert S Corp into C Corp at a later date and declare the multiple classes of stock needed to raise money. I believe if you convert into a C Corp from the S Corp, you have to wait a period of time (5 years?) to convert back into an S corp if you so wished. LLC is a different beast. I've personally never been involved with an LLC.
I'm not an attorney or tax guy, just a startup guy.
Update: Brad Feld Explains this well/confirms some things. http://www.feld.com/wp/archives/2006/02/s-corps-vs-llcs.html
It is trivially easy to convert from S Corp to C Corp - one quick letter to the IRS and you are done - no lawyer necessary.
I organized my last startup as an S Corp so that initial losses would flow through to me, the founder and primary initial funder. Then, once I'd "lost" all my investment, and we were approaching outside investment, I converted to C Corp. This worked great, except for the loosing all my investment part.